SUMA president and NDP leader want PST cut from municipal building projects

Saskatchewan Urban Municipalities Association president Gordon Barnhart says he wants to see changes to how the provincial government taxes building projects.

In 2017, the provincial government started charging the six per cent Provincial Sales Tax (PST) on construction.

The decision, meant to help balance the budget in the face of low resource revenues, was controversial. Many in the building industry decried the policy, saying it was making their companies less competitive.

Barnhart would like to see towns and cities be exempt from the tax on any building projects they initiate.

He said the extra six per cent cost on construction must be raised by the municipality, even if the project is getting money from the federal or provincial government.

"It would be a huge relief for municipalities," said Barnhart at the annual SUMA convention in Regina.

"I think it would make sure that a lot of communities will proceed with their building projects now that if they didn't have to worry about the PST."

Barnhart said he has heard of communities that had to do extra fundraising to raise extra money to pay taxes due on projects like civic centres.
 
"Now that we're into a balanced budget situation, hopefully they'll remove that PST," he said.  

The construction tax issue was only one of many resolutions that were voted on at this year's SUMA convention. They also included merging SUMA and the Saskatchewan Association of Rural Municipalities and creating a Municipal Climate Change Action Centre.

NDP Leader wants PST exemption reinstated

"It doesn't make any sense for one level of government to be taxing another," Saskatchewan NDP Leader Ryan Meili said on Tuesday.

"So, our commitment is that an NDP government will exempt municipalities from the PST you are now paying on construction labour."

Meili addressed the SUMA delegates on Tuesday morning, promising to remove the PST on construction for municipalities if his party were to form government. The comment garnered applause from the crowd.

"This is impeding municipalities from making the choices to invest in key infrastructure," Meili said.

"Prince Albert has really been clear ... that the cost for them is much more than any increase they've seen from revenue sharing. [In] Moose Jaw they saw their revenue sharing go up by a couple hundred thousand last year but their cost for PST was $800,000."

The NDP said it will release a fully costed platform in the future but sees the commitment to remove the PST as a way to "stimulate local infrastructure spending." 

SUMA changes name

On Tuesday SUMA also announced it is changing its name to Municipalities of Saskatchewan.

"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," said Barnhart.

He said the organization will spend the next few months rebranding.