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

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

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

Last year, the province cut $36 million in grants from SaskPowerand 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, thegovernment walked back some of those cuts by capping reductions for nine municipalities.

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 thisbudget.

"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 betterreflecting the increase and expansion of thePST 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the PST rate went up a point to six per cent.This year exemptions on used vehicles and Energy Star appliances have been rescinded.

Barnhartsaid SUMA will continue to push formunicipalities to receivea share of the PST on items that only became subject to the tax in 2017, such as construction material on urban projects.

Surcharge on energy bills

The five per cent surcharge from ratepayers on their SaskEnergy billis not entirelynew. In 2016-17, 109 municipalitiesalready 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 saidthis 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 saidmunicipalities 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 threeper cent.

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 citywill receiveabout $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, Fougereadded.

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.