Mill Rate Factor Limits
Res #: 17-15A
Responses Received: No
Departments: Saskatchewan Ministry of Government Relations
WHEREAS the amount of oil production has steadily increased every year over the past ten years and with that comes the pressure of having all roads maintained year round to allow wells to be accessible which ends up costing Municipalities thousands of extra dollars each year; and
WHEREAS the Government has been lowering the Mill Rate Factor Limits each year over the past two years meaning those extra tax dollars are being made up by the average agricultural and residential land owners taxes; and
WHEREAS based on a study done by the North Central Transportation Planning Committee, in 2013 the municipalities in the heavy oil areas have anywhere from 30 – 80 times more oil trucks than agricultural trucks; and
WHEREAS municipalities have the responsibility to set taxes on property classes based on the municipality they are in and the needs that municipality requires;
BE IT RESOLVED that SARM lobby the Provincial Government to ensure that there are no further decreases to the Mill Rate Factor Limit so that municipalities can provide for annual predictable and stable funding when setting their taxation policy.
MINISTRY OF GOVERNMENT RELATIONS' RESPONSE
- The Ministry of Government Relations has analyzed municipal practices. It was found most commercial and industrial properties pay higher municipal property taxes when compared with agricultural and residential properties, due to the use of local tax tools by municipal councils, including mill rate factors.
- Limits on local tax tools may be established to address situations where tax rates applied to one class of property are deemed to be unfair, compared with tax rates applied to another class of property. Such limits are not intended to second-guess a municipal council's budget decisions relating to how much tax revenue it needs to meet a particular expenditure level to provide services or infrastructure. Tax tools were originally intended to cushion the tax shifts from revaluation.
- Government's goal is to support sustained growth and prosperity, as outlined in the Saskatchewan Plan for Growth. Government is committed to removing barriers that may place unnecessary delays or burdens on industry competitiveness and growth.
- Government is currently reviewing industry financial contributions to RMs, rural road infrastructure and RM accountability. The objective is to develop policy that will assist both the business sector and local governments in addressing the challenges of Saskatchewan's economic growth, in terms of providing necessary services and infrastructure, but without creating obstacles in terms of competitiveness and growth.
- The ministry will continue to monitor and analyze local tax tools and recommend any adjustments or limits as advisable for subsequent taxation years if warranted.
- A few RMs responded to the limits on mill rate factors by introducing other new tax tools, such as base tax. Authority to introduce limits on minimum and base tax has been added to The Municipalities Act and it seems this may have to be considered as well, based on the actions of a few RMs.