SUMA won’t sue province over $33M in axed grants
The association representing Saskatchewan cities and towns will not sue the provincial government over its controversial decision to claw back $33 million in Crown corporation grants earmarked for 109 municipalities.
The Saskatchewan Urban Municipalities Association’s (SUMA) decision comes three weeks after it pledged to “reassess its options” following the removal of a contentious ban on legal action from the legislation needed to redirect the funds.
“A key reason (for not taking action) is that agreements and payments name or were directed to specific, individual urban municipalities, not SUMA,” a spokesman for the association said in an emailed statement on Wednesday.
That does not mean, however, that cities and towns, which may have a legal right to damages stemming from the cancellation of the contracts, will not file lawsuits independently, the spokesman said in the email.
Government Relations Minister Donna Harpauer, who defended the ban on lawsuits before reversing her position earlier this month, said Wednesday she does not anticipate any of the affected municipalities will take action.
“None of them have indicated to me that they will (sue),” Harpauer said.
The dispute over the grants paid annually by SaskPower, SaskEnergy and TransGas shocked and infuriated SUMA and many of its members, which had spent the lead-up to the 2017-18 budget concentrating on preserving municipal revenue sharing.
SUMA argued that the province had no right to cancel decades-old contracts between municipalities and Crown corporations, while the government said the cuts were intended to correct an unfair system and address its $1.3 billion deficit.
The debate grew even more intense after Saskatoon city councillors voted unanimously in favour of legal action only to discover that the province had included the now-eliminated clause specifically preventing them from suing.
While the prospect of a court battle is becoming less likely, a national advocacy group is calling on the government to support its argument that the system was unfair and establish a new, clear system for compensating municipalities.
Canadian Taxpayers Federation prairie director Todd MacKay said Harpauer’s comment to a legislative committee that there is “limited corporate memory” on how the deals were struck suggests it’s unclear whether the system was fair to begin with.
“If those answers are not available from the past, they need to be redefined in the present,” Mackay said.
That work is underway and will likely result in SaskPower, SaskEnergy and TransGas paying grants in lieu of municipal property taxes to municipalities during the 201819 tax year, Harpauer said.
“If (Crowns) have an actual physical presence in that municipality, they will gain the property tax if they hadn’t already been getting it,” she said. “That will vary from municipality to municipality.”
While larger centres such as Saskatoon and Regina stand to gain the most, it is not yet clear how much new grants paid annually by the three Crown corporations will offset the $33 million in lost revenue, Harpauer added.