SARM AND SUMA SUPPORT PROVINCIAL PITCH TO CHANGE EQUALIZATION

Saskatchewan Association of Rural Municipalities (SARM) and Saskatchewan Urban Municipalities Association (SUMA) have joined forces with the provincial government to ask Ottawa to promote greater equity in the equalization program regarding Saskatchewan.

Municipal leaders met with government officials today to review the province's position on equalization and how it affects provincial finances.

"We took this valuable opportunity to outline to senior officials of municipal governments the full impact of equalization on this province," Industry and Resources Minister Eric Cline said on behalf of Finance Minister Harry Van Mulligen. "Specifically, we discussed the high tax-back rates on our resources and problems with the mining tax base. We're glad to have SUMA and SARM on-side to raise awareness of the issue and encourage the federal government to address the issue."

In the meeting, officials discussed the paper written by noted economist and Queen's University Professor Thomas Courchene. Courchene points out that Saskatchewan is penalized unfairly for its resource revenues. At times, he says, the federal government claws back more than a dollar for every dollar Saskatchewan earns in resource royalties.

"We share the government's concern about equalization," SARM President Neal Hardy said. "Times are tough in rural Saskatchewan. The need to have equalization changed to better assist the province should be seriously considered. If the proposed changes are made, the Saskatchewan government could put additional dollars in areas that concern rural ratepayers."

The Province's position is that Saskatchewan should receive the same deal as the Atlantic provinces. Only 70 per cent of their resource revenue is used to calculate equalization entitlements. This change would amount to about $100 million more every year for Saskatchewan.

"When something is unfair like this, you have to fix it," SUMA President Don Schlosser said. "I hope the province and the federal government can find a solution. If SUMA's support will help that, then I'm pleased to provide it."

Another priority issue is the flawed mining tax base used by the federal government to calculate Saskatchewan's entitlements. Van Mulligen has pointed out that this is costing the province between $40 and $50 million a year.

Cline welcomed the support of Saskatchewan's local governments with efforts to convince Ottawa to fix these serious problems with equalization. "There is strength in numbers and the support of local governments shows Ottawa that Saskatchewan is coming together to urge important improvements to this fundamental federal-provincial program," Cline said.

"This is a valuable partnership," Government Relations Minister Len Taylor added. "We're presenting a non-partisan, united front to ask for change. Together, we're seeking fair equalization payments that the people of this province are entitled to."

Currently, the federal and provincial Departments of Finance are meeting to finalize the next steps in correcting Saskatchewan's treatment under the equalization program. The goals include developing a list of items to be addressed and a timetable to address them. This meeting resulted from an earlier meeting between Premier Calvert and the Prime Minister on April 17th.

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For More Information, Contact:

Debbie Clark Finance Regina Phone: (306) 787-6605	Andrew Rathwell SUMA Regina Phone: (306) 525-3727
Ken Engel SARM Regina Phone: (306) 757-3578