Grants in Lieu of Taxes on Saskatchewan Government Services Properties

The province is constitutionally exempt from paying taxes to municipalities. However, in the 1998-99 Budget, the province announced that it would begin payment of grants-in-lieu to municipalities in an amount equal to the general property tax levy for properties owned or managed by the Ministry of Central Services. This policy took effect on January 1, 1998.

• Payments of grants-in-lieu are based on the property's taxable assessment times the mill rates, including applicable "tax tools". The 1998 payment was based on 25% of a duly levied 1998 property "tax bill". In 1999, the payment was 50%; in 2000 it was 75% and in 2001 the payment was the full amount levied. The payment continues to be 100% of the full amount levied. The provincial government is not actually paying taxes on properties, due to its legislative exemption. Instead, grants are paid in lieu of these taxes and are based on the prior year's tax notices for the property. If the property is sold or becomes ineligible, the grant is discontinued at that time regardless of the tax notice for that property from the previous year. Since the payments are grants, the government is not in arrears on taxes at any time.

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