Saskatchewan

Saskatchewan budget 2018: Your natural gas bill may be going up, revenue sharing down

The province is giving municipalities $23 million less than last year but said a five per cent surcharge for SaskEnergy customers will help compensate.

Your natural gas bill may be going up to offset revenue sharing cuts

The 2018-19 provincial budget contains an option for municipalities to add a five per cent surcharge to residents' SaskEnergy bills. (CBC News)

Cities, towns and rural municipalities in Saskatchewan will receive less money from provincial revenue sharing this year, but the government says they can collect more from SaskEnergy ratepayers.

All municipalities can now collect a five per cent surcharge from ratepayers on their SaskEnergy bill to raise more money, according to the government.

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.
Last year, the province cut $36 million in grants from SaskPower and SaskEnergy, which were paid to municipalities in lieu of property taxes for infrastructure. The change came as a surprise to mayors. A few days later, the government walked back some of those cuts by capping reductions for nine municipalities.
SUMA president Gordon Barnhart says the province consulted municipalities more extensively before this year's budget. Cuts to grants-in-lieu came as a surprise to city mayors in 2017. (CBC)

Gordon Barnhart, the president of the Saskatchewan Urban Municipalities Association, said this year's changes will allow for "some restoration of damages" from the grants-in-lieu cuts last year. 

He said the association was pleased to have been consulted more extensively before this budget. 

"We didn't get everything we wanted or asked for but on the other hand the consultation was very, very good and I think that's a step in the right direction," said Barnhart. 

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.

Barnhart said SUMA will continue to push for municipalities to receive a share of the PST on items that only became subject to the tax in 2017, such as construction material on urban projects. 

Finance Minister Donna Harpauer's first budget includes the province giving municipalities $23 million less than last year. (Craig Edwards/CBC)

Surcharge on energy bills

The five per cent surcharge from ratepayers on their SaskEnergy bill is not entirely new. 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.

Regina Mayor Michael Fougere says this year's budget is a step in the right direction after cuts to grants-in-lieu last year. (CBC News)

Changes won't make up shortfall: Regina mayor

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.

Regina Mayor Michael Fougere said the changes won't make up the shortfall from last year's cuts. 

He said the five per cent surcharge on SaskEnergy bills is "important." Overall he thinks the city will receive about $7.5 million to offset last year's cuts. 

"It's a good start and we're pleased with that and we understand that the province is trying to fight this deficit and we're prepared to help out in that regard," said Fougere. 

The provincial budget process was "more transparent and predictable" this year, Fougere added. 

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. 

ABOUT THE AUTHOR

Stephanie Taylor

Reporter, CBC Saskatchewan

Stephanie Taylor is a reporter based in Saskatchewan. Before joining CBC News in Regina, she covered municipal politics in her hometown of Winnipeg and in Halifax. Reach her at stephanie.taylor@cbc.ca

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