By Greg Higgins

PST on construction could have a $500,000 effect on N.B.

Mar 23, 2017 | 5:00 PM

With PST now being charged on construction, North Battleford could have to pay an additional $500,000 which wasn’t budgeted for.

The provincial budget was released yesterday and not only was the PST increased from five to six per cent, but PST will also be charged on construction work where it wasn’t charged at all before. The city’s mayor, Ryan Bater, said of the all the new decisions in the budget, the application of the tax on construction work will have the biggest impact on North Battleford. 

“The city does a lot of construction work,” Bater said. “Right now our finance team is working with the ministry as well as SUMA (Saskatchewan Urban Municipalities Association) to determine what this is going to look like. It is possible we are looking at upwards of $500,000 just for this year in unbudgeted costs.”

Bater said the costs weren’t considered when council was deliberating the municipal budget, because at the time PST wasn’t being charged on construction. The tax will be charged to the Underground Pipe and Asphalt Replacement (UPAR) program, which will be substantial, because tenders have already been developed and construction season is weeks away.

Bater added, now council will have some very difficult conversations regarding making up the potential $500,000. The mayor wouldn’t speculate what projects would be put on hold or cancelled. 

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According to Bater, city administration is not only looking into how they will adjust the budget for the new construction costs, but they will also try to figure out how much of the $3.1 million budgeted in expected revenue sharing will still be available.

“There’s a lot of moving parts there and we are still working with SUMA to develop a clearer picture of what that will look like for the city,” Bater said. “New population numbers came out so that impacts the total pool of what is collected will change … we are not yet sure if that will be a positive or negative thing for the city. We suspect it will be negative though.”

Communities’ share one percent of total PST collected by the province. Bater believes even though the PST percentage increased, North Battleford hasn’t grown in population as much as other communities, which could lead to less money for the city.  

The new budget isn’t entirely negative in the mayor’s eyes. Even though schools are receiving a 1.2 per cent cut to their funding, Bater said there was some good news.

“We are glad to see the retention of locally-elected school boards,” Bater said. “Council had passed a resolution supporting that earlier this year.”

Bater couldn’t comment on what programs Living Sky School Division would have to cut.

“That is hard to say what it is going to look like,” Bater said. “That is up to the elected school boards to determine. I am just glad there are going to be elected school boards who will set local priorities and those priorities won’t be set by Regina.”

As for the $1 million budgeted by the province for crime reduction, Bater wasn’t sure what to think.

“You see the dollar figure and it is tough to know what it will be used for,” Bater said. “How is it going to reduce crime? Is it for specific communities or the entire province? Those are questions we don’t know.”

The mayor said things will become clearer once budget goes through the committee and is passed. The city will work with the Ministry of Justice to find out the intention for those funds.

Greg.higgins@jpbg.ca

On Twitter @realgreghiggins.