Sask Budget Not So Bad

It pains me to say it, but I do believe in giving credit when it is due, the NDP's budget wasn't so bad. Of course it wasn't without it faults, but I am definately a fan of the big ticket item: corporate tax cuts. Minister Thomson hinted at a corporate tax cut, but I must admit that this is more than expected (I've come to have low expectations of the NDP due to their track record). This is definitely a move in the right direction (no pun intended). We can now hope that the lower tax rate for businesses will lure investment and create jobs for our young people. If the corporate tax rate does indeed reach 12% by 2008, it will be a very good for Saskatchewan.

I am also a fan of the idea to lower the capital tax rate and eventually scrap it by 2008. As well, I'm glad that money is going to servicing our debt, but is it enough? Will the spending spree that the NDP is going on limiting the amount we could be paying? More money being thrown into the black hole that is public health care? Really?

It is also good to see a commitment to post-secondary education by committing to increasing seats in our institutions, particularly the technical colleges, which are in desperate need of more spaces. However, I am not a fan of a tuition freeze; the $18 million that is going towards keeping the freeze until 2008 is not the best use of money for post-secondary education. It is a band-aid solution to the problem of escalating tuition fees. By implementing a grants program or revamping the student loans program with that money, students would be better served.

Another point of criticism is the fact that amid a time of farm crisis not one red cent went towards greater farm aid. This is a slight to the people of rural Saskatchewan, who all suffer when the farming industry is in peril. But the NDP's disregard for rural Saskatchewan has come to be expected. It seems that they are no longer trying to hide their intentions to ruin rural Saskatchewan so that more power moves to the cities where they find their core support.

All in all, the budget wasn't bad. Perhaps with so much support showing for the Sask Party recently, the NDP has opted to swing to the right and recoup some support that they have lost in Saskatoon and Regina. How long this rightward swing will last is yet to be seen.

No PST Cut Not Such a Bad Thing

Andrew Thomson, the Minister of Learning, stated today that the NDP government is not considering lowering the PST in the upcoming Provincial budget due out tomorrow. While it is rare for me to agree with the NDP, on this issue I must reluctantly admit that I am in agreement with them.

Seven percent is a pretty standard rate across the country, with many provinces charging more than that and only Alberta, which has no provincial sales tax, charging less. The sales tax may seem like a burden to some, due to Saskatchewan's proximity to the oil-laden province to the West, but Saskatchewanians face no greater burden that the citizens of other provinces in terms of the amount of sales tax we pay.

On the contrary, Saskatchewanians are overburdened by the highest effective corporate tax rates in the country. This has had the effect of scaring away businesses from the provinces, inhibiting new businesses to be created, and adding to the well-held perception that Saskatchewan is an anti-business province. It should be noted that the fact that Saskatchewan has been ruled for 46 of the last 62 years by a socialist government hasn't helped the situation, but I digress...

I should be clear that I am not opposed to a reduction in the provincial sales tax, as I generally believe that any reduction in taxes is a good thing in principle. However, Saskatchewan might not be able to afford to do all of this at once and priorities must be made. And as far as tax priorities go, I see addressing consumption taxes as low on the priority list compared to corporate taxes (first priority) and personal income taxes (second priority).

That being said, I do like Mr. Vicq's recommendation of lowering the PST to 5% and harmonizing it with the GST. I lived in Nova Scotia for four years where the sales tax was harmonized and I would be hard-pressed to tell you which goods and services were taxed in Nova Scotia that hadn't been taxed in Saskatchewan. It is a simple enough thing to do I imagine, as three other provinces have already done it. It would allow us to lower the tax rate, making us more competitive with our provincial neighbors, to whom we do lose business in some areas, while not restricting our sales tax revenues to a great extent.

Based on the current situation, the best tax relief that can be offered right now to citizens of Saskatchewan is a reduction in the corporate tax rate so that business can not only be maintained but expanded, providing jobs to the thousands of young people that face the prospect of leaving the province each year. For once, the NDP seems to be on the right track in committing to reduce the corporate tax rate, as per Mr. Thomson's comments today. However, how much the NDP, with their shady record on taking any sort of risk that might actually benefit the province, will actually commit to lowering business taxes is yet to be seen; when it comes to the provincial government in Saskatchewan, I've come to expect disappointment.