Municipalities association grateful for more funding

The head of the association representing the province’s cities, towns and villages says he is pleased with the prospect of more money flowing to urban municipalities through the government’s revenue-sharing program amid a global pandemic.

Saskatchewan cities, towns and rural municipalities are set to receive a total of $278 million under the province’s revenue sharing program, which was updated last year and is now based on three-quarters of one point of provincial sales tax (PST) revenue from two years previously.

“I know the municipalities are particularly needing to know what (their) revenue is going to be,” Municipalities of Saskatchewan President Gordon Barnhart said moments after the provincial government declared a state of emergency in the face of the pandemic.

The total cost of COVID-19 is unknown, but is expected to be enormous.

PST revenues jumped dramatically in 2017-18 after the government, in a deeply unpopular budget, increased it by one point while eliminating a host of exemptions, perhaps most controversially that on construction contracts. Two years ago, PST revenue crested $2 billion.

Of the total pot expected to be distributed this year, about 64 per cent will flow to urban municipalities. Saskatoon and Regina together account for roughly half of the province’s population. The breakdown of the distribution is thought to be a long-standing bone of contention for major cities.

One item that is likely to be welcomed by the province’s construction sector, which has campaigned hard for the PST exemption to be reinstated, is a three-year PST rebate program for new houses, which will pay back up to 42 per cent of taxes paid on a home worth up to $350,000.

The program is forecast to cost about $9 million based on 300 houses being built.

Saskatchewan NDP leader Ryan Meili, who had previously called for the government to delay the budget, called the estimates introduced Wednesday “outdated” and called on Premier Scott Moe to “take urgent action” to support people during the pandemic.

“Now we as a province need to step up immediately with matching measures to flatten the curve, support the delivery of health services, and get Saskatchewan people and businesses the support they need to weather this difficult moment,” Meili said.

Asked if he has faith in the government’s projections, Barnhart said it is not clear when “the ship will right itself,” but that he expects it to happen eventually and that the commitment to paying out the revenue sharing dollars this year is important.

“Every financial crisis comes to an end,” he said, acknowledging that while some municipalities are contemplating easing the financial burden on residents, there is no common trend and many may need to continue collecting revenues.

The provincial government also announced a $2.7-billion infrastructure spending program. Municipalities are expected to receive a total of $166 million for various projects, down $64 million due to projects funded under the New Building Canada Fund being completed.

The government also expects the number of projects funded under the new $1-billion, multi-year federal Investing in Canada Infrastructure Program, the subject of a major dust-up between Regina and Ottawa this summer, to grow considerably in the future.

Public safety is also getting $89 million, most of which will pay for the Saskatchewan Public Safety Agency’s first full year of operations.