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Affordability needs to be focus of provincial election

Author: Gage Haubrich 2024/08/06

Saskatchewanians need tax relief.

People in Saskatchewan are the most likely to report that they are struggling financially, compared to the rest of the country.

Now, rent and groceries both eat away at a family’s budget, but even together, those costs pale in comparison to the largest cost a family faces every year – taxes.

In Saskatchewan, the average family pays 47 per cent of their income every year in taxes. Families pay so much tax that for the first six month of the year, you aren’t working yourself, but only 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.

So far, the NDP are the only ones who have promised any new tax relief if elected. Beck has promised to slash the province's 15 cent-per-litre gas tax.

Moe and the Saskatchewan Party haven’t made any new election commitments on tax relief yet, but they do point out the past tax cuts of their government.

Let’s look at the tax-cutting record of both parties.

The Saskatchewan Party has been in power for almost two decades. In 2007, family 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 that you can earn more money without getting hit by provincial income taxes. In 2017, the government reduced also reduced each tax bracket by half a percentage point.

But while Moe and his predecessor has had a lot of time to lower taxes, they have also done their best to make sure that taxpayers are paying more Provincial Sales Tax.

In 2017, the government raised the PST from five to six per cent 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 per cent. At that time, it meant that Saskatchewan had the lowest PST outside of Alberta. In the same year the NDP also cut business taxes from 17 per cent to 12 per cent.

But they also haven’t been afraid to raise taxes. 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 said about her latest budget 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 for Saskatchewan, needs to put forward a plan on how they are going to reduce spending.

Since 2007, the Saskatchewan government has spent an average of about $900 million per year on corporate welfare, according to the Fraser Institute. Slashing these handouts would be enough money 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, only means that that taxpayers will have to pay off the government credit later, with a bigger bill.

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.


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Franco Terrazzano
Federal Director at
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Federation

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