It remains to be seen how Saskatchewan farmers and rural municipalities will be affected by government efforts to balance the provincial budget.
But delegates who attended the Saskatchewan Association of Rural Municipalities’ annual convention in Saskatoon this week were bracing themselves for the worst.
In a March 15 interview, SARM president Ray Orb said he has not received any definitive indication from the province of steps that will be taken to address a provincial deficit that is expected to exceed $1 billion.
But Orb acknowledged that farmer-friendly programs like the Farm Fuel Tax Rebate and PST exemptions on farm inputs could be on the table.
There is also speculation that the Saskatchewan Shortline Railway Sustainability program could be in the crosshairs.
“We’ve heard a lot of discussion on that (the Farm Fuel Rebate program),” Orb told The Western Producer.
“We haven’t been approached directly by the finance minister, but we did meet with Minister Doherty in January of this year and we discussed fuel and other (farm-related tax) exemptions…. He did simply tell us that everything is on the table.”
Comments made at the SARM convention by municipal leaders suggest that program changes are more likely than an outright removal of the farm fuel rebate.
But program changes are possible.
It is possible, for example, that rebates would be retained for fuel that is burned in the field but removed for fuel that is burned on provincial highways.
“We still believe that exemptions for agriculture should stay in place … at least for fuel that is used in farmers’ fields … but I know there’s been discussion about trucks…,” Orb said.
“I’ve heard some talk, and it’s only speculative talk at this point, about that exemption ending.”
The elimination of provincial PST exemptions on farm machinery purchases, seed, fertilizer and farm chemicals could have an even larger impact, Orb said.
As it stands, the majority of farm inputs are PST exempt, but it is possible that some of those exemptions could be removed or eroded in an effort to balance the provincial budget.
“More important than fuel, I think, are possible exemptions on fertilizers and farm chemicals and other inputs,” Orb said.
The provincial sales tax generates provincial revenues of approximately $1.3 billion per year.
In a March 14 address to SARM delegates, Saskatchewan Premier Brad Wall said the province needs to reduce its dependence on resource revenues and focus more on taxing consumption.
Wall added, however, that the province will take steps to ensure that the farm economy is not treated unfairly.
“We have an ag sector that’s been strong, and its been carrying the weight for a lot of the economy, so let’s not shock it. Let’s not stress that ag sector too much,” he said.
“We’re going to make sure we balance the need for fairness for revenue with the importance of the agriculture sector.”
SARM delegates familiar with Saskatchewan’s short-line railway industry indicated this week that the Saskatchewan Shortline Railway Sustainability program could be on the chopping block.
That program provides up to $1 million per year to assist the province’s short-line railways with asset maintenance.