Saskatchewan taxpayers can expect to see a pair of tax system shifts, including a move towards consumption taxes, when the province unveils their provincial budget on March 22.
Premier Brad Wall posted a video on Facebook this morning in advance of Wednesday’s provincial budget being delivered by Finance Minister Kevin Doherty. He said taxpayers can expect to see a series of initiatives in order to return to a balanced budget
“There will be a shift away from a reliance on resource revenues and toward other types of taxes to help make up the shortfall,” Wall said in his video statement.
“But there will be another shift as well, a shift toward consumption taxes but away from taxes on income and productivity.”
“This fundamental change in our tax system is designed to keep our economy strong, while generating the revenue needed to ensure important public services are sustainable and affordable in the long run.”
Wall pointed out that Saskatchewan’s resource revenues during years of high commodity prices helped contribute $2.5 billion to the province, accounting for nearly 20 per cent of overall revenue.
This revenue allowed the province to lower taxes, and as part of their growth plan they pursued
new investment and new jobs through reduced lower small business taxes plus new growth tax incentives.
However, the province continues to operate with an over-reliance on resource revenues to fund government services. When resource revenues dropped over the past three years, the province was significantly impacted by this drop in revenue.
“No one expected resource revenues to fall below the low end, to fall over $1 billion and stay there for three years, depleting the rainy day fund.”
“And for our part, as government, we have to take responsibility, and we must take action to rebalance the spending and our revenues to reflect this new reality. This means controlling and reducing government spending, and it means restructuring the tax base to reduce our reliance on resource revenues.”
Wall said the province will unveil their plan on Wednesday to return to balanced budgets within three years. The budget will contain some tough choices to control and reduce government spending instead of running deficits indefinitely.
“This budget faces head-on the reality of our lower resource revenue base by restructuring the tax base, controlling and reducing government spending, and ensuring Saskatchewan’s budget returns to balance by 2019.”