Since 2017, the province has included construction projects in the PST, which SUMA’s City Mayors say has affected their bottom lines, so they are urging the government to exempt municipal construction. Chair of the Saskatchewan Urban Municipalities Association City Mayors’ Caucus, and Mayor of Lloydminster, Gerald Aalbers, explains that local governments are responsible for about 60 per cent of public infrastructure, which is built and maintained largely through government grants like the Municipal Revenue Sharing Program.

Aalbers says they value and appreciate the municipal sharing, but with the PST on construction projects, medium-sized cities end up returning between 24 and 39 per cent of what they receive. He gives the example of the City of Yorkton paying about $1-million in PST for infrastructure projects in 2021 and the City of Prince Albert paying about $2.8-million. Aalbers notes that because of inflation, cities undertaking major infrastructure projects will have to return an even larger amount of the funding through the PST.

The Caucus urges the province to exempt municipal construction in the next budget, with the fiscal year beginning April 1st. The impact of PST on infrastructure projects was discussed during the virtual SUMA City Mayors’ Caucus meeting on Thursday.