Allowing Property-Subclasses for All Municipalities
Whereas there are inequities within classes of property between assessments and taxation; and
Whereas Section 254 of the Cities Act allows for subclasses of property for the purposes of establishing tax rates which is a useful tax tool; and
Whereas the Education Property Tax Regulations allow the Province and Separate School Divisions the authority to subclass property for taxation purposes; and
Whereas Cities and the Province have used this legislation to sub-class property for taxation purposes, as evidence that it is a useful and necessary tax tool; and
Whereas many municipalities struggle with mitigating the inequities within classes of property for Municipal Taxation;
Therefore be it Resolved the Municipalities Act be amended by adding under Division 7, Imposing and Calculating Tax:
Classes and sub-classes of property
(1) A council may establish classes and sub-classes of property for the purposes of establishing tax rates.
(2) The Saskatchewan Assessment Management Agency shall determine to which class or sub-class any property belongs.
ACTS AFFECTED: The Municipalities Act
REGION/SECTOR AFFECTED: Towns, Villages, Resort Villages, Northern Municipalities
Ministry of Government Relations' Response
- Government needs to consider the viewpoints of all parties involved and impacted by local tax policy decision, including industry, and must consider the impact on the broader economy and the province's competitiveness.
- The commercial/industrial sector currently feels some municipalities are using existing tax tools within the property tax system, such as mill rate factors, to target or single out certain properties. Industry strongly opposes any changes that would expand the authority to further differentiate the tax levy for the commercial/industrial property class, or parts of it.
- The Ministry of Government Relations' recent review of the use of local tax tools shows there are already issues around the fairness of the application of tax tools. Separating specific industries from the commercial property class could undermine government's focus on facilitating growth and may reduce Saskatchewan's economic competitiveness for some industries.
- The smaller number of diverse properties in smaller communities means tax shifting resulting from sub-classification could be more pronounced, and single out only a few specific properties.
- Municipalities currently have the ability to either partially or fully exempt or abate municipal taxes. This can be done to provide small business a lower tax rate if desired.
- The Ministry of Government relations will continue to investigate new mechanisms that will fairly balance the needs of municipalities and industry.