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Payments in lieu issue explodes at legislature

The week of March 27 to 30 at the legislature was dominated by debate over the fallout from the provincial budget the previous week.
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The week of March 27 to 30 at the legislature was dominated by debate over the fallout from the provincial budget the previous week.

More specifically, it was the cut to grants in lieu to municipalities that took centre stage during the week, with mayors and councils across Saskatchewan venting outrage about the impact to their revenues.

Nicole Rancourt, MLA for Prince Albert Northcote, raised the issue in question period Monday with Minister of Government Relations Donna Harpauer. That exchange was recorded in Hansard.

Ms. Rancourt: — Mr. Speaker, it doesn’t sound like the minister is getting the message: stop cutting Meewasin Valley Authority and keep your hands off of Wascana Park. And, Mr. Speaker, they should also keep their hands off slapping our municipalities in other ways, too.

They’re downloading $36 million onto municipalities by cutting grants in lieu of taxes at SaskPower and SaskEnergy. And because municipalities can’t run deficits, the Sask. Party is forcing even more tax hikes with their budget.

Why is the minister forcing municipalities to pick up the tab for the last decade of Sask. Party mismanagement, scandal, and waste?

The Speaker: — I recognize the Minister of Government Relations.

Hon. Ms. Harpauer: — Mr. Speaker, just to be clear, we’re not taxing the municipalities. We don’t have that authority. But however, there were very, very difficult decisions that had to be made in this budget. And we were very clear with all our third party partners in every sector that we were going to all work together and share in the pain of bringing our budget to balance, and bring it to balance we will, Mr. Speaker.

There has been no sector that has received more support from this government than our municipal partners. Municipal revenue sharing has more than doubled from this government, and for the cities of Regina and Saskatoon it has been two and a half times as much as it used to be under the previous administration which, if the members opposite forget, the previous administration were NDP, Mr. Speaker.

Since we formed government, almost $2 billion has flowed through that program to our municipal partners. Mr. Speaker, when we spoke with SUMA [Saskatchewan Urban Municipalities Association] and SARM [Saskatchewan Association of Rural Municipalities], the Premier was very clear time and time again. Everything was on the table including grants in lieu.

The Speaker: — I recognize the member from Prince Albert Northcote.

Ms. Rancourt: — Mr. Speaker, they’re the ones that got us in this financial mess. They are responsible. If the minister won’t take my word for it, maybe she’ll listen to Saskatchewan’s mayors. Regina Mayor Michael Fougere said, “That is significant downloading to our city.” The Saskatchewan Urban Municipalities Association said, “Our members are outraged, and so are we.” Saskatoon city councillor and former Conservative candidate, Randy Donauer, said, “This is a transfer of a tax burden from one level of government to another because they can.”

These municipal leaders are rightly and understandably outraged over the government’s shortsighted and irresponsible decision to cut a vital source of funding for urban communities. Will the minister do the right thing and stop these cuts, or will she keep plowing ahead with her plan for fewer services and higher taxes?

 The Speaker: — I recognize the Minister of Government Relations.

Hon. Ms. Harpauer: — Mr. Speaker, the cities that the member opposite was just talking about, quite frankly, have pretty significant reserves. And, Mr. Speaker, I wouldn’t call transferring almost $2 billion to our municipal partners downloading. I’d actually call it uploading, Mr. Speaker. And I don’t think they want to go back to the revenue-sharing formula that was under the NDP. Oh, but there was no formula. They had to guess from year to year what else the NDP would cut when they were in power, Mr. Speaker.

On top of the record municipal revenue sharing, Mr. Speaker, this government has made record infrastructure investments in our major communities around this province. Mr. Speaker, the revenue sharing to Saskatoon and Regina alone have each increased by over two and a half times, Mr. Speaker. But we know this is a challenging budget, Mr. Speaker. We know we all have responsibility to help us bring the government back to balance.

Tuesday, with Saskatchewan Urban Municipalities Association president Gordon Barnhart at the legislature, the issue was raised again during question period by Opposition leader Trent Wotherspoon. The exchange with Premier Brad Wall on the issue is below, as recorded in Hansard.

 Mr. Wotherspoon: —   … You know, meanwhile, that the Premier and along with him all the members opposite have broken faith with Saskatchewan people and thrown out agreements with our cities and towns. Mr. Speaker, they’re changing the law so they can rip tens of millions of dollars that are needed away from our cities and towns.

Mr. Speaker, former Conservative candidate and current Saskatoon city councillor Randy Donauer said, “This is a transfer of a tax burden from one level of government …” It’s certainly that, Mr. Speaker.

