By Charles Hamilton, The StarPhoenix September 9, 2013 - The flat tax being proposed by some city councillors to pay for Saskatoon's crumbling road system will be unique for a major city in Canada, but not for Saskatchewan.
Councillors are still divided about whether taxpayers should each pay the same flat fee of $170 per year phased in over three years to make up a $14-million funding gap to pay for much-needed road improvements around the city.
The flat tax would mean everyone - regardless of the value of their home - would pay the same amount.
The concept of a base or minimum tax is unique to Saskatchewan, according to a report by city administration. The neighbouring provinces that were surveyed do not have any provisions for a base tax, according to the new report going before city council.
Several smaller cities and towns in the province - including Prince Albert - use the system, but to levee a flat tax to pay for something as specific as roads is uncommon in Canada. The report indicates that such a tax could put more burden on lower-income people in Saskatoon.
"Property tax is cited as a regressive system, relative to income. A base tax could be viewed as being more regressive," states the report.
Under the traditional property tax model, the majority of homeowners would pay around $140 per year toward the road tax. Owners of properties valued at $1.9 million would have to pay an extra $750 a year, while those with homes worth less than $100,000 would pay $40 or less.
"I feel that a flat tax asks most citizens to pay more than their fair share," said Coun. Mairin Loewen. "We want to, as best we can, ask citizens to pay their proportionate share, because that's the way we pay for everything."
Loewen said she would prefer if the city had better taxation powers - like the ability to tax gasoline - in order to pay for the road work. In the absence of such powers, she said property tax is the most fair system.
Also included in the report is a so-called hybrid model where the flat tax would be tiered. In this model, those with a home worth less than $150,000 would pay a $100 flat tax, those with a home worth between $200,000-$500,0000 would pay $170 and those with a home worth more than $600,000 would pay a $250 flat tax. Council will give some indication if they want to further explore the flat tax model.
Council in brief:
Council will be asked to approve an expansion of Preston Crossing shopping area
A new River Landing project by Victoria developer Chris LeFevre goes before council
Borrowing for a new police station to finish construction is on the agenda
Council will be asked to approve Treaty Six flag raising at city hall