Province Announces Affordability Plan
The Government of Saskatchewan announced a four-point affordability plan to help people address the rising cost of living.
“Higher global commodity prices are driving growth in Saskatchewan’s economy, creating jobs and improving our budget position,” Deputy Premier and Finance Minister Donna Harpauer said, who released the province’s 2022-23 First Quarter Financial Report and four-point affordability plan today. “However, higher commodity prices are also driving up the cost of almost everything you buy. Saskatchewan people own the resources. Saskatchewan people should benefit when resource prices are high. That’s why we’re going to use higher resource revenues to help address rising costs and to retire up to $1 billion of the province’s debt.”
Point one of the plan is the Saskatchewan Affordability Tax Credit payment. All Saskatchewan residents who are 18 years of age or older as of December 31, 2022, and who have filed a 2021 tax return as a resident of Saskatchewan will receive a $500 Saskatchewan Affordability Tax Credit cheque this fall.
Saskatchewan residents who have not filed a 2021 tax return are encouraged to do so as soon as possible. The cost to Government of the tax credit is estimated at $450 million, with an estimated up to 900,000 cheques to be mailed.
Point two of the plan is the removal of fitness and gym memberships and some recreational activities from the planned October PST expansion on admissions, entertainment and recreation.
PST will not be charged to residents under 18 years of age participating in recreational activities including golf, curling, hockey, tennis, basketball and similar formal sporting activities where the individual participates in a league or service where a round, game or match are completed. These activities will be taxable for individuals 18 years of age and older.
PST will not be applied to fitness classes as well as personal training and other fitness activities offered through municipal recreational facilities. PST will not be applied to arts, cultural and sports programming and league of membership fees like gymnastics fees, art classes, or acting classes, for example.
Businesses that qualify as small suppliers for GST purposes will be exempt from collecting PST.
PST will be applied to ticket admissions to sporting events, concerts, trade shows, fairs, rodeos, movie theatres, professional water parks and entertainment admissions like escape rooms, batting cages and arcades.
This change will reduce PST revenue this year by an estimated $3 million.
Point three of the plan extends the small business tax rate reduction, at 0 per cent retroactive to July 1, 2022 and delaying the restoration of the rate to 2.0 per cent to July 1, 2024. This will help small businesses as they continue to recover from the pandemic, while facing new challenges like inflationary pressures, interest rate hikes and supply chain issues.
It will save small businesses $93.1 million over the next three years, on average $3,000 for each small business. There are approximately 31,000 small businesses in Saskatchewan.
Point four is the retirement of up to $1 billion in operating debt.
Debt is now forecast to be $1.7 billion lower by fiscal year-end than projected at budget, the province’s projected surplus provides the ability to retire up to $1 billion in debt, and the province no longer needs to borrow for operations due to the improved financial position.
Debt retirement and lower borrowing results in lower financing charges due to an estimated $49 million decrease in interest costs.
“Helping Saskatchewan people through a time of higher costs, as well as taking the prudent measure of retiring debt, strikes the right balance and helps our province move forward,” Harpauer said. “That’s growth that works for everyone.”
Information about the Saskatchewan Affordability Tax Credit (SATC) and PST changes is available online at www.saskatchewan.ca/affordablity and at Tax Information Updates. The Ministry of Finance tax information line is 1-800-667-6102 for information on the SATC and PST changes. Individuals can also email satc@gov.sk.ca for information about the SATC.
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