Regina’s push for expanded municipal tax options adopted by SUMA members

Urban municipalities want tax reform to boost revenue, including relief from PST on civic construction projects. Donovan Maess reports.

As municipalities continue to feel the burden of tight budgets across the province, leaders at this week’s Saskatchewan Urban Municipalities Association (SUMA) convention are hoping to open new ways to generate cash.

SUMA is advocating for amendments to municipal revenue options, allowing cities province-wide to reduce their reliance on property taxes and boost funding for local services.

“We are very fortunate in our province to have the municipal revenue sharing with the work together of our provincial government and our municipalities, and we’re very proud of that,” SUMA president Randy Goulden told reporters Monday. “We need expansion because that increase is not keeping up with what we’re seeing with inflation, the cost of products we have to have to put into our infrastructure.”

“It’s not growing appropriately,” she added.

• Download the CTV News app to get breaking news alerts sent to your device

The City of Regina has been leading the charge for the tax enhancements.

Council presented a resolution to SUMA members Monday which asked for its advocacy.

“Property tax is a very longstanding, but largely ineffective tool when it comes to keeping up with inflation,” Mayor Chad Bachynski said. “[We’re] really just trying to open up the dialogue.”

The City’s resolution received over 89 per cent support from SUMA members.

Titled ‘Enhanced Municipal Revenue Tools and Fiscal Fairness,’ it asked SUMA to advocate for municipalities to have the ability to explore alternative revenue tools for municipalities, including new or improved taxation options.

It also asks SUMA to advocate for the province to collect its own education property tax or reinstate a grant to cover municipalities’ administrative burden, to reinstate municipal surcharges on electrical and natural gas revenues from Crown corporations, and to exempt municipalities from PST on construction projects to reduce costs and support infrastructure development.

“What I don’t want to see is a circular loop of money,” noted Bachynski. “That’s what we’re trying to figure out is: what are the actual dollars and cents; what are we trying to make up for; what are the tools and the way that we’re going about it.”

Revenue sharing

Under provincial law, the primary source of municipal revenue is property taxes. Cities may also charge service fees and access grants from other levels of government.

Municipal revenue sharing is also a useful tool Saskatchewan municipal administrations access.

• Finance minister says province downloading responsibility to cities ‘further from the truth’

In this year’s provincial budget, the government announced it was increasing funding for the program and will distribute more than $392 million to municipalities in Municipal Revenue Sharing. This is the equivalent of 0.75 of one full point of Provincial Sales Tax.

That is an increase of $31 million from 2025-26, when it distributed more than $361 million across the province.

Saskatchewan’s urban centres now make up the majority of the province’s population.

Despite 53 per cent of residents living in large cities, just 47.9 per cent of municipal revenue sharing dollars are allocated to them

Sixteen per cent goes to towns, villages and resort villages, 28.5 per cent to rural municipalities and 7.4 per cent to northern communities.

SUMA believes there is room for change in the model, saying larger centres are often servicing more than just their immediate communities.

“Municipal revenue sharing is very important to our communities,” Goulden said. “It’s predictable, it’s sustainable. But what we’re seeing is no longer appropriate to meet all our needs. Costs are going up.”

Smaller centres are also feeling the pinch.

Rosthern Mayor Dennis Helmuth says accessibility to services is no longer required by just his town and collaboration from all levels of government is crucial.

“In a certain sense, the geography becomes a moot point,” he said. “Whether city interests or rural interests, this is a frankly not a helpful conversation, because I see intersection collaboration everyday.”

“The challenges present go way beyond what was once our cozy little town defined by our town perimeter,” Helmuth added.

Looking for a break

Bachynski calls the tying of municipal revenue sharing to PST a ‘loop of money,’ after receiving just over $61 million from the province under the program in 2026-27.

However, Mayor Bachynski would like to see municipalities exempt from paying the provincial tax on their construction projects.

“We’re expecting to spend about $9 million in PST on construction costs,” he pointed out. “Out of $60 million, that’s one sixth already going back in PST.”

• ‘Unfair tool’: Regina city council, SUMA to advocate for modernization of municipal tax collection

Goulden reminisced back to when SaskPower took over power distribution in the province from local municipalities.

She noted the Crown provided cities a grant based on electrical revenues – one she would like reinstated.

“We were to get that for eternity,” Goulden added. “But we found out eternity ended in 2017. And we no longer get that.”

Bachynski says nothing is off the table when looking at the avenues available and what could work in Saskatchewan.

“It’s really just open the dialog and say, ‘What are other municipalities doing both here in Canada, North America, but other nations even that could give us some more effective tools,” he added. “That way we can collect revenue for the services our residents expect, but not necessarily relying on property tax. An assessment every four years does not keep up with inflation.”

Door open

The province reviews the Municipalities Act and the tax tools it allows municipalities every four years.

Minister of Government Relations Eric Schmalz says he is open to having the conversation about expanding options.

“We can’t take one side over another entirely, but we try to ensure there’s space for our municipal partners to be able to exercise and use the tax tools to move within the act,” he told reporters Monday. “We try to tailor [them] to allow municipalities to provide sources of income that are sustainable for them as well.”

“There’s a lot of things at play. And I would say the cost of doing business has become significantly more expensive,” Schmalz added.

Bachynski says he expects Regina to continue to be a large contributor to the conversation as it moves ahead.

“Now that this resolution is passed, I want to play a very significant role with SUMA through that advocacy effort to get any data they can use,” he added.