SUMA calls on province to stop taxing municipal construction

The Saskatchewan Urban Municipalities Association (SUMA) is calling on the provincial government to stop taxing its members when it comes to municipal construction projects, like civic centres, ice rinks and lagoons.

“It’s government taxing governments. The money just keeps going around and around. But in the meantime we’re still out that six per cent,” SUMA president Gordon Barnhart said at the lobby group’s annual convention in Regina on Tuesday.

Since the 2017-18 budget, the province has charged PST on municipal construction projects, a move the province said at the time would help account for shortfalls in resource revenues.

SUMA delegates voted on passing the call for exemption to the province as the group’s newest resolution.

Barnhart said SUMA wants to see the issue addressed in the government’s 2020-21 provincial budget to be released in March. The association will also be putting it forward as an ask to all parties running in this fall’s provincial election.

The PST charge is problematic, Barnhart said, because it doesn’t stimulate the economy and it hinders the completion of necessary municipal projects.

“These are construction projects that are affecting the general public,” he said. “It might be a rink, it might be a civic centre, it might be a lagoon. And we’re talking multi-million-dollar (projects). So it’s huge.”

Barnhart used an example from Wynyard, which had been working to get grant funding in place for a new civic centre in early 2017.

“They had all the fundraising in place, they had the grants, then that (PST) went on, and it nearly cancelled the whole program, because they had to find another six per cent,” he said.

He also cited an example from Saltcoats, where he’s a town councillor: An expansion to the lagoon there cost about $1.25 million, putting the PST tab at approximately $75,000. The town paid that back to the province after it received a grant from the province to cover one-third of the total costs.

The association believes that removing PST charges will stimulate more demand for construction from local governing bodies and their constituents, Barnhart said.

Saskatchewan Construction Association (SCA) president Mark Cooper said it supports SUMA’s resolution.

The SCA wants to see the province deliver on it and expand the PST exemption to private-sector construction companies, based on a “sector-by-sector approach,” Cooper said.

He explained the PST charge lowers demand for services from construction companies, because those services are taxed. The business owners looking to build something new are faced with higher challenges “in terms of the cost for that company or individual to proceed with the investment (the build project).

“Now they have to recalculate their return on investment, their payback time and all of those factors. (It) makes them less likely to invest (in a build project) than they would have been otherwise,” he said.

Association changes its name

Later in the day Tuesday, the association announced it was changing its name to the Municipalities of Saskatchewan (MOS).

Rebranding efforts are expected to happen over the next year.

In a statement, the organization said the new name would better reflect its membership.

“The name Municipalities of Saskatchewan encompasses all of our communities — our cities, towns, villages, resort villages, and northern municipalities — and demonstrates the true breadth and strength of Saskatchewan’s hometowns,” Barnhart said in the release.