Municipalities that withhold the education portion of property tax that they have collected on behalf of school boards could soon suffer financial consequences.
Saskatchewan’s NDP government passed a law in the legislative session that concluded last week outlawing tax revolts as of Jan. 1, 2008.
The move comes after many rural and small municipalities refused to hand over education taxes during several tax revolts in the past decade. In 2005 nearly 100 municipalities were involved, said government relations minister Harry Van Mulligen.
In some cases, municipalities were encouraging ratepayers to pay their taxes late, which put extra strain on school boards.
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“The purpose of the bill is to provide legislation that will encourage municipalities to comply with the law respecting collection and payment of education property tax and introduce new consequences for those that do not,” Van Mulligan said during debate earlier this month.
The government can now reduce or withhold grants to municipalities that don’t comply with the law.
The bill includes provisions for a progressive discount scheme that encourages early tax payments.
Saskatchewan Party MLA Yogi Huyghebaert said he had heard concerns about the regulations that will be part of the legislation, particularly whether municipalities will have to follow a discount scheme prescribed by the regulations or if they will have flexibility.
Van Mulligen said the regulations will be determined after consultation with rural and urban municipalities.
“I would say to municipalities, ‘we are taking your comments into consideration. You municipalities have the experience in Saskatchewan in putting in place some very successful discount schemes to encourage the prompt payment of taxes,’ ” he said.
“That’s what we want reflected in the regulations.”
Huyghebaert also expressed concern during debate that limiting tax revolts doesn’t address the real problem of tax inequity.
“With the NDP unable to provide anything more substantial than Band-Aid solutions they now feel their best option is to legislate these RMs into ending their revolt or fear financial penalties,” he said.
The legislation was among 36 bills that received royal assent May 17 as the last item of business in the session.
The Agricultural Societies Repeal Act, which was outdated, was also in that list. Agricultural societies can now incorporate as nonprofit organizations, which many have already done.
