Saskatchewan municipalities should use the recently announced municipal revenue sharing funding prudently to avoid property tax increases in 2021, says the Canadian Federation of Independent Business (CFIB). A CFIB survey revealed that 84 per cent of the province’s entrepreneurs said recent municipal property tax hikes have negatively impacted their business.
Last week, Premier Scott Moe announced that municipal revenue sharing for Saskatchewan municipalities will increase to a record $278 million in 2020-2021. “We recognize the importance of stable, predictable revenue sharing for municipalities, but this shouldn't automatically translate into annual property tax hikes,” said Jennifer Henshaw, CFIB’s Senior Policy Analyst, Prairie. “Given that small business owners are already dealing with a number of cost pressures, we need municipal leaders to commit to holding the line on property taxes to give Saskatchewan’s job creators some certainty and much-needed relief.”
Overall funding under the municipal revenue sharing program will increase to $278 million next fiscal year – a total increase of $27 million over last year (a nearly 11% increase and almost a 119% increase from the 2007-08 fiscal year). The Government of Saskatchewan’s municipal revenue sharing program is based on three quarters of one point of the PST revenue collected from the fiscal year two years prior to the current year.
“We know some municipalities are doing a better job than others. For example, in 2019 and 2020 the City of Estevan did not increase their property taxes. Other municipalities should follow their lead,” added Henshaw. “With Saskatchewan’s entrepreneurs already facing a number of significant challenges, they simply cannot afford to continue bearing the brunt of annual property tax hikes. As one business owner told us: ‘Municipalities need to control their spending and do more with less’.
CFIB urges municipalities to adopt the following recommendations to further contain operating costs in order to avoid future property tax hikes:
Continue to find cost-savings and internal efficiencies by reviewing current programs and services with the objective of identifying programs and service areas that can be eliminated, streamlined, contracted out to the private sector, or sold.
Introduce a plan to reduce the size and cost of the municipal civil service (primarily through attrition and pension reform).
“Some small business owners worry their municipality will continue to hike property taxes to fund unsustainable spending,” concluded Henshaw. “With municipal elections this fall, business owners will be looking for their candidates to commit to saying no to future property tax hikes.”
