Saunders says no to changing revenue-sharing formula

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February 10, 2015 9:00 AM

At the Saskatchewan Urban Municipalities Association conference in Saskatoon, Premier Brad Wall did not rule out changing the provincial revenue-sharing formula in order to address an expected budget shortfall of up to $800 million this year, due to oil and gas prices.

Currently, the province shares one per cent of the provincial sales tax with municipalities. The City of Lloydminster receives just over $2 million annually from the province.

“You stretch it as far as you possibly can,” Lloydminster Mayor Rob Saunders said. “To put it into context, one kilometre of highway is worth about $1 million. Every penny is needed.”

Saunders says that SUMA is proactive in emphasizing that changes to the revenue arrangement should not move forward.

“We don’t want to change from the present revenue sharing formula in place today,” he said. “It’s highly important for the municipalities to maintain that revenue-sharing formula that we worked so hard for, for so many years to arrive at and that was the formula that was agreed upon by the premier and the Province of Saskatchewan.”

Saunders says there are contingencies in place should the formula be changed, but that budgeting is done with the PST contribution in mind.

“We always have to be flexible enough to change, but, of course, we only have certain opportunities to drive revenue and when we lobbied the provincial government, it was for fair and equitable and predictable funding that we could do our budgeting on, that we could rely on,” he said.

“It’s just like any household budget, when there’s changes you make adjustments. But we think that the municipalities have been more than flexible in accommodating changes to the provincial programs and we would much rather send the message that we’re not wanting any changes to the present formula.”

Saunders says that provincial revenue is important for a city as rapidly growing as Lloydminster.

“When we’re a high growth city, one of the fastest growing cities in the country, we’re providing jobs, we’re providing a strong economy, were providing a strong future with a young family base,” he said. “The Province of Saskatchewan has recognized and we appreciate that they understand that we are contributing to both the population goals of the province and the economy, creating jobs, building homes, finding opportunities for corporate business. We are contributing as best we can to the goals of the province … so it’s highly important that when we have a formula that’s in place that took years to agree on, that we don’t change when there’s a bump in the road.”

Saunders says that SUMA should be consulted should any changes be made, instead of hearing comments from the premier in the media.

“Our association pointed that out on behalf of all municipalities in the province that instead of hearing about it, if there’s something that needs to be discussed, that it’s done together with our representation from the municipalities,” he said.

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