(Lisa Schick/CJME file photo)

By CKOM

SARM president says new provincial tax change will hurt rural municipalities

Dec 22, 2022 | 7:11 AM

Rural municipalities in Saskatchewan previously had the ability to tax commercial property at nines times the rate that they’ve been allowed to tax agricultural property.

That ratio has now been lowered to seven to one in a change that has been too drastic and too quick, according to Ray Orb, the president of the Saskatchewan Association of Rural Municipalities (SARM).

“You’re used to paying a certain amount of taxes and maybe with some slight increases year to year,” Orb said. “But this is a huge shift and there are going to be implications because of that.”

Orb said 21 rural municipalities will be affected. The change in the ratio will mean the bulk of the taxes will shift from commercial properties to agricultural properties.

The SARM president said that will cause a shift of about $5.84 million, with the agriculture sector paying $3.78 million of that.

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Orb said he believes the shift should have been more moderated and incremental.

“No. 1, we didn’t want it. We want it to be stopped,” he said. “In the case of government going ahead, we wanted to have it phased in, perhaps over two years.”

Orb said policies like this have been a long-standing issue and a point of contention.

He said organizations such as the Saskatchewan Growth Coalition argued in favour of policies such as this because they felt oil and gas were being hurt.

“Actually, we made the case that there was (at that time) about $245 million in unpaid taxes to rural municipalities in our province on behalf of oil and gas,” he said. “So they were avoiding, in a lot of cases, paying their taxes.”

He said SARM has met numerous times with provincial leaders but a lot of its concerns have gone unaddressed.

“This is not the first time that the province has made a change like this,” he said. “This is probably the second or third time that I know of.”