Finance & Taxation | Saskatchewan

For members with stores in Saskatchewan: Saskatchewan Budget Forecasts Surplus by 2019, Adds PST to Appliances and Cars

On April 10, following a tribute to her constituency of Humboldt, Saskatchewan, Finance Minister Donna Harpauer tabled her 2018 budget, forecasting a $365-million deficit for this fiscal year, and a modest surplus in 2019.

The budget includes no changes to personal tax rate, corporate income tax rates, or the Education Property Tax. Additionally, the budget contains no carbon tax, as the government remains firmly in opposition to this federal government-imposed requirement.

Additionally, the pre-budget rumoured increase to Provincial Sales Tax (PST) did not materialize and PST remains at 6%.

However, effective start of business today PST will now be charged on energy star appliances and most used vehicles.

PST on Appliances and Used Vehicles

• Effective Wednesday, April 11, the Saskatchewan PST exemption to appliances with the energy star sticker will be removed, meaning customers will pay an additional 6% on most appliances. The change is expected to generate $3 million in tax revenue.

• Additionally, PST will now be added to used vehicle purchases over $5,000, except for certain family member sales. The tax will be paid during registration with SGI and is anticipated to generate $95 million in new revenue.

Key Budget Numbers:

• The government projects a $365 million deficit this year, however anticipates a modest surplus of $6 million next year, increasing to $108 million by 2020.

• Total projected expenses are down $200 million or 1.4% from last year, with the largest share of the $14.61 billion budget going to health ($5.77 billion) and education ($3.26 billion).

• Revenues are estimated to be $14.24 billion, up $80 million from last year, largely due to higher non-renewable resource revenue, net income from government business enterprises, and other own-source revenue, including $2 million from the recently increased beverage handling levy.

• The government’s reliance on resource revenue is continuing to decline, accounting for only 10% of the province’s revenue projections, down from 32% in 2008-09.

• The total public debt this year will increase by $2.3 billion, resulting in the total rising to above $20 billion by March 31, 2019.

• No cannabis revenues were accounted for due to unreliable forecasting of market size and retail pricing, however the government reports that they will receive 75% of the federal cannabis excise duty generated in the province, along with PST.

Retail Impacting Announcements:

• Retail sales increased 4.0% in 2017, however are projected to slow in growth this year 2018 (2.7%) and 2019 (2.5%).

• Although retail is the largest private sector employer in Saskatchewan, representing over 10.9% of the province’s labour force, there was nothing material in the 2018 budget designed to support retailers.

Next Steps:

• RCC intends to clearly express our frustration to the government regarding the lack of concern they have shown with unreasonable implementation timelines being placed on Saskatchewan retailers – today with the adjustment to PST rules and recently related to the increase in beverage handling fees.

• RCC will continue to advocate for legislative and taxation that support our Saskatchewan members, such as changes to employment standards, improvements to environmental regulations and safeguarding a predictable minimum wage.

• In anticipation of the 2020 election, RCC will actively meet with all parties to ensure candidates are well informed about how to best support a vibrant retail sector.

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