Use of Marked Diesel Fuel in Municipal Equipment

Res #: 8-19A
Number: 8
Year: 2019
Midterm: No
Expired: No
Responses Received: Yes
Departments: Saskatchewan Ministry of Finance

WHEREAS municipalities are required to pay provincial taxes on diesel fuel;

WHEREAS municipal equipment is required to repair and maintain public roadways;

WHEREAS the fuel used to run municipal equipment is a tax on local government and the ratepayers they serve;

BE IT RESOLVED that SARM lobby the provincial government to permit municipalities to use marked diesel fuel in municipal equipment, thereby reducing the cost of road repair and maintenance.         

Responses 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