To the Premier: why is the Sask. Party defending their wealthy supporters, foreign corporations, while punishing Saskatchewan people by ripping millions of dollars away from our cities and towns?

The Speaker: — I recognize the Premier.

Hon. Mr. Wall: — Mr. Speaker, since our government was elected in 2007 and our first budget 2007-2008, the cumulative inflation since then has been 18 per cent. The increase in operating for K to 12 has been 31 per cent; the increase in operating for universities and Sask Poly, 45 per cent; the increase in operating dollars for our health authorities, 59 per cent.

But the clearest winner in terms of this government’s investments has been the municipal sector because their funding is up 103 per cent, Mr. Speaker. And there are no strings attached to that money. They can use it for operating. They can use it for capital. And in this budget, a very difficult budget, that revenue-sharing agreement was preserved, Mr. Speaker.

There have been some decisions with respect to grants in lieu. I know that representatives of our cities will be meeting with the ministers responsible, I think tomorrow, to further discuss the matter. But, Mr. Speaker, when the member quotes the councillor from Saskatoon, he should know that in 2007, when those folks had the chance to do more than talk, they were receiving … Saskatoon received from the NDP $17.8 million in revenue sharing, and they were sitting on a mountain of money, about a half billion dollars. That’s what they gave to the people of Saskatoon. This year … [inaudible interjection] … Well, Mr. Speaker, they don’t want to hear the answer. They received $17 million from the NDP. And, Mr. Speaker, in this budget year from our government, Saskatoon will receive $46 million. That’s an increase of 161 per cent.

Yes, Mr. Speaker, we’re asking them to accept part of the challenge we all face, a $10 million reduction in grant in lieu. That leaves Saskatoon, net to the good, $36 million.

The Speaker: — I recognize the Leader of the Opposition.

Mr. Wotherspoon: — Sorry, Mr. Speaker, I missed that in the SUMA speech that the Premier gave just a couple months ago here. You know, and he doesn’t have to take my word for it; he could ask the president of SUMA, Dr. Gordon Barnhart, who’s here today. Or we could read the quote of Yorkton Mayor Bob Maloney who said, “Just to pass along what’s been dumped on our plate we would need a 10 per cent increase in taxes.” Ten per cent increase. Mr. Speaker, let’s be clear: those tax hikes are Sask. Party tax hikes. Cities and towns aren’t happy. North Battleford Mayor Ryan Bater said “… outrage is putting it lightly. We were absolutely blindsided by this budget.”

The Moose Jaw city manager Matt Noble said, “total blindside.” Regina’s mayor, Michael Fougere, said that this came “out of nowhere.” Mr. Speaker, even former Sask. Party candidate and current city councillor Bob Hawkins said this budget comes like ... Well, you know, I’m not sure I can finish this quote without getting tossed from here, Mr. Speaker.

To the Premier again: why is the Sask. Party attacking our communities and attacking Saskatchewan families, breaking his promises, and hiking taxes while he has giveaways for the wealthy and well connected? Why didn’t he at least have the decency, the decency to come clean with our cities and towns?

The Speaker: — I recognize the Premier.

Hon. Mr. Wall: — Mr. Speaker, I’m not sure if the Leader of the Opposition was at the SUMA meeting where I spoke ... [inaudible interjection] ... Well he says he was. If he was there, he would know ... If he was there, he would know I expressly mentioned as a part of the list of things on the table, grants in lieu.

Well he’s smiling. Mr. Speaker, we see this time and time again where the member opposite will stand up and characterize something, including commitments I made on taxes — that was his tack last week — and he’s proven to be wrong, Mr. Speaker.

In the case of SARM, the speech to SARM, we also indicated at SARM specifically that grants in lieu would be on the table. Well it was in the speech, Mr. Speaker.

Moreover I think we were pretty clear at both SUMA and SARM that we had a $1.2 billion revenue challenge. And so, Mr. Speaker, notwithstanding the fact that this side of the House has doubled municipal revenue sharing, Mr. Speaker — for our two largest centres, it has gone up by two and a half times, Mr. Speaker, since we formed government — notwithstanding that, we’ve asked them to share in the challenge of the budget in terms of grants-in-lieu. They’ll all be still net to the positive. They’ll all be significant, more support from our government than there ever was from the NDP, and that doesn’t count the infrastructure dollars in Saskatoon, 125 million alone, and when you count the stadium in Regina, 127 million.

Mr. Speaker, we’ll continue to work towards a meaningful partnership with the municipal sector that’s more than just speeches and words, that’s actually informed by a record of more dollars on a revenue-sharing basis and more dollars on a capital basis.