REGINA – The Saskatchewan government has brought forward a budget that attempts to put the brakes on spending increases and peels back tax incentives for middle-class families, graduates and the potash industry.
A global oil downturn is putting the squeeze on the province’s bottom line, but Finance Minister Ken Krawetz noted Wednesday that there are no new personal income taxes or fee increases.
There are signals, however, the government will consider hiking the education portion of property tax bills in the years ahead.
“There is no doubt this is a challenging budget,” Krawetz said. “But the good news is Saskatchewan has never been in a better position to meet this challenge. Our economy is more diversified than ever before.”
Oil revenue is down $661 million from last year’s budget. The government is forecasting that oil will average US$53 a barrel in 2015 and $67 a barrel in 2016. The price has hovered around $40 a barrel this week.
Changes to tax incentives and certain programs were necessary given the fiscal climate, Krawetz said.
A tax incentive for parents who register their children in sports will now only be offered to families earning less than $60,000 a year. A $20,000 tuition refund for graduates who stay in the province is being converted to a non-refundable tax credit.
About 6,000 seniors will be bumped from the rolls of the Seniors Drug Plan as the government shifts the income threshold to $65,500 from $80,000.
“When we look at the expenditures of our government on our people less fortunate … we were going to continue to do that, but we wanted to make this change to ensure that those programs continue,” Krawetz said.
Overall, the government is forecasting a surplus of just over $100 million on spending that is up only 1.2 per cent over last year’s budget. It predicts $14.28 billion in revenue and spending of $14.17 billion.
Changes to tax deductions for the potash industry are expected to increase the government’s take by $150 million. The province is also planning a review of the potash royalty structure.
NDP finance critic Trent Wotherspoon said the budget does little for the average Saskatchewan family.
“The provincial budget shows that this government can fix seniors care, build a better education system and make life affordable for middle-class, hard-working families, but they aren’t going to,” Wotherspoon said.
The NDP has long criticized the government for what it has said is a lack of attention to seniors issues. An ombudsman investigation was launched into cases of alleged neglect in November.
The budget allocates $10 million in new investment to seniors care, bringing the total for 2015-16 to $14.5 million.
Marilyn Braun-Pollon with the Canadian Federation of Independent Business said the budget is good news, despite the winding down of a loan program that caters to small business owners.
“The fact that it had been on the decline for a number of years tells me (business owners) are finding alternate sources (of funding).”
She said business owners had been concerned that the government would make up the oil revenue shortfall with tax hikes.
Todd MacKay, Prairie director of the Canadian Taxpayers Federation, said he was “extremely happy” there no tax increases.
“They did that work on the provincial budget rather than off-loading that stress on Saskatchewan families,” he said, adding that he would have preferred to see broad-based tax cuts instead of changes to tax incentives.
The budget included a $5.8 billion investment in provincial infrastructure over the next four years.
Premier Brad Wall said the government will borrow $700 million for capital investment in infrastructure, adding that it won’t go towards operational costs.
“We have record-low interest rates,” he said. “We do want to keep building the province.”