Rural Municipality Compensation

When the Framework Agreement was negotiated, it was recognized that thevast majority of land to be purchased by Entitlement Bands (to be thereafter set apart as an Entitlement Reserve) was likely to be situated in Rural Municipalities. However, since Indian reserve land is not subject to taxation by local governments or the local school divisions, it was agreed that two separate tax loss compensation funds should be established to help offset the anticipated loss of tax revenues. Because the funds have been established, the Entitlement Bands shall not be required to pay tax loss compensation to either Rural Municipalities (or Rural School Divisions operating within such municipalities) when purchasing land or seeking to have such land set apart as an Entitlement Reserve under the Framework Agreement.

Rural Municipal Compensation Fund

Within ninety (90) days of the date upon which "Taxable Land" within a Rural Municipality has been set apart as an Entitlement Reserve under the Framework Agreement, Canada and Saskatchewan shall pay to the Rural Municipal Compensation Fund a sum that is equivalent to ninety percent (90%) of twenty-five (25) times the "Municipal Taxes" which had been levied on the Taxable Land in the previous calendar year. Canada pays 70% of this amount, and Saskatchewan pays 30%. The maximum amount payable (in total) to the fund is $25 million. This fund is administered by the Saskatchewan Association of Rural Municipalities, which will assist the governments to calculate the tax loss when necessary.

Purpose of Fund

The purpose of the fund is to ensure that Rural Municipalities will be in a position to continue to maintain roads within their municipality despite the loss of tax revenues related to property which has become an Entitlement Reserve.

School Division Compensation Fund

Within ninety (90) days of the date upon which Taxable Land within a Rural Municipality has been set apart as an Entitlement Reserve under the Framework Agreement, Canada and Saskatchewan shall pay to the School Division Compensation Fund a sum that is equivalent to seventy percent (70%) of twenty-five (25) times the "School Taxes" which had been levied on the Taxable Land in the previous calendar year. Again, the maximum obligation of the two governments (in total) to the School Division Compensation Fund is $25 Million,. with Canada bearing 70% and Saskatchewan bearing 30%.

This fund is administered by Saskatchewan. The existence of the fund has no effect on tuition agreements between the School Divisions, Canada and the Entitlement Bands.

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