It was a tense atmosphere for Finance Minister Kevin Doherty at the annual Chamber post-budget breakfast Friday morning in North Battleford.
Doherty was pummeled with questions from the officials and business people in the room over the budget handed down the previous Wednesday.
The officials most upset were from the City of North Battleford, with Mayor Ryan Bater making clear he was still boiling over the province cutting payments in lieu from SaskPower and SaskEnergy to the City.
“This was revenue that was paid in lieu of property taxation for all of the infrastructure the Crown corporations had here,” said Mayor Ryan Bater.
But Doherty said this was a misnomer. “It’s a misnomer to say it’s directly related to property taxes for facilities, it’s due to rates.”
Doherty also made clear that with transformational change “we were going to be looking at everything.” He also noted the cities had said over and over again not to touch the revenue sharing.
So instead, the province decided on payments in lieu. “When we looked at where could we ask this sector to share in filling that $1.2 billion hole, that’s what we arrived at.”
But Doherty also indicated there would be an announcement later that day from the Government Relations minister that would provide some relief.
The announcement came later that morning that the province would cap the grants in lieu reduction to municipalities at no more than 30 per cent of the amount the municipality currently receives in revenue sharing. North Battleford is one of nine communities that will be capped.
Government Relations Minister Donna Harpauer explained that for the majority of municipalities the grants in lieu cut was “equivalent to reducing their revenue sharing by about 15 per cent or less,” she said.
“However, for a few, the reduction was more than 30 per cent. After discussions with SUMA, we felt that it was too much of a burden to put on those municipalities, so we are capping the reduction to ensure that no municipality will see a reduction of more than 30 per cent of their revenue sharing amount.”
Despite this relief, the City still faces a shortfall. The prospect of making cuts was something other North Battleford officials were clearly unhappy about.
Councillor Greg Lightfoot was furious at the minister over the payments in lieu cut, as he accused the province of taking away revenue.
“You’re asking us to cut services by 12 per cent in our budget, or raise taxes by 12 per cent,” said Lightfoot.
“You’re passing the buck down to municipalities.”
The exchange between Lightfoot and Doherty was particularly heated, with Lightfoot saying the amount of the revenue drop would mean a huge reduction in services.
“Where do we start? Do we close down our CUplex?” Lightfoot asked.
Doherty responded “Look, I’m not here to run your city for you. You’ve got to make those difficult decisions.”
“But you’re asking us to,” said Lightfoot.
It wasn’t just municipal funding that was an issue. Education cuts were another concern.
“Your budget will result in a loss of funding to our school division of $1.1 million,” said Light of Christ school division chair Glen Gantefoer.
He also said school divisions were informed that an HR compensation line was included as well, with the expectation that school division employees would be asked to take a 3.5 per cent rollback of wages.
“You know and we know and our employees and our unions know this is something they probably don’t have to agree with,” said Gantefoer. He said he wondered what Plan B was if that wasn’t accomplished.
But Doherty would not speculate on what might happen. Instead, he suggested the employers look at options to meet that 3.5 per cent target.
“We are encouraging the employer groups to go back and do everything they can to negotiate that.”
Concern was also expressed from the hospitality sector. Malcolm Anderson of Gold Eagle Lodge made known his disgust with PST now being charged on life, accident and health premiums on employees.
“The hotel industry’s taken a hit all over the place,” said Anderson, who said he was not happy to tell his associates that “the one benefit we are able to give you is now going to be taxed.”
Porta Bella’s owner Terry Caldwell, also a Chamber vice-president, expressed concern about the impact of the PST being imposed on restaurant meals.
“We’ve tried to keep all 35 employees there,” said Caldwell, who noted many other restaurants were in the same boat. “If we see this budget affecting us this year again, we’re going to start laying off.”
Doherty did note that to mitigate the impact, action was taken to extend the PST to stay-at-home meals as well, as that would be competition for restaurant meals.
While there was a general sour mood in the audience, former Battleford mayor Chris Odishaw did express support for the finance minister. He pointed to the province having come through for his town with funding when he was mayor.
“I think there’s no other way to do it and we all have to feel the pain,” said Odishaw of the budget, but “in the long run I think it will be the best thing for all of us.”
