Saskatoon

Grant cuts in budget could cost Saskatoon $11.4M

Saskatoon Mayor Charlie Clark says a shock provincial budget cut could cost the city more than $10 million and create a 'fiscal crisis' in 2017.

Provincial budget cuts $36 million in grants for municipalities from SaskPower and SaskEnergy

Saskatoon Mayor Charlie Clark says he will push to have grants from some Crown corporations, paid in lieu of property taxes, reinstated. They were cut in Wednesday's provincial budget. (CBC News)

Saskatoon Mayor Charlie Clark says a surprise provincial budget cut could cost the city more than $10 million and create a "fiscal crisis" in 2017. 

Wednesday's budget put an end to $36 million in grants from SaskPower and SaskEnergy.

The city said that amounts to an $11.4-million loss, the equivalent of a 5.7 per cent property tax increase.

"There was no mention of it whatsoever and this could engender a real fiscal crisis for our city for this year," Clark said at the legislature after Wednesday's budget release.

'Devastating' loss: Clark

Prior to the change, SaskPower provided payments of $5.5 million to the City of Saskatoon. SaskEnergy paid $5.7 million, and TransGas pays about $200,000.

With the city having already passed its budget, Clark described the loss as "devastating."

"This is an $11.4-million hole in our operating budget for providing core services to citizens," said Clark.

"This amount is more than the cost of running all of our leisure facilities, or 25 per cent of our fire services budget."

He added that it was close to the entire cost of snow and ice management in the city today.

City says it had no warning

Furthermore, Clark said the government never mentioned the change in its budget talks with the city in recent months.

"We're still quantifying the numbers but it's a shock because we never had any notice of this," he said.

Clark said he planned to push to have the decision reviewed, saying it came at a time when the city was facing growth pressures from 50,000 new residents over 10 years. 

Regina reacts

Regina Mayor Michael Fougere also raised concerns about the loss of the Crown corporations' payments.

"We will continue to work in the days ahead to determine the full impact of these changes and the downloading they represent, but we know this represents a significant amount of revenue," Fougere said.

A news release from the government said the cuts would disproportionately affect Regina, adding that measures would be taken to mitigate those impacts. 

Corrections

  • A previous version of this story said the grants will no longer be paid to municipalities in lieu of property taxes for infrastructure. In fact, the province will no longer be paying grants to make up for money the city could have been getting if it ran its own utilities.
    Mar 28, 2017 11:08 AM CT

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