Fuel Tax Rebate

Res #: 15-15A
Number: 15
Year: 2015
Midterm: No
Expired: Yes
Responses Received: No
Departments: Saskatchewan Ministry of Finance

WHEREAS municipalities are required to pay provincial taxes applied to all diesel fuels and gasoline; and

WHEREAS in the case of municipalities the tax on fuel that is used to run municipal equipment is a tax on Local Governments and the ratepayers they serve; and

WHEREAS that in the Province of Alberta municipalities benefit from having a Prescribed Rebate Off-Road Percentages Program where a rebate of fuel tax paid on clear fuel dispensed into licensed equipment and unlicensed equipment used for municipal operations, where marked fuel was not reasonably available is issued;

BE IT RESOLVED SARM lobby the Provincial Government to permit municipalities to use marked fuel in municipal equipment and that they provide a fuel tax rebate program to assist in reducing a municipality's overall operating costs, which would benefit the ratepayers of the municipality which are also taxpayers of the Province.


Regarding the resolution that municipalities be permitted to use marked fuel in municipal equipment and that a Fuel Tax Rebate Program be provided, I note that the Government  of Saskatchewan provides support  to municipalities through direct funding rather than tax exemptions. This ensures consistent support is provided to all municipalities and permits individual municipalities to make autonomous decisions on the expenditures  they undertake, without complicating the administration of the provincial Fuel Tax.

The Fuel Tax is applicable  to all "on-road" vehicles with only fuel used for farming and other specified "off-road" commercial enterprises (logging and trapping)  being Fuel Tax exempt. The Fuel Tax Accountability Act requires that eligible on-road Fuel Tax revenue be dedicated to provincial transportation spending for the benefit of all Saskatchewan residents.  Further, Fuel Tax exemptions could reduce the amount  available for transportation spending.

I note that SaskPower was created to develop a single provincial electrical grid system. In order to join the provincial grid system,large urban municipalities agreed to transfer their generation and electrical distribution to SaskPower for a set capital price and the negotiation of grants-in-lieu payments. These payments  were intended to compensate the respective municipalities for ongoing revenues that would be forgone as a result of transferring their electrical systems. Conversely, smaller municipalities and RMs do not receive these compensatory  payments because they did not have electrical systems to transfer to SaskPower and there was no loss of revenue to them.

Thank you for providing the opportunity to comment on these resolutions.