CTF submission

REGINA: On the final day of the Saskatchewan Business Tax Review Committee's public consultation process, the Canadian Taxpayers Federation (CTF) is calling for sweeping business tax reforms aimed at stimulating the provincial economy.

"The establishment of the Committee represents a tacit acknowledgement by government that the current tax structure is hurting the provincial economy," says CTF Saskatchewan director David MacLean. "The recommendations of the Committee can and should represent a turning point for the Saskatchean economy. It's critical for the province to strike out in a new direction - away from the failing economic policies of the past and toward policies that will create prosperity and growth."

CTF Recommendations

1) Phase out the corporate capital tax
2) Eliminate the PST on business inputs
3) Reduce the corporate income tax rate to 11.5 per cent and eliminate the 10 per cent M&P rate

"If implemented, our recommendations would make Saskatchewan one of the most competitive jurisdictions in Canada - miles ahead of some of our neighbours to the east, and on par with Alberta," adds MacLean. "These recommendations would uncork the potential of Saskatchewan and make use of our province's boundless energy, tireless and well-educated work force, and vast natural resources - a wonderful way to mark Saskatchewan's centennial year."

The submission looks to British Columbia, which implemented similar changes in 2001, as an example of the benefits that can be realized from meaningful business tax reforms. In the first year after the tax cuts, government revenues declined by 1.3 per cent, and then rose steadily in subsequent years. Since 2002/03 total government revenues have increased by 18 per cent. At the same time, that province has enjoyed GDP growth of 10 per cent, at an average annual growth rate of 3.2 per cent. The average annual growth rate over the seven years leading up to 2001 was only 2.6 per cent.

"British Columbia shows us the way when it comes to business tax reform," adds MacLean. "With the right mix of fiscal responsibility and tax reductions, we can achieve real growth in Saskatchewan."