Residential Assessment Class

Res #: 8-13M
Number: 8
Year: 2013
Midterm: Yes
Expired: Yes
Responses Received: No
Departments: Saskatchewan Government Relations

WHEREAS residential assessment is a large part of many RMs in the North West (NW); and

WHEREAS the cap on the mill rate factor policy (15:1) results in more than a million dollars of loss to the RM of Mervin and even more to other surrounding RMs; and

WHEREAS it was announced after RMs made capital expenditures which we are now committed to paying; and

WHEREAS it has resulted in some RMs cutting many other worthwhile and essential projects from budgets i.e. weed and brush control; and

WHEREAS those RMs that have been using the mill rate factor responsibility are being severely impacted by the actions of a few who abused their taxing privileges; and

WHEREAS we have tried to accommodate the oil companies trucking oil in the NW area by, for example, using discretionary weight restrictions, not imposing road bans or permitting; and

WHEREAS such accommodation will have to change if RMs have less money to work with in order to save our roads, which has already and may continue to dramatically increase the workload of administrative staff; and

WHEREAS there is going to be negative reaction from ratepayers when they see the oil industry paying less than its share of taxes when it is creating the majority of the road damage; and

WHEREAS the residential assessment class should be removed from the mill rate cap equation;

BE IT RESOLVED that SARM lobby the Ministry of Government Relations to remove the residential class from the mill rate factor cap equations.

Response from Jim Reiter, Minister of Government Relations and Minister Responsible for First Nations, Metis and Northern Affairs

•   In order to mitigate property tax shifts to commercial and industrial from agricultural and residential property and build on the interim measure of a 15.0 highest to lowest mill rate factor ratio limit, it has been announced that:

o     The ratio of highest to lowest mill rate factors implemented by a municipality will be limited to 9.0 for all municipalities based on the recent ministry review.

o         Regulatory amendments under The Cities Act, The Municipalities Act, and The Northern Municipalities Act, 2010 retroactive to January 1, 2014, will be made in order to implement this for 2014.

o     The Ministry of Government Relations will continue to closely monitor and analyze the use by local municipal councils of all local tax tools.  Municipalities should continue to strive for taxation fairness and if there are indications of misuse, government may make adjustments, if warranted, in subsequent years.

•     Some RMs with a commercial and industrial property tax base limited to a particular industry, such as oil and gas, have displayed a tendency to shift property tax off agricultural land and/or residential properties, making the industrial sector bear an extremely large percentage of municipal property tax for the RM.

•    A number of the RMs affected by the new limit were in fact using mill rate factors to shift tax from residential to commercial and industrial properties.

•    Limits on mill rate factors are recommended to address situations where the tax rates applied to one class of property are deemed to be unfair compared to intended to second guess a municipal council's budget decisions relating to how much tax revenue it needs to raise to meet a particular expenditure level required to provide services or infrastructure.  Tax tools were originally intended to cushion the tax shifts from revaluation.

•    Government is taking this action in the interests of protecting Saskatchewan's Plan for Growth.  Tax fairness is a key consideration.  Fairness generally depends on one's perspective, but relative differences from the way other taxpayers are treated tend to be important.

Updated response from the Ministry of Government Relations dated July 4, 2017