Resolution 4-07A
Gravel Extraction Fees

WHEREAS, the gravel extraction fees were last updated in 1986; and

WHEREAS, Government Relations made a commitment to undertake a review of the fees associated with the licensing of gravel extraction during the 2003 – 2004 fiscal year; and

WHEREAS, there have been no changes or increases in 20 years to the outdated extraction fee;

THEREFORE BE IT RESOLVED, that SARM request the Government of Saskatchewan adjust the gravel extraction fee for municipalities to a reasonable level of compensation.

Response from Honourable Harry Van Mulligen, Minister of Government Relations:

• Government Relations (GR) has undertaken a review of gravel extraction licence fees.  SARM and other stakeholders directly affected by these licence fees were consulted in 2006 to assist in the development of a discussion paper.  The report has been shared with the SARM and other stakeholders for their comment.  Review of Licence Fees for Gravel Extraction (Discussion Paper) was mailed to affected stakeholders in early March 2007. 
•  Once all responses are received from review participants, consultations could then be arranged, as necessary.  From these consultations, it is expected that a recommendation (or recommendations) could be developed as to what course of action government should take with respect to gravel extraction licence fees.
• Key observations from the review were: 

– Further clarification is required regarding legislative authority for RMs and what is intended by the legislation — Is this a licence fee or a tax?  Does this contravene the Eurig decision of the Supreme Court relating to licence fees?

–  Few RMs appear to charge a gravel extraction licence fee and revenues from these fees do not appear significant for many RMs.   

– SARM, the Rural Municipal Administrators Association of Saskatchewan (RMAAS) and the Road Builders and Heavy Construction Association of Saskatchewan (RBHCA) all favour a set licence fee over a return to a system of assessing and taxing gravel extraction equipment.

– Difficulties with the licence fee for contractors relate to the inconsistent application of the fee among RMs and its effect on business.  Problems for some RMs relate to the collection of fees and with tracking how much gravel is removed from pits within RMs.

–  If the licence fees are to be increased, the rate of inflation (since 1997) was suggested by SARM and RMAAS as an approach upon which to base a fee increase.  RBHCA and its members are reluctant to increase licence fees.  The RBHCA feels any increased costs will affect its members’ businesses.

– Alberta regulations established a Community Aggregate Payment Levy (CAPL) effective January 1, 2006.   Legislation enables municipalities to set CAPL rates up to, and including, a maximum rate set in regulation by the province of $0.25 per tonne of aggregate shipped.  The CAPL is a tax.

– Manitoba adopted Saskatchewan’s schedule of fees for gravel extraction for the mining of sand and gravel under regulations, and developed a separate schedule of fees for the hauling of sand and gravel under the same regulation.   Manitoba is currently reviewing its system.

– An examination of the original rationale and other understandings concerning the rationale, combined with the lack of clarity regarding the legislative authority all point to a need to clearly establish a rationale and justify this licence fee.