Cities, towns and rural municipalities in Saskatchewan will receive less money from provincial revenue sharing this year, but the government said the change will be offset by SaskEnergy rate-payers.
Overall, the province is set to give municipalities $412 million during the 2018-19 budget period, a reduction of $23 million. This number includes revenue sharing, grants-in-lieu of property taxes for SaskEnergy and SaskPower office buildings and $5 million for urban parks.
The government said revenue sharing is based on a formula that takes one point of the provincial sales taxes collected in 2016-2017, when revenues were lower.
It has committed to reviewing the revenue sharing formula in hopes of better reflecting the increase and expansion of the PST in the last two budgets. Last year the PST rate went up a point to six per cent. This year exemptions on used vehicles and Energy Star appliances have been rescinded.
Surcharge on energy bills
All municipalities can now collect a five per cent surcharge from rate-payers on their SaskEnergy bill to raise more money, according to the government.
This is not an entirely new charge. In 2016-17, 109 municipalities already had it in place at either five or three per cent. Last year, the surcharge was diverted from the cities' piggy banks to the province's general revenue fund. Now it has been returned to cities.
What's new is the rate being expanded to all municipalities that want it and it being set at five per cent for all of them.
The government said this change will mitigate the fact offset payments to cities are being cancelled, meaning more provincial money is being diverted to the general revenue fund. It plans to cover any decrease.
The government said municipalities can choose to opt out. If they decide to charge the fee, it will appear on SaskEnergy bills as a municipal surcharge, which Finance Minister Donna Harpauer called transparent.
For the average ratepayer living in a municipality where the charge would be new, it would cost an estimated $45 per year, or $18 a year if a municipality previously charged three per cent.
Many municipalities hiked their property taxes in response to last year's provincial budget, with mayors saying the province's decision to slash grants-in-lieu payments from SaskEnergy and SaskPower created serious financial downfalls.
New spending on crime
The province will direct $17.5 million to city police services for grants. In comparison, the province will pay an additional $14 million in RCMP contracts and $5 million more to hire 30 new officers to fight rural crime.
Harpauer said she doesn't believe the cities will "begrudge" province's efforts to respond to rural crime.
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