Sask. budget forecasts $365 million deficit

Despite concern about tax hikes and extensive cuts, the Saskatchewan budget released today contained no huge moves one way or the other.

There was no PST hike, as some expected, and there were no large cuts similar to those seen last year such as the closure of the Saskatchewan Transportation Co.

Instead, Finance Minister Donna Harpauer pronounced the province on track to balance the budget a year from now through a plan to reduce dependency on resource revenue and control government spending.

The government plans spending of $14.61 billion on revenues of $14.24 billion for a deficit of $365 million. It predicts a modest surplus of just $6 million next year.

In terms of agriculture, the government estimates it will spend $378.6 million, or about $10 million less than it budgeted last year but on par with actual spending.

The ministry will spend about $5 million more on research and $3.4 million more on programs, but less everywhere else.

Regional services spending through transfers to individuals is down about $6 million and land management will drop $3.8 million in the crown land sale program budget line. Industry assistance is expected to decline $3 million and business risk management $6 million due to fewer AgriStability claims.

Animal Protection Services of Saskatchewan will get an increase from $610,000 per year to $800,000 for each of the next three years to investigate animal welfare.

A new business incentive, the Saskatchewan Value-Added Agriculture Incentive, has been launched through the trade and export development ministry.

It will provide a 15 percent non-refundable and non-transferable tax credit to new or existing value-added facilities that invest a minimum of $10 million to expand capacity. This includes facilities such as pea processing or canola processing plants.

Eligible projects must demonstrate that the capital expenditures were to create new or expand existing productive capacity.

The benefit redemption is 20 percent in the first year after the facility begins operating, 30 percent in the second year and 50 percent in the third year.

Other budget highlights include:

• Record spending of $5.77 billion for health care, $1.87 billion for education and a record $1.38 billion for social services and assistance.

Highways spending of $924 million to continue major projects already underway and start twinning and passing lane projects on Highways 6 and 39 between Regina and Estevan and Highway 4 between North Battleford and Cochin, and start planning similar projects on Highway 7 between Rosetown and the Alberta border and Highways 9 and 10 between Melville and Canora. Planning for further work on Highway 5 between Highway 2 and Saskatoon will also begin.

• The PST exemption for used light vehicles is removed effective April 11, while the trade-in allowance that allows a deduction for the value of the trade-in when determining PST is reinstated. The PST is paid on the difference in price and won’t be charged for used vehicles gifted between qualified family members or on private sales sold for up to $5,000.

• The PST exemption for Energy Star appliances, first implemented in 2003, is discontinued.

Personal income tax rates remain and a planned reduction is on pause, as is indexation of the income tax system.

Harpauer said this budget contains no layoffs. However, the government does plan to find $70 million in savings in both executive government and the crowns over the next two years through efficiencies and staffing management. The minister said this will be managed by individual ministries and would include such measures as replacing a retiring person at the top of the pay scale with a less experienced employee at a lower rate.

Harpauer said non-renewable resource revenue is now just 10 percent of the province’s total revenue compared to 32 percent in 2008-09. Taxation is the largest revenue source at about half of the budget.


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