Council ready to explore new tax deal with airport

City hall appears set to consider navigating a new approach to taxation with the Saskatoon Airport Authority.

City council’s governance and priorities committee on Tuesday heard the city’s approach to revenue from the airport differs from other municipalities.

“It seems that we’re a bit unique here, perhaps,” city manager Murray Totland told the committee.

The City of Saskatoon has two agreements with the airport authority, both of which expire at the end of next year.

One deal exempts the airport’s runways, taxiways and aprons from property tax. The other deal allows the airport to pay a grant to the city based on passenger volume rather than the value of its property.

A city report compares Saskatoon with Regina and Winnipeg. Regina just removed the municipal exemption for property tax on its airport this year, while Winnipeg levies property tax based on value on its airport, the report says.

“I don’t want to pick on the airport, but we’re treating them different from other groups,” Coun. Randy Donauer said.

A city report says the airport paid $7.52 million in taxes over the last eight years, or an average of $939,765.50 a year using the formula based on passenger volume. If that model were changed to property tax based on value, the airport would have paid $10.2 million over eight years, or an average of $1.27 million a year.

That’s a difference of $2.68 million over the eight years, or an average of $334,630.63 per year.

Coun. Darren Hill cautioned that if the city added to the airport’s tax bill, the airport would pass the extra cost on to air travellers.

The committee voted to forward the report on the airport’s taxation agreement to city council. Councillors suggested a reconsideration of the city’s tax relationship with the airport is worth exploring in 2018 before the agreements need to be renewed.

This year’s reassessment set the value of the airport at nearly $144 million.