PDAP Municipal Equipment Rates

Res #: 20-12M
Number: 20
Year: 2012
Midterm: Yes
Expired: Yes
Responses Received: No
Departments: Saskatchewan Government Relations

WHEREAS the Provincial Disaster Assistance Program (PDAP) uses the Saskatchewan Heavy Construction Association (SHCA) equipment rental rates to establish compensation under the program; and

WHEREAS PDAP only uses a portion of SHCA equipment rental rates to calculate reimbursement to municipalities for use of their own equipment for disaster related work; and

WHEREAS the reimbursement rates for the use of municipal owned equipment are less than half of the rates reimbursed to municipalities to contract out the disaster related work;

BE IT RESOLVED that SARM lobby the Provincial and Federal Governments to increase rates paid to municipalities for use of their own equipment under the Provincial Disaster Assistance Program to be more consistent with the reimbursement paid to municipalities to hire contractors to complete the same work.

Response from Honourable Jim Reiter, Minister of Government Relations:

The current reimbursement rates are based on a formula provided by the federal government. The ministry committed to looking at this formula and has completed this work. The analysis has shown that any change made which increases reimbursement levels would not be supported by the federal government. For example, if the current percentage factor in the formula was increased from 40 per cent to 60 per cent, the estimated unrecoverable cost to Saskatchewan would be $3.1 million (e.g. a 2010 scale event); it could easily exceed $10 million for a larger disaster (e.g. a 2011 scale event)

The federal government provides the standard formula to be used for reimbursement rates, which is linked to the provincial heavy equipment rental rates established each year by the Saskatchewan Heavy Construction Association (SHCA). In addition to fuel, oil and lubrication, the rate guide takes into account other factors such as capital depreciation, usage/load factors, insurance, repairs, overhead and financing costs.

The province will continue to lobby the federal government for additional resources in this area. Federal officials have confirmed that they will not accept any change to their formula which results in increased reimbursements.