By Jeff Labine

City mayor caught off guard by provincial budget

Mar 23, 2017 | 10:23 AM

The province’s proposed budget is going to cost Prince Albert an estimated $2.4 million.

Mayor Greg Dionne and his team at city hall have been crunching the numbers since the budget was tabled in Regina on Wednesday. The multi-million dollar hit comes from the government’s plan to eliminate the SaskPower and SaskEnergy grants, which were provided to municipalities instead of paying property taxes.

This was one of many announcements Dionne said caught him off guard.

“This $2.4 million is going to be a challenge for us but we have a very good team,” he said. “At some point I will be calling a meeting of the budget committee again and we will sit down and see how we will tackle this for this year.”

Dionne said the situation could have been worse if the province decided to sell off Crown assets. One estimate had the total loss to the city at $4.4 million. Dionne said he’s glad it wasn’t that much.

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The city will soon calculate it’s surplus from 2016, which will go towards mitigating the loss. If the surplus isn’t enough to cover the $2.4 million, Dionne said the city will have to revisit the budget.

He repeated his pledge to increase the city’s portion of property taxes by only 1.5 per cent. This doesn’t mean property taxes will cap at 1.5 per cent; just what the city will charge. A portion of property taxes goes to school divisions and that rate is set by the province. The education property tax will collect $67 million more this year or 9.8 per cent.

Adding to the confusion, this is also the year when the Saskatchewan Assessment Management Agency reassesses property values.

Dionne said the city is running scenarios to see how all of this new information will impact city property taxes

“This is the worst year for [the province] to do this,” he said. “When the bills do go out in June, we will have a letter from my office included with your tax bill explaining exactly how the increases work and who’s responsible for them.”

Another big surprise came when the province announced it would shut down the Saskatchewan Transportation Company. Dionne said many people rely on the provincially-run bus company to get to medical appointments.

Speaking to media before the budget on Wednesday, finance minister Kevin Doherty said there were only two routes that were profitable: Saskatoon to Regina and Prince Albert to Saskatoon. The problem, he said, was the route from Prince Albert wasn’t reliable as ridership has gone down.

Dionne said there could be hope for Prince Albert riders.

“Greyhound may pick up some of their routes,” he said. “But we don’t know that yet. So I am chasing down Greyhound to see what I can find out.”

The budget also means fewer jobs in the city, which will impact Prince Albert’s unemployment rate. Statistics Canada put P.A. and the North’s unemployment rate at 9.7 per cent in February. The provincial rate is 6.6 per cent. Dionne told paNOW  earlier he hoped more construction jobs would help offset this, but since the provincial budget, repair, renovation or property improvement projects are going to cost more because starting April 1, the PST will be added onto contracts.

Dionne said this will add thousands more when the city puts contracts out to tender.  

“If you are building a million dollar project and you have to pay PST on half of that now, that’s going to be a big chunk,” he added. “The difference is, for us as a city, it is going to cost us one per cent because we can’t claim back PST.”

Jeff.labine@jpbg.ca

On Twitter: @labinereporter