Thank you, and good morning. My name is Ray Orb, and I am the president of Saskatchewan Association of Rural Municipalities, or SARM.
SARM is the independent association that represents all of the 296 rural municipalities in Saskatchewan. I appreciate the opportunity to be here today to talk about rural Saskatchewan's priorities for the upcoming 2018-19 budget.
The goal of increasing productivity for all Canadians, businesses, and communities is important for ensuring the overall well-being of Canada, but SARM does have concerns with the proposed tax planning using private corporations, as the changes will have major complications for the agricultural sector, a sector that the federal government did single out as a key source of future economic growth in the last budget.
Saskatchewan has the highest proportion of incorporated farms in all of the Prairies. One-quarter of all farms were incorporated in 2016. For decades, farmers have been encouraged by provincial agricultural departments and tax officials to incorporate, because the tax system then makes it easier to transfer the farm within the family. The proposed changes would threaten the transfers of farms and would make it easier for foreign buyers and non-family members to purchase land.
Rural Saskatchewan is proud of the family farm. This past June, the Information Services Corporation honoured 182 Saskatchewan families with the ISC Century Family Farm Award, an award that recognizes families that have continuously maintained the same farm or ranch operation for 100 years or more. Saskatchewan's history has been shaped by the legacy of farms and land passed along through several generations.
Rural Saskatchewan's productivity may be improved and supported through the following priorities.
Broadband access has become so prevalent in our daily lives that if we don't have access to reliable service or we don't have any service at all, we suffer through the inability to be integrated in the economy and society. Reliable and good service has become extremely important and critical for all businesses in communities across Canada. The need for this service is no less in rural areas than in urban areas.
SARM thanks the federal government for its investments in rural broadband through the connect to innovate program. This program will help to improve broadband services in rural areas across the country. The program is focused primarily on bringing new backbone infrastructure to communities that lack a connection of one gigabit per second. Bringing service to communities that lack a connection has always been a part of SARM's advocacy efforts. Providing funding to put these connections in place is very much appreciated, and SARM recommends that an important measurement moving forward will be the reliability of a connection.
Constructing new connections to underserved rural areas should remain a focus, but upgrading the reliability of existing rural connections is also important. Minimum available download and upload speeds provide an indication of an aggregate service level, but reliability should also be taken into account. A good question to ask is if that level of service is consistently available throughout the day during peak times.
SARM also recommends that the federal government work with the provincial government when determining the threshold when defining a rural community. Often a definition of “rural” in federal programs and funding does not align with provincial realities. The reality in Saskatchewan is that there is great variation in the populations of rural municipalities, from the smallest at 73 to the largest of almost 9,000. Lowering the 100,000 population threshold for the small communities fund and other federal infrastructure programs would significantly improve the benefits that rural communities receive.
SARM's board of directors has taken Saskatchewan's demographics into consideration and, after some deliberations, SARM truly believes that the definition of “rural” for Saskatchewan should be populations of less than 4,999. In Saskatchewan there are only two cities with populations of over 100,000. As a result of this criterion, rural communities must compete with all the cities across the province for infrastructure funding. By adopting this new threshold, the federal government could immediately ensure improvement of the environment, support stronger and safer communities, and support the economic prosperity of the middle class.
Training and education is also a crucial part of increasing productivity. Since municipalities are important employers in rural areas and since these employers have training and education needs, SARM recommends that the Canada-Saskatchewan job grant be expanded to include rural municipalities.
Improving the skills and knowledge of municipal employees leads to more productivity, healthier communities, and prosperity for all. Communities and the middle class rely on municipal services, such as local fire departments. The services offered by fire departments save lives and property and enhance the overall public safety of communities. The provision of these services relies heavily on resources and a sustainable model. Local fire departments in Saskatchewan have experienced sustainability issues when providing fire services to provincial and crown infrastructure and/or first nations land.
Recouping the cost of services rendered does not always occur due to stringent crown policies or the absence of servicing agreements between municipalities and first nations, so we believe that the creation of an emergency response fund would greatly enhance the sustainability of municipal fire departments and increase public safety. The emergency response fund would have some cost criteria developed that would determine what costs are eligible and under what circumstances compensation would be received. The idea is to deal with fire incidents on crown infrastructure and first nations land. This initiative would serve to increase productivity of municipal fire departments by ensuring that they continue operating, knowing that they will receive compensation for services rendered and spend less time fundraising. SARM recommends that the federal government work with the municipal sector, the Government of Saskatchewan, and first nations to assist with initiating this conversation and the development of a response fund.
In closing, I would like again to urge the federal government to reconsider the tax proposal changes that would impact farmers. Farmers take on significant risk when they invest their time, resources, and assets into a business that makes them price takers. The prices for the goods are dictated by the market. The changing climate is a constant variable that can greatly enhance or destroy crops, and changing market conditions such as new tax systems create an uncertainty for the agriculture sector. The ability for farmers to access the capital gains exemption will be significantly harmed by these proposals. It will not increase fairness or productivity for middle-class farmers. Therefore, we are urging the federal government to exclude the agriculture sector from these proposals.
By working together we can improve productivity and fairness for all.
Thank you for the opportunity to speak today. I would be pleased to answer questions.