Saskatoon 2nd day of city budget delves into events venues and tax ratios

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Saskatoon 2nd day of city budget delves into events venues, tax ratios
WATCH: Saskatoon city council began day two of its long-awaited budget deliberations on Wednesday. As Global's Easton Hamm reports, some savings were found among lots of disagreement. – Nov 29, 2023

Saskatoon budget deliberations continued on Wednesday, diving into the arts, culture and event venues business plan and budget as well as several general reports.

Tammy Sweeney, TCU Place’s CEO, said things haven’t recovered to pre-pandemic numbers yet, but there has been increased use of the convention centre and theatre.

The arts, culture and events venues business plan and budget for the next two years had two recommendations on the table: That the operating budget for 2024 totalling $9,873,100 in expenditures be approved and that the operating plan for 2025 totalling $10,155,600 in expenditures be approved.

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Increases of $175,700 (1.8 per cent) and $282,500 (2.9 per cent) were projected for the business line.

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Sweeney said they are seeing smaller national and international events and a lot of short-term bookings, noting larger events are booking six months ahead, rather than how they used to, booking 18 months to two years ahead of time.

Sweeney said the convention side may not be back to normal, but they are expecting a record year in the theatre, surpassing the past 30 years.

The budgets from the Remai Modern Art Gallery, SaskTel Centre and TCU Place encompassed in the recommendations were passed by council.

Next up were general reports, with city administration delving into topics like how inflationary pressures are affecting construction and maintenance in the city, full-time equivalent positions and reductions to the capital reserve contribution.

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Through one of the general reports it was noted that Saskatoon has low business property tax comparative to the rest of the country.

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City administration noted that overall property taxes in the city were divided with roughly 67 per cent of it being covered by residents and 33 per cent covered by the non-residential sector.

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Coun. Hilary Gough asked what it would look like for Saskatoon residents if that percentage were to shift.

The city’s chief financial officer Clae Hack gave an example, saying if they shifted the ratio from 1.59 to 2.0, he said the property taxes for a house valued at $370,000 would go down by 4.94 per cent on average.

“While a commercial property would see about a 10.3 per cent increase.”

He clarified that wouldn’t include the property tax increase that they are already looking at.

Gough asked if it was possible to create a sub-class for small businesses, saying currently that all commercial property owners are currently being treated the same.

It was noted that it was possible, they’d just have to find a way to define what a small business was.

Coun. Mairin Loewen put forward two motions, saying she wanted to have a discussion regarding Saskatoon’s property tax ratio.

“If our ratio sat in a different place relative to our comparators that would be a question that I wouldn’t be willing to entertain,” Loewen said.

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She said her other motion was to create a small business taxation sub-class.

Loewen said these were separate motions, noting they were no interdependent and read as follows:

  • That the current tax ratio be shifted from 1.59 to 1.75.
  • That the administration report back regarding the potential to create a small business taxation sub-class and potential tools to mitigate impacts on small businesses.
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Hack noted that if the first motion passed residential property owners would see an average of a 2.01 per cent increase in property taxes where commercial property owners would see an increase of 4.23 per cent.

Coun. Randy Donauer said this doesn’t address city spending and that it would only shift the burden and he wasn’t in support of it.

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Coun. Cynthia Block also put forward a motion for a report on business tax ratios and their impact on economic indicators.

The first motion that would shift the tax ratio was defeated, but the other two carried.

When the topic of capital reserve contribution reductions came up, Donauer put forward a motion to see a three per cent reduction to all capital reserve contributions affecting the mill rate except for fire and roadways in 2024.

He said a significant portion of spending each year is due to capital, saying that cutting out capital programs doesn’t affect the mill rate, but said changing the contributions to capital will.

Donauer said there was concern amongst councillors to touch capital reserve contributions, adding he was one of the ones concerned, but noted that contributions each year would still see a big jump.

Hack noted that reduction would equate to $1.4 million.

Coun. Troy Davies suggested that the reduction be raised to four per cent, saying they’ve heard residents say they can’t afford this tax base.

“I think we have to make some bold moves here to get the ball rolling, because it’s not rolling at all at this point,” Davies said.

He warned that if more drastic measures aren’t taken the city could see a seven per cent property tax increase or possibly higher.

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Donauer’s motion carried on a 6-5 vote, with councillors Sarina Gersher, Loewen, Block, Gough and Mayor Charlie Clark in opposition.

Other items in the agenda included general reports around full-time equivalent positions, as well as business line reports that come with several recommendations in each report.

Thursday marks the last of the three days allocated to go over the city’s budget.

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