The Canada West Foundation suggests major changes in Saskatchewan’s tax structure to make it more competitive with other western provinces.
“The challenge of a competitive tax system hits hard in Saskatchewan. Saskatchewan is neighbour to British Columbia and Alberta – the two jurisdictions in Canada with some of the lowest tax rates (in personal and corporate income taxes),” said a report written by Jack Vicq and Casey Vander Ploeg of the foundation, in a report prepared for the Saskatchewan Chamber of Commerce.
The report proposed seven reforms to Saskatchewan’s tax system, including proposals to reduce both corporate and individual income tax and lower the amount of education funding derived from property tax.
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Also included was an option to introduce a harmonized sales tax of seven percent.
Vicq said the regressive nature of the sales tax could be offset by reforms to income tax and low-income tax credits.
The report suggested that an HST is needed as part of an overall package of reforms aimed at producing a more favourable mix of taxation away from personal and corporate taxes.
Rural and agricultural property taxes were not a concern of the report, which was modelled around taxes in the major centres of Regina and Saskatoon. However, Vicq said lower personal and corporate taxes would benefit farmers.
Saskatchewan’s farmers have already waged a campaign to lower the education portion of their property tax.
“Really, the farm groups that started the revolution in education (tax), we figured that we haven’t heard much from them lately so they must be in a pretty satisfactory place,” said Vicq.
The report also recommended shortening the assessment cycle on property to every two years from the current four to make assessments more accurate.
