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PST and Revenue Sharing

Res #: 13-19M
Number: 13
Year: 2019
Midterm: Yes
Expired: No
Responses Received: Yes
Departments: Saskatchewan Ministry of Government Relations

WHEREAS for the 2017/18 fiscal year forward, the Province of Saskatchewan increased the Provincial Sales Tax (PST) from  five per cent to six per cent and made changes to exemptions under the PST, including to construction and consulting costs where municipalities incur substantial costs, increasing provincial revenues by an estimated $800 million per fiscal year;

WHEREAS the province also made changes to the Municipal Revenue Sharing program in response to these changes to reduce total revenues provided to municipalities from one full point of PST revenues to 0.75 of one full point of PST revenues;

WHEREAS municipalities are incurring additional costs as a result of changes to the PST that are ultimately passed along to ratepayers in the form of property taxation;

WHEREAS the federal government recognizes that goods and services taxes on municipalities are a form of double taxation and provides exemptions for municipalities to be exempt from GST;

BE IT RESOLVED that SARM lobby the Province of Saskatchewan to either make municipalities exempt from Provincial Sales Tax or to restore Municipal Revenue Sharing funding to one full point of Provincial Sales Tax revenues.

Responses From: The Ministry of Government Relations

March 4, 2020

As a result of the program review, in 2019-20 Municipal Revenue Sharing was calculated based on the value of 0.75 of 1 percentage point of the PST (based on total PST collected from two years prior).

The new formula will continue to give municipalities regular, predictable and sustainable funding.

Municipal Revenue Sharing in 2019-20 increased by over four per cent from $241.1 million to $251.6 million even though funding is now based on the value of. 75 of one point of the Provincial Sale Tax.

Municipal Revenue Sharing has increased 98 per cent from 2007-08.

The requirement that municipalities pay the PST is consistent with the taxation treatment of all other public sector bodies including provincial agencies, health districts and school divisions, as well as charitable organizations.

By maintaining a policy of limiting exemptions from the PST base, the Government is able to maintain as competitive a tax rate as possible, while limiting the complexity of tax enforcement and administration for provincial businesses.

J. Greg Miller – Deputy Minister of Government Relations