For municipalities across Saskatchewan, the release of the 2015 provincial budget on March 18 had one nugget of good news: funding from the municipal revenue sharing program was not reduced.
Mayor Roy Ludwig responded positively to the unveiling of the budget, as the City, like all other communities concerned by the possibility of reduced funding from the municipal revenue sharing program, received the expected amount, which had already been budgeted in Estevan for the coming year.
They received $2.36 million, a small increase from the $2.3 million funneled the City’s way in 2014. The revenue sharing program is a distribution of one per cent of the five per cent provincial sales tax from the province to municipalities. The Sask. Party had been hinting since the New Year that, because of a drop in the price of oil, municipalities should be prepared for a decrease in funding, including funds from the PST.
With that threat looming for a couple of months, municipalities could only be overjoyed that funding cut didn’t materialize when the budget was released last week.
The $2.36 million Estevan is receiving is an increase from last year, though it brings the City back to its 2013 claim when it received the same amount. The City saw a drop in 2014 revenue sharing funds because of a change in accounting, according to the Sask. Party at the time.
The increase comes to a little less than three per cent.
“SUMA was quite concerned, as were all the towns and villages, but especially the cities, and we were very happy to see that it was left untouched,” said Ludwig.
Ludwig said the small increase was expected by the City as long as the province didn’t follow through on their threat of reduction.
“I believe we were budgeting for that three per cent increase,” said Ludwig. “With that now coming through, that’s great news for us.”
The mayor said previously if Estevan had received less than what it expected, the City may have had to completely relook at its 2015 operating budget.
With the fears of a revenue sharing reduction resulting from the drop in the price of oil, and Estevan’s strict economic ties to the drilling industry, Estevan’s economy is a microcosm of the province’s. The budget presented by the government may show more confidence in the oil industry’s potential revenues than it deserves. One of the budget’s assumptions was based on an annual average price of a barrel of oil at $57.
While oil prices saw a small resurgence to the 50-dollar range in February, the price hasn’t been above $55 since December, tumbling at times to below $45.
“With this low oil continuing, the longer it continues, the more concerned everyone gets,” said Ludwig, acknowledging the industry is one of the main drivers in the city.
He noted much of the oil sector in Estevan is based on service industry businesses.
“As the oil stays low and everything drops accordingly, it definitely impacts the service side. That concern will continue the longer the oil stays low,” said Ludwig.
While the City is happy to receive their $2.36 million share of PST, it is more disappointed in the help it didn’t receive to cover costs associated with reconstructing Highway 47 North.
“We have been requesting some help on Highway 47 North, and the Urban Highway Connector Program … I believe they did cut that back a little bit, so we probably will not be realizing the monies that we had been requesting,” said Ludwig. “The last piece we did up to the tracks (on 13th Avenue) we were hoping to get a little bit, although that was finished last year.”
He said the City had been in discussions with the province regarding funding, and they were also seeking assistance for the work on Sixth Street, an expected $1.2 million road rehabilitation project planned for this year.
