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Amounts Owing for Work or Services by a Municipality

Res #: 17-18M
Number: 17
Year: 2018
Midterm: Yes
Expired: No
Responses Received: Yes
Departments: Saskatchewan Ministry of Government Relations

WHEREAS Section 405 (3) of The Municipalities Act states: “At the end of a year in which work or services mentioned in subsection (1) were performed, the municipality may: (a) add to any arrears of taxes on land owned by a person in the municipality any amount with respect to such work or services performed for that person that remains unpaid at the end of the year;”

WHEREAS this gives administrators two options for any invoices that occur in late November or December:

  • Add any outstanding invoices to taxes as of December 31, which means they will start accruing interest on January 1, or
  • Have no recourse to collect for the invoice except to pursue the collection via the court system;

WHEREAS it seems unfair to have a ratepayer pay interest on custom work that occurs on December 28 if he or she pays the bill on January 3;

BE IT RESOLVED that SARM lobby the government to amend Section 405 (3) of The Municipalities Act to state: “Within twelve months of which work or services mentioned in subsection (1) were performed, the municipality may: (a) add to any arrears of taxes on land owned by a person in the municipality any amount with respect to such work or services performed for that person that remains unpaid.”

Responses From: Saskatchewan Ministry of Government Relations

December 21, 2018

  • Section 405(3) provides options for the municipality to add unpaid payments to arrears of taxes on land, or to add that amount to the taxes owed on the land. Both options are discretionary (“the municipality may”), and it is not required for the municipality to perform either of these actions at the end of the year.
  • If a municipality chooses to add unpaid invoices to taxes at the end of the year, even if the work was only recently completed, it also has the power to abate the interest penalty, as per section 274, if the invoice is paid within a reasonable time period.
  • As part of its consideration of amendments to The Municipalities Act, government will consider changes that allow a more flexible timeline in these circumstances.

Keith Comstock – Assistant Deputy Minister, Saskatchewan Ministry of Government Relations