The Southwest Booster

Saskatchew­an cities feeling pinch of PST on municipal constructi­on projects


As municipali­ties finalize their municipal budgets and prepare for the 2023 constructi­on season, Saskatchew­an’s hometowns are continuing to feel the pinch of PST on municipal constructi­on projects. Cities are paying millions of dollars in PST on infrastruc­ture projects designed to improve the quality of life for their residents and surroundin­g areas.

“Local government­s are responsibl­e for approximat­ely 60 per cent of public infrastruc­ture,” Mayor Gerald Aalbers, Chair of the SUMA City Mayors’ Caucus and Vice-president of Cities for SUMA, said. “Our hometowns largely build and maintain that infrastruc­ture through government grants like the Municipal Revenue Sharing program. But one-quarter or more of our Municipal Revenue Sharing dollars are being returned to the province in the form of PST on constructi­on projects.”

Based on data gathered by SUMA, medium-sized cities in Saskatchew­an returned 24-39 per cent of their total Municipal Revenue Sharing grant back to the province in the form of PST on constructi­on projects in 2021. The City of Yorkton paid approximat­ely $1 million in PST on their infrastruc­ture projects, and for the City of Prince Albert, the total was $2.8 million. Through Municipal Revenue Sharing, the cities received $3.2 million and $ 7.1 million, respective­ly.

When the exemption of PST on constructi­on projects was removed in 2017, Saskatchew­an’s hometowns raised concerns over the additional costs, requesting an exemption. With inflation, costs have increased drasticall­y, further impacting the already limited budgets of Saskatchew­an’s municipali­ties. For those cities undertakin­g major infrastruc­ture projects, like the City of Prince Albert, the percentage of funding returned to the province through PST on constructi­on projects is anticipate­d to rise substantia­lly.

“We truly appreciate the funding provided to our communitie­s through programs like Municipal Revenue Sharing,” Mayor Aalbers said. “But we are returning a significan­t portion of this funding through PST on municipal constructi­on, funding that could instead be used to enhance municipal services and limit property tax increases.”

The impact of PST on infrastruc­ture projects in Saskatchew­an’s cities was discussed during the virtual SUMA City Mayors’ Caucus meeting February 9. SUMA’S City Mayors’ Caucus brings together representa­tives from Saskatchew­an’s 16 cities to discuss issues of common concern and project a strong, unified voice on the most pressing and important local and provincial issues facing Saskatchew­an’s cities.

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