Released on September 24, 2004
Premier Lorne Calvert says Saskatchewan residents can look forward to property tax relief, thanks to positive equalization adjustments to our province."The government is honouring its commitment," Calvert said.
"Two of our longstanding concerns over inequities in the equalization funding formula have been addressed by recent announcements from the federal government: first, the one time payment of about $340 million that addresses unfair clawbacks of provincial energy revenues in the past and provides equalization funding for our province to address fiscal disparity; second, a commitment from Ottawa to re-examine the equalization funding formula at the upcoming First Minister's Meeting in October to make it more fair."
The federal government has indicated there will be increased funding for the equalization program over the next 10 years, totalling $33 billion for the provinces and territories. A process to develop a new funding formula, one which addresses provincial concerns, will be discussed at the First Minister's Meeting October 26th.
"In May, we pledged that we would dedicate 30 per cent of new and ongoing compensation on equalization from Ottawa to property tax relief to shift the balance off education property tax," Calvert said. "We now have a verbal commitment from Ottawa on a resolution to address our past concerns and subsequent to discussions and decisions on October 26th we will be able to work with SUMA, SARM and the Saskatchewan School Board Association (SSBA) on how to pass on relief to property owners."
While Federal Finance Minister Ralph Goodale announced a $500 million one-time payment, Saskatchewan has confirmed with federal officials that it will net approximately $340 million after adjustments.
"Even though the 2004-05 commitment is a one-time sum, we will provide 30 per cent of this toward education property tax relief," Calvert said. "However, it is very important that we secure changes to the equalization formula in future years that recognizes the excessive tax-back rates on provincial natural resources if we are to provide ongoing funding."
Calvert added that Saskatchewan has long been lobbying the federal government to fix the inequities in the equalization funding formula pointed out in the Courchene paper. Saskatchewan's natural resources must be treated fairly.
"We are encouraged by what has transpired so far in our discussions with the federal government, and look forward to further positive outcomes for Saskatchewan."
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