Tank: Chamber blasts Saskatoon budget despite business-friendly taxes
by Phil Tank, Saskatoon StarPhoenixThe business lobby group calls city hall's two-year budget 'disappointing' even though the city boasts a favourable commercial tax ratio.
Certainly anyone who pays property taxes in Saskatoon has earned the right to complain about city hall’s budget.
But the harshest budget criticism in years coming from the Greater Saskatoon Chamber of Commerce seems more than a little puzzling.
Late last month, city council passed a two-year budget with property tax increases of 3.7 per cent for next year and 3.87 per cent in 2021.
A day after the budget was passed, the chamber issued a news release in which chief executive officer Darla Lindbjerg called the final result “extremely disappointing.”
Lindbjerg zeroed in on the increase from the proposed property tax hikes of 3.15 per cent and 3.52 per cent. That’s legitimate. All taxpayers may well have expected lower increases than they got.
Curiously, the chamber’s budget blast came about a month after Toronto-based Altus Group Ltd. released a study that showed Saskatoon boasts the most business-friendly commercial property tax ratio of 11 Canadian cities studied.
At 1.71, Saskatoon’s commercial-to-residential tax ratio declined slightly from last year and is well below the average among the 11 cities, which is 2.8. Montreal leads with a ratio of 3.9, followed by Toronto (3.7) and Vancouver (3.6).
When you consider just the municipal portion of the Saskatoon property tax bill, which accounts for about 56 per cent of the total, the commercial ratio is even lower at 1.59.
Meanwhile, the residential tax bill is slightly above average among the 11 cities at $8.91 per $1,000 of assessment.
Why the chamber chose this year to depart from its usual statement of cautious support for city hall budgets remains unclear. The chamber did not seem as critical when city hall imposed a 7.43 per cent tax hike in 2014.
Perhaps the chamber delivered a pricklier critique because Saskatoon’s economic growth is expected to pretty much stagnate this year, according to a November Conference Board of Canada report.
Conversely, the North Saskatoon Business Association (NSBA) provided council with its detailed opinion on the budget prior to deliberations. You might not agree with the NSBA’s priorities, but you have to commend the organization for a proactive approach.
As for the budget, Mayor Charlie Clark has repeated that the property tax increase for next year is the lowest in a decade at 3.7. He’s accurate, but it’s not that much lower than the 3.79 per cent increase last year.
And, as the chamber correctly pointed out, it’s higher than it could have been.
On the final day of three days of budget talks, council spent the afternoon voting on a list of ongoing spending initiatives that added to the increases.
Council voted to increase spending in both years to contribute to reserve funds to maintain and upgrade parks, bridges and sidewalks.
Few reasonable taxpayers would argue with the need to keep parks, bridges and sidewalks in a state of good repair.
But for a city with reserve funds nearing $200 million, it’s worth wondering for what purpose all that money has been stashed away if not for infrastructure as basic as sidewalks, bridges and parks.
City hall is also carrying $354 million in debt as of a year ago. Yet taxes rise faster than inflation.
Council also decided to start spending $250,000 a year in 2020 on its controversial low-emissions community plan to drastically cut greenhouse gas emissions over the next 30 years.
Again, many would support such a low amount to start combating climate change, but it’s unclear what this level of spending will accomplish. Those demanding crisis-level climate action will consider this a pittance in an operating budget that tops $500 million.
City hall’s low-emissions plan calls for $6.1 billion in spending over the next three decades. Spending $250,000 a year adds up to $7.5 million over 30 years — not even close to the plan’s proposed price tag.
Even if council had approved Coun. Sarina Gersher’s suggested $610,000 a year on emissions, that would have only garnered $18.3 million over three decades.
In total, council added $1.4 million in ongoing spending in 2020 and $1.2 million in 2021 on the last day of budget talks.
Council members seeking election next year may be challenged to defend these decisions, but businesses may not belong at the front of the line when it comes to legitimate tax gripes.