Sask. Finance Minister Kevin Doherty. Photo courtesy of Manfred Joehnck.
The Saskatchewan budget contains nearly a billion dollars in new taxes, impacting nearly everyone in the province.
The biggest hit will be an increase in the provincial sales tax from five to six per cent. In addition, many items that were exempt will now be included.
It is the toughest budget Saskatchewan has seen in years, and despite the tough new measures, the government will still spend $685 million more than it will take in over the next year. New taxes will raise an additional $900 million for the province.
Not only will the PST go up, it will also apply to children’s clothing, restaurant meals, snack foods, insurance premiums and construction services. These items were previously exempt.
Tobacco taxes are also going up by about 50 cents a pack, while the mark-up on liquor, beer and wine will increase from four to 6.8 per cent, depending on the product. That tobacco tax increase was effective the following day, with liquor prices slated to change on April 1.
The tax changes were the centre of criticism from a number of fronts on Wednesday.
NDP finance critic Cathy Sproule says the budget is full of broken promises.
“Over and over again the Sask. Party has promised not to raise taxes. Well, there’s a billion dollars worth of tax increases here,” she said.
She calls the budget a complete betrayal that takes aim at Saskatchewan’s poor and vulnerable.
“With this budget the Sask. Party proved that they have once again lied to Saskatchewan people. And they have failed the Saskatchewan people,”
The Regina Anti-Poverty Ministry says the budget is unfair and targets those who can least afford to pay more.
Ministry spokesman Peter Gilmer says corporations and those in high income brackets should be carrying a greater share of the tax burden.
He also says increasing and expanding the provincial sales tax takes a far bigger bite out of the income of someone who is poor.
“They’er paying more of their income than the higher-income person is so I think it’s an easy tax to get away with, but it hurts those with the least the most,” he said.
Another major hit in the budget is the winding down of Saskatoon Transportation Company beginning in May. The provincial bus company has been a money loser for years. It is estimated it would need nearly $85 million in subsidies to keep it running for another five years. The shutdown will impact 224 workers.
Spending for post-secondary institutions will be cut by five per cent, while funding for K-12 will be cut by nearly seven per cent. As a result, homeowners will be paying nearly 10 per cent more for education property taxes.
The budget for First Nations and Metis initiatives will remain pretty much intact, with a drop of about 1 per cent due to lower than expected casino profits. The total budget is about 210 million. Included in that is a reduction of 10 per cent in funding targeted to First Nations and Metis initiatives and institutions.
Revenue sharing for all municipalities, including northern municipalities, will also be cut by about five per cent.
On the upside, personal income taxes will drop by half of a percent this summer, with a further half-point drop in the summer of 2019.
Meantime, milk containers will be added to the SARCAN recycling program. However, it will cost you more to buy milk because of a new recycling fee of three to six cents depending on the container. Refunds will also be increasing from 20 to 25 cents for aluminum, tin and plastic containers.