Municipal Surcharge

Res #: 9-19A
Number: 9
Year: 2019
Midterm: No
Expired: No
Responses Received: Yes
Departments: Saskatchewan Ministry of Finance

WHEREAS a municipal surcharge is levied on SaskPower and SaskEnergy customer invoices in urban municipalities;

WHEREAS the fees collected by SaskPower and SaskEnergy, and then remitted to the urban municipality, are often utilized to offset the cost of power and energy to their municipal buildings and recreational facilities;

WHEREAS the current practice of levying municipal surcharges no longer applies to an urban municipality after it has dissolved into a rural municipality thereby these funds are lost to the restructured municipality regardless of whether its expenses have changed;

BE IT RESOLVED that SARM lobby the provincial government to continue to levy a municipal surcharge on SaskPower and SaskEnergy customer invoices in restructured urban municipalities and resultant special service areas. 

Responses From: The Ministry of Government of Relations

April 18, 2019

The SaskEnergy Act and The Power Corporation Act requires Sask Energy and SaskPower to levy a 5 (five) per cent municipal surcharge on their customers in an urban municipality and remit the charge to the urban municipality unless the municipality has opted out.

The municipal surcharge was put in place to compensate urban municipalities for giving up the right to establish their own natural gas or power distribution systems.

An urban municipality that dissolves and restructures into a rural municipality is no longer an incorporated urban municipality and therefore has no claim to the municipal surcharge.

Rural municipalities are entitled to the former urban municipality's grants-in-lieu of property taxes related to SaskEnergy and SaskPower, if a property owned by either party exists in the municipality.

Warren Kaeding – Minister of Government Relations

Response From The Ministry of Finance:

April 11, 2019

With respect to that resolution, I would note that the Farm Fuel Program and the marked fuel program are intended to reduce fuel costs for farmers and other primary producers (commercial loggers, fishers and trappers). Marking fuel deters farmers from diverting farm fuel to diesel equipment used for ineligible activities (road work, commercial construction, etc.). It is a valuable tool, aiding Finance in its enforcement and compliance efforts. Extending this fuel tax exemption to municipalities, but not to other sectors for similar construction and maintenance activities, would cause inequalities between sectors, would be difficult to enforce and would also dramatically increase the cost of the program.

At this time, I feel that our Government has achieved a good balance between necessary changes to our revenue base and fairness to our taxpayers.

Now that we have achieved our goal of returning to fiscal balance, we want to ensure that this fiscal position is sustainable into the future, at which time we will be able to take a fresh look at our entire range of tax policies, to determine whether we might be able to provide some tax relief to our residents in areas where it is most needed and would have the greatest economic impact.

Donna Harpauer – Minister of Finance