Gas is usually the cause of a problem, not the source of relief. But in Saskatchewan it is the other way around.
By successfully lobbying for changes in the way oil and gas revenues are treated in the calculation of federal equalization payments, the province will be able to provide substantial short-term property tax relief to its citizens.
Government relations minister Len Taylor told the 879 delegates attending the Saskatchewan Association of Rural Municipalities’ 2004 midterm convention that thanks to the hard work of politicians like premier Lorne Calvert and federal finance minister Ralph Goodale, Saskatchewan has become one of the “have” provinces.
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In October, Calvert brought an equalization payment deal back from Ottawa that puts $367 million in new dollars into the province’s coffers, enabling the premier to live up to an earlier promise of setting aside 30 percent, or $110 million of the federal funds, for education property tax relief, said Taylor.
“There were those who didn’t believe him. There were those who predicted we would be unsuccessful. You remember those who said 30 percent of nothing is still nothing,” he told delegates attending the Saskatoon convention.
Yet a few months later the province finds itself with “new money and new opportunities.”
Taylor said he has assembled a working group to provide direction on how the $110 million should be divvied up among the province’s landowners.
Earlier in the convention, SARM president Neal Hardy provided his idea on that subject.
During his president’s address Hardy turned down the lights and played a video of Calvert speaking to the same group of delegates a few months ago at the association’s annual convention in Regina.
The premier pointed out that while one-quarter of the assessed property in Saskatchewan is farmland, only five to six percent of the population lives on farms.
“Without doubt there is an inequity in the level of education tax on farmland,” Calvert told delegates at the March convention.
At the end of the video clip the lights came back on.
“I think that says it all,” Hardy said.
He then called on the province to devote one-third or $37 million of the pending tax relief money to the province’s farmland owners, splitting the remaining $73 million among the rest of the property owners.
But in an interview with reporters after his Nov. 10 presentation to SARM delegates, Taylor said that is not the direction indicated by the working group.
“It is likely that we will address the inequity more over the longer term than the shorter term,” said the minister.
Taylor said the committee is close to finalizing a disbursement mechanism for the tax relief money and he doesn’t want SARM’s request to slow down that process.
He expects the property tax money to be doled out over one or two years, starting in 2005.
SARM and the Saskatchewan Association of Urban Municipalities want the funding applied as a direct credit or rebate on tax notices, while the Saskatchewan School Board Association prefers it be used for increasing its foundation operating grant.
While there was little consensus on that aspect of the program, the groups were all in agreement that a longer-term solution to the education tax issue is still required.
Taylor said he recognizes the $110 million provides only interim relief and pledged to find a more durable answer to the long-standing taxpayer irritant.
