Saskatoon city council held a special meeting on Sunday to analyze the impact of the 2017-18 Saskatchewan budget.
Councillors spent hours brainstorming ways the city can cover the $11.4 million yearly revenue loss from cancellations of grants-in-lieu payments from SaskEnergy and SaskPower.
READ MORE: Saskatoon facing ‘immediate fiscal crisis’: Mayor Charlie Clark
In the end, council decided to pursue legal action via an injunction over the grant payment cut.
Just a quarter into the 2017 fiscal year, last week’s budget has left an immediate $8 million hole to fill.
“Unlike other levels of government we can’t run a deficit by law and so we have a real problem on our hands,” Mayor Charlie Clark explained.
Historically, the provincial government and city haven’t paid each other taxes. Instead, the provincial government has paid the city a grant equal to the amount of property taxes and rights of way on SaskPower and SaskEnergy utilities.
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After Wednesday’s budget, the Saskatchewan government will still collect that revenue from the Crown corporations, but not pass it onto the city.
“This is a transfer of a tax burden from one level of government to another because they can,” Ward 5 Coun. Randy Donauer said.
Ward 10 Coun. Zach Jeffries argued this is an unequal burden to bear for Saskatoon.
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“I think it needs to be well reported that this targets urban municipalities and is not affecting folks equitably across our province,” Jeffries said.
Council discussed whether or not to dip into its about $140 million base reserve to pay for funding, increase taxes by 5.63 per cent, cut services, or a combination of all three.
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Unique ideas were also brought forward on how to get money from the province.
These included Coun. Bev Dubois’ idea to look into the city’s special agreement with the province, where the city gets paid just one dollar a year for P3 school sites.
Donauer brought forward the idea to charge the province for emergency services on its properties and asked if Saskatoon has a legal case to challenge Wall’s decision.
By the end of the meeting, council decided to pursue an injunction in court over the removal of grants-in-lieu payments. The city will team up with other municipalities and the Saskatchewan Urban Municipalities Association (SUMA).
Council also backed a temporary hiring freeze at the city.
Clark said that before any decisions are made, he’s going to meet with Government Relations Minister Donna Harpauer on Wednesday, to clarify why the decision was made and consider if it can be renegotiated or cancelled all together.
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