Saskatchewan politicians should commit to tax relief in the upcoming election while also ensuring the budget returns to balance
Compared to the rest of the country, Saskatchewan residents are the most likely to report that they are struggling financially.
While rent and groceries both eat away at a family’s budget, even together those costs pale in comparison to the largest cost a family faces every year – taxes.
In Saskatchewan, the average family pays 47 percent of their yearly income in taxes. Families pay so much in taxes that, for the first six months of the year, you aren’t working for yourself: all your earnings essentially go toward filling up the government’s piggy bank.
The upcoming election is a perfect time for politicians to commit to putting more money back in Saskatchewanian’s pockets.
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So far, the NDP is the only party that has promised any new tax relief if elected. NDP leader Carla Beck has promised to slash the province’s 15 cent-per-litre gas tax.
Premier Scott Moe and the Saskatchewan Party haven’t made any new election commitments on tax relief yet, but they do point out their government’s past tax cuts.
Let’s look at the tax-cutting record of both parties.
The Saskatchewan Party has been in power for almost two decades. In 2007, families making $75,000 a year could expect to pay about $6,400 in provincial taxes. Today, that same family pays $3,860 to Regina every year.
That $2,540 of savings is because of years of tax cuts that have added up over time. In 2008 and 2011, the government increased the basic personal amount. That means you can earn more money without being hit by provincial income taxes. In 2017, the government also reduced each tax bracket by half a percentage point.
But while Moe and his predecessor have had ample time to lower taxes, they have also done their best to ensure taxpayers pay more Provincial Sales Tax (PST).
In 2017, the government raised the PST from five to six percent and removed exemptions for used cars, restaurant meals and children’s clothes. In 2022, Moe started charging the PST on all different types of event tickets.
But what about the NDP?
In 2006, the NDP cut the PST from seven to five percent, which meant Saskatchewan had the lowest PST outside of Alberta. In the same year, the NDP also cut business taxes from 17 percent to 12 percent.
But they haven’t hesitated to raise taxes either. In the 1993 budget, former NDP Premier Roy Romanow hiked the gas tax, PST, and business taxes.
If Moe wants to prove to taxpayers that he cares about affordability, a PST cut is the way to do it. Unlike the NDP’s promise to cut the gas tax, a PST cut would make almost everything a family buys cheaper. And it would show that the government has learned from its mistake of raising the tax in the past.
Finance Minister Donna Harpauer has stated that it wasn’t “possible” to lower taxes and balance the budget because of all the government’s spending increases.
This means that any politician promising a much-needed tax cut in Saskatchewan will need to present a concrete plan for reducing government spending to make it feasible.
According to the Fraser Institute, the Saskatchewan government has spent an average of about $900 million per year on corporate welfare since 2007. Slashing these handouts would be enough to cut the gas tax or reduce the PST by one percentage point and eliminate the deficit.
The NDP has rightly called out Moe for increasing the debt. But promising a tax cut without a plan to balance the budget just means taxpayers will end up paying off the government’s debt later, when the bill will be even bigger.
Both parties need a plan to make life affordable for Saskatchewan taxpayers, but they also need a plan to get the budget back to balance at the same time.
Gage Haubrich is the Prairie Director for the Canadian Taxpayers Federation.
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