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Saskatoon city council will meet Sunday to address an $11.4 million hole left in the city’s finances in the wake of the provincial budget.
The Sask. Party government eliminated a program that sees SaskPower and SaskEnergy pay grants to reimburse municipalities for property taxes.
Speaking on the Brent Loucks Show on Friday, Saskatoon mayor Charlie Clark said by law the city can’t tax the province. That means the Crowns dodge paying property tax.
“There are some limits on treating it quite the same as if it’s a house or a retail store or something like that,” he said.
Clark said the grants-in-lieu arrangement had been in place for decades. With no advance notice the grants would be axed, Clark said council now faces a shortfall nearly equal to the city’s snow and ice removal budget.
“We’re already operating based on the budget we passed in December. So pulling this money out halfway through creates a crisis for us.”
Clark said finding ways to come up with the money will be the first order of business at Sunday’s meeting. He shot down the idea of pulling from the city’s reserve funds.
“It would be very bad financial practice to raid our reserves to pay it. And then if we pay it for this year, we’ve got to figure it out for next year,” he said.
Covering the shortfall with property tax alone would mean asking ratepayers to eat a 5.7 per cent increase. That would mean an extra $96.99 per year for the owner of an average home with an assessed value of $325,000.
The mayor said some combination of tax increases and spending cuts would have to be used to address the gap.
But Ward 1 Councillor Darren Hill said they’ll have a tough time finding places to trim spending.
“The province is fully aware of all we’ve done for our efficiency reviews,” he said. “There’s simply nothing else to cut within our budget.”
Hill said if they’re forced to raise taxes, it should be made clear to residents the increase is due to the grants-in-lieu program being scrapped.
But Clark would rather property owners didn’t have to pay for the funding gap at all.
“We’re trying to figure out our legal options to intervene with that legislative decision, or at least appeal to the province to take another look at this,” he said.
Clark said Saskatoon won’t be alone in asking Premier Brad Wall to relent.
“We are working with our partners across Saskatchewan – the cities, towns and villages – because this is affecting everybody in very similar ways,” he said.
If all else fails, Hill has an idea.
“I’m going to have a bake sale, would you buy some cookies to help raise revenue?”
Saskatoon City Council’s emergency session begins at noon Sunday at city hall.
—With files from 650 CKOM’s Chris Vandenbreekel
