(File photo/CJME Staff)

By CJME Staff

Gov’t backtracks on some PST charges as part of four-point plan

Aug 23, 2022 | 11:46 AM

A reversal of fortunes for Saskatchewan has led to the reversal of a plan by the provincial government.

Thanks to resource revenue more than $1.5 billion higher than was expected when the budget was released in March, the provincial government unveiled Tuesday what it called a “four-point affordability plan” to help residents.

In addition to the $500 Saskatchewan Affordability Tax Credit announced Monday by Premier Scott Moe, the government also is reversing its plan to charge the provincial sales tax on certain items starting Oct. 1.

According to a media release, the PST won’t be charged on fitness and gym memberships as well as some recreational activities.

The government said the PST won’t be charged to residents under the age of 18 who are participating in recreational activities, including golf, curling, hockey, tennis, basketball and similar sporting activities. Those activities will be taxable for those 18 years of age and older.

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The PST also won’t be applied to fitness classes, personal training and other fitness activities offered through municipal recreational facilities, or to arts, cultural and sports programming or membership fees for things like gymnastics, art classes or acting classes.

The provincial sales tax will still be levied on tickets for things like sporting events, concerts, trade shows, fairs, rodeos, movie theatres, water parks, escape rooms, batting cages and arcades.

$500 tax credit

All Saskatchewan residents aged 18 and over as of Dec. 31 and who have filed a 2021 tax return as a resident of Saskatchewan will receive a $500 cheque this fall.

The government estimated the tax credit will cost it $450 million, with an estimated 900,000 cheques to be mailed.

Tax rate reduction

Another point of the plan was the extension of the small business tax rate reduction.

The rate will be zero per cent retroactive to July 1 of this year, and the restoration of the rate to two per cent will be delayed to July 1, 2024.

“This will help small businesses as they continue to recover from the pandemic, while facing new challenges like inflationary pressures, interest rate hikes and supply chain issues,” the government’s release said.

The government said the move will save small businesses $93.1 million over the next three years, or an average of $3,000 for each of the 31,000 small businesses in Saskatchewan.

Retiring operating debt

The fourth point of the plan was the retirement of up to $1 billion in operating debt.

The government said the debt is now forecast to be $1.7 billion lower by the end of the fiscal year than was projected when the budget was released.

The projected surplus of $1.04 billion gives the government the ability to retire up to $1 billion in debt, and the province doesn’t need to borrow for operations due to the improved financial position.

When the budget was released in March, a deficit of $463 million was expected.

The government said debt retirement and lower borrowing results in lower financing charges because of a projected $49-million decrease in interest costs.