Resolutions

Whereas municipalities in Saskatchewan are limited in their ability to generate revenue, relying predominantly on property tax, which places a disproportionate burden on property owners and restricts fiscal flexibility; and

Whereas alternative revenue tools, including taxes and levies for infrastructure have been utilized in other jurisdictions to diversify municipal funding and reduce reliance on property taxation; and

Whereas the collection of provincial education property tax by municipalities imposes an administrative burden without corresponding compensation; and

Whereas removal of the payments in lieu for forgoing electrical generation have resulted in revenue losses; and

Whereas municipalities are required to pay Provincial Sales Tax (PST) on construction projects, further increasing costs and limiting the scope of infrastructure investment; and

Whereas municipal revenue sharing has provided valuable support to Saskatchewan municipalities, and any changes to municipal revenue tools should consider the importance and continued role of revenue sharing in supporting local government sustainability;

Therefore be it resolved that SUMA:

1. Advocate the Government of Saskatchewan to enable municipalities to access alternative revenue options including, but not limited to, new or improved taxation alternatives;

2. Advocate the Government of Saskatchewan to either collect its own education property tax directly or reinstate a grant to municipalities that compensates for the administrative burden of collection;

3. Advocate for the reinstatement of municipal payments in lieu for electrical revenues from SaskPower, restoring a vital source of municipal revenue; and

4. Advocate for the Province of Saskatchewan to exempt municipalities from Provincial Sales Tax (PST) on construction projects, thereby reducing costs and supporting infrastructure development.

Dear Randy Goulden:

Thank you for your recent letter regarding resolutions from the 121^st Annual Convention of the Saskatchewan Urban Municipalities Association.

Municipalities in Saskatchewan, including cities, have the authority to establish their own property tax policies in accordance with municipal legislation. This autonomy enables them to collect the funds necessary to provide services for their residents. Municipal legislation allows municipalities to utilize alternative revenue sources, including, but not limited to, special taxes as well as various fees and charges.

Under The Education Property Tax Act, Saskatchewan municipalities are required to levy and remit Education Property Tax on behalf of the provincial government. Having the municipalities provide Education Property Tax notifications is preferred, so that a single tax notice is sent to each property owner; one contact point for all information best serves all ratepayers.

In regard to the reinstatement of payments in lieu of electricity revenue, the payments were a mechanism to provide municipalities with additional funding for giving up the right to establish their own power distribution systems. Using the payments in lieu as a primary funding model created inequities between rural and urban municipalities. As an alternative, under Section 36 of The Power Corporation Act, cities are able to request a municipal surcharge of up to 10 per cent, while towns and villages can request up to five per cent. It is calculated as a percentage of a customer's total electrical charges before taxes, and the proceeds are paid to the municipal councils monthly by SaskPower.

As has been previously noted, Saskatchewan's provincial sales tax is a tax of general application, applied to a broad base of goods and services. This broad application ensures that a fairly applied, reliable and sustainable source of revenue is available to finance the many public services provided by our government, including grants to the municipal sector, health care and education.

I would like to note that the Municipal Revenue Sharing (MRS) Program, which is based on a percentage of provincial sales tax revenues, allows municipalities to receive unconditional funding and is a far more stable, predictable funding model for municipalities. In 2026-27, our government will distribute more than $392 million to municipalities under MRS, a $31 million increase from 2025-26 funding. This commitment aligns with our government's promise to develop a long-term revenue sharing plan with the municipal sector that is linked to the performance of the province's economy.

While there are no plans to revisit related legislation at this time, our government remains committed to providing meaningful, targeted tax relief when appropriate, and will continue to review its programs and taxes annually as part of our budget development process.

Thank you for providing me with the opportunity to comment on these resolutions.

Sincerely,

Jim Reiter

Deputy Premier and MInister of Finance

Dear Randy Goulden;

Thank you for your April 29, 2026 letter regarding resolutions passed at the 2026 Saskatchewan Urban Municipalities Association Convention.

• The municipal surcharge was a mechanism to provide municipalities with additional funding for giving up the right to establish their own natural gas or power distribution systems. This was in place during a time when there were many municipal and privately owned companies. Using the municipal surcharge as a primary funding model created inequities between rural and urban municipalities. There is currently no plan to revisit municipal surcharges.
• Cities can now request a municipal surcharge from SaskPower of up to 1o per cent while towns and villages can request a municipal surcharge of up to 5 per cent. The municipal surcharge is calculated as a percentage of the customer's total electrical charges before taxes (basic monthly charge, demand, consumption and previously the carbon charge). The proceeds of the municipal surcharges collected by the corporation are paid to the municipal councils monthly pursuant to Section 36 of The Power Corporation Act.
• In contrast, Municipal Revenue Sharing (MRS) -which is based on a percentage of Provincial Sales Tax (PST) revenues--allows municipalities to receive funding unconditionally and is a more stable, predictable funding model for municipalities. Municipalities have received more than $2.2 billion in MRS since 2017-18. This funding model is already completely separate from property taxation, is growth-based, predictable and is linked to the performance of the province's economy.
• A broad application of PST ensures that a fairly applied, reliable and sustainable source of revenue is available to fund the many public services provided by our government including grants to the municipal sector, infrastructure investment, healthcare and education. Saskatchewan will continue to review its programs and taxes annually as part of our budget development process but has no plans to amend the current policy regarding PST on construction services at this time.

Congratulations on another successful convention. I look forward to continued discussions with SUMA on areas of mutual interest.

Sincerely,

Eric Schmalz

Minister of Government Relations

Minister Responsible for First Nations, Metis and Northern Affairs

Minister Responsible for Provincial Capital Commission