The provincial government shouldn’t be messing with the revenue sharing formula it has with municipalities.
In what I think is one of the better ideas of the Brad Wall reign, an agreement was signed years ago where the province agreed to give municipalities an amount each year equal to what was raised by one per cent of the PST.
By doing this, communities had a stable source of revenue they can count on that grows – and shrinks – with the economy.
The problem is the provincial government keeps making noises that it wants to change it.
In 2017, Wall warned the attendees at the Saskatchewan Urban Municipalities Association conference the formula could be changed to balance the budget. In the end, it wasn’t touched – the government chose a different grant to cut – but it caused chaos among municipalities as they waited to see if they’d have the money they were relying on.
This year, we have a new premier again telling municipalities it wants to change the formula – though it probably wouldn’t touch it until next year.
The reason: a whole bunch of items are no longer exempt for PST, meaning that PST generates more money. The province wants to keep that money instead of passing some of it to municipalities.
If the province wants to give municipalities stability and predictability when it plans its budgets – something that’s good for taxpayers – it needs to stop making annual suggestions that it’s looking at changing the revenue sharing formula.
