WHEREAS the Rural Municipal Tax Loss Compensation Trust Fund was established to compensate rural municipalities for lost tax revenues resulting from lands situated within a rural municipality being set apart as reserve under the Treaty Land Entitlement and Specific Land Claims order; and 

WHEREAS the contributions for reserve lands and subsequent investment returns were intended to compensate rural municipalities for tax losses “in perpetuity”; and 

WHEREAS the current economic decline has adversely affected the investment pool resulting in attributable payments and expenses exceeding the investment income thereby placing rural municipalities in a deficit position; and 

WHEREAS should these deficits continue, the account will be fully depleted leaving the municipality without any tax loss compensation monies; and 

WHEREAS this deficit position is not exclusive to a select number of RMs but can and may affect any or all RMs; 

BE IT RESOLVED that SARM enter into negotiations with Canada and Saskatchewan to actively pursue a resolution to the unanticipated shortcomings of the Tax Loss Compensation Agreement thereby ensuring all municipalities, present and future, receive the compensation to which they are entitled.

Response from Trisha Delormier-Hill, Executive Director, Lands and Resources, Ministry of First Nations and Metis Relations:

This letter is in response to Saskatchewan Association of Rural Municipalities' request to enter into negotiations with Canada and Saskatchewan to address shortcomings in the investment income generated for Rural Municipalities through the Rural Municipal Tax Loss Compensation Agreement.

While we appreciate your concerns in light of the global economic recession, Canada and Saskatchewan do not feel there are grounds to negotiate an increase in the tax loss compensation amounts based on the information provided. The Agreement also does not contain a provision for renegotiating its terms. As you are aware, investment income is fluid and will wax and wane over time, and the tax loss compensation amounts payable under the terms of this Agreement increase over time given they are based on the property's mill rate and assessment figures from the calendar year before reserve creation.

We will continue to honour our commitments under this Agreement in support of the Treaty Land Entitlement process.