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.
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.
posted by Saskatory at
1:15 AM
4 Comments:
Please show me a comparison of total taxes paid for an average business in Calgary vs. Regina ?
Include all taxes, health tax, city taxes, etc.
How much of a difference ?
By
Anonymous, at 12:40 PM
The city of Regina has eliminated its business tax rate, which previously taxed the assessed property of the business space. Calgary's on the other hand is 8.66%.
The corporate tax rate, previous to today's announcement, in Saskatchewan was 17% for corporations and 5% for small businesses. The 17% corporate tax rate