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

A turning point in Saskatchewan’s fortunes has reversed a provincial government plan.

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

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

According to a media release, the PST is not levied on fitness and gym memberships and some recreational activities.

The government said the PST will not be charged to residents under the age of 18 who participate in recreational activities such as golf, curling, hockey, tennis, basketball and similar sporting activities. These activities are taxable for persons aged 18 and over.

The PST also does not apply to fitness classes, personal training, and other fitness activities offered by community recreational facilities, or arts, culture, and sports programs, or membership fees for things like gymnastics, art classes, or acting classes.

Provincial sales tax will continue to be levied on tickets to sporting events, concerts, fairs, fairs, rodeos, movie theaters, water parks, escape rooms, batting cages and arcades.

$500 tax credit

All Saskatchewan residents who are 18 and older on December 31 and filed a 2021 tax return as a Saskatchewan resident will receive a $500 check this fall.

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

reduction in the tax rate

Another point of the plan was the extension of the small business regulation.

The rate will be zero percent retroactively as of July 1 this year, and the restoration of the rate to two percent is deferred to July 1, 2024.

“This will help small businesses continue to recover from the pandemic as they face new challenges such as inflationary pressures, interest rate hikes and supply chain issues,” the government 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 Saskatchewan’s 31,000 small businesses.

repayment of business debts

The fourth item in the plan was to pay off up to $1 billion in operating debt.

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

The projected surplus of $1.04 billion gives the government an opportunity to pay off up to $1 billion in debt, and the province does not need to borrow to operate due to the improved fiscal position.

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

The government said the reduction in debt and borrowing will result in lower funding costs as interest costs are expected to fall by $49 million.