Province defends move to prohibit court challenge

Minister says it makes no sense for two levels of government to fight each other

The provincial government is amending controversial legislation to prevent Saskatchewan cities and towns from challenging it in court “because they were going to,” according to Government Relations Minister Donna Harpauer.

Every piece of legislation is evaluated separately, but the government’s ability to pass Bill 64 without being “hand-tied” is part of Saskatchewan’s democratic foundation, Harpauer said Wednesday in an interview.

“Is it reasonable for the provincial government and a municipal government to spend money to fight each other in the courts?” Harpauer said. “Is that reasonable?”

The government needs to pass Bill 64 to redirect into its general revenue fund about $33 million in grants that would otherwise have been paid by SaskPower, SaskEnergy and TransGas to 109 municipalities.

Finance Minister Kevin Doherty announced the cuts last month as part of his 2017-18 austerity budget, which attempts to shave about $600 million off the province’s roughly $1.3-billion shortfall.

Bill 64 includes a clause that prohibits any “action or proceeding based on any claim for loss or damage” against the provincial government, members of government or Crown corporations.

Saskatchewan Urban Municipalities Association (SUMA) CEO Laurent Mougeot told the StarPhoenix this week that the clause is a “very, very strong measure” designed to cover a decision based on faulty logic.

Harpauer said while the legislation was drafted by government lawyers, she supports it. The bill received its first reading on April 5, its second one week later and will likely be passed this session.

Asked whether the Saskatchewan Party plans to include similar prohibitions on legal action in other pieces of legislation, especially those that could lead to a challenge, she said, “Of course not.”

It remains unclear if SUMA or any of the 109 affected municipalities can find a way to fight the legislation. SUMA remains convinced, however, that the province had no right to axe the Crown corporation grants.

Until recently, Crown corporations remitted funds — almost $60 million in 2015-16 — which the province calls “grants-in-lieu of taxes” to municipalities. SaskPower also pays a surcharge, which municipalities impose on the electricity it sells.

SUMA contends that grants paid by SaskPower, SaskEnergy and TransGas are based on longstanding agreements in which 109 municipalities gave up their rights to distribute power and gas, while those paid by other Crown corporations cover local property taxes.

Echoing her previous statements on the grants, Harpauer said Wednesday that the cuts were intended to save the government money while at the same time correcting an “inequitable” system. SaskPower referred a request for comment to the province.

Saskatoon Mayor Charlie Clark said the grants could be replaced with an agreement that recognizes municipalities’ decisions to give up their right to generate and distribute electricity, as well as the fact that Crown corporations rely on municipal services.

“By withdrawing and ending these agreements, there’s a void there.… It’s my job as mayor to advocate on behalf of our citizens that these corporations treat municipalities fairly and that our municipalities are not limited by unfair agreements.”

Clark said while the City of Saskatoon will defer to SUMA in terms of legal action, a solution that respects the long-standing agreements between cities and Crown corporations would be ideal.

Cities across the province, meanwhile, have only received a media release and are waiting for an “official communication” from the government, according to a letter SUMA sent to Government Relations deputy minister Tammy Kirkland on Tuesday.

Government Relations staff have prepared letters for each of the affected municipalities, which are expected to be mailed out this week, Harpauer said.

Is it reasonable for the provincial government and a municipal government to spend money to fight each other in the courts? Is that reasonable?