Will the small business tax rate increase break their backs?
The recent uptick in the small business tax rate in Saskatchewan is causing worry, especially for the province’s small businesses. As of July 1, the provincial government has elected to increase this tax rate, a move that Gage Haubrich, the Prairie Director of the Canadian Taxpayers Federation (CTF), believes could have serious negative effects on the primary pillar of the province’s economy – its small businesses.
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In 2020, small business owners experienced some relief when the Saskatchewan government reduced the small business tax rate from two percent to zero. Unfortunately, this reprieve was brief as the rate has now been raised back to one percent, with plans to increase it further to two percent in the coming year.
Gage Haubrich
Haubrich has expressed his disappointment with the government’s choice, stating, “The provincial government decided to get greedy instead of continuing to give small business owners a break. These extra taxes are a drop in the bucket for the government, but the extra cost could break a small business.”
Over the past three years, small businesses were able to save an average of roughly $6,100 due to the tax cut. Last year alone, the government collected a record-breaking $1.9 billion in business taxes. Fully taxing small businesses again would merely increase this enormous total by a modest nine percent.
Small businesses are a major source of employment in Saskatchewan, providing jobs for nearly 150,000 people. With the tax increase, more than 31,000 small businesses in the province will face higher taxes.
Adding to the disappointment, according to Haubrich, is the Saskatchewan government’s recent budget, which failed to offer any tax relief – a step that many other provinces have taken to help businesses reduce their costs. He said, “Other provinces are cutting taxes and that helps businesses cut down costs. Saskatchewan is going in the wrong direction by raising this tax, it needs to get rid of it for good.”
In view of these facts, Haubrich believes it’s crucial for the Saskatchewan government to rethink its approach and reassess its dedication to supporting small businesses. The health of these businesses and, indeed, of the provincial economy, heavily depends on it.
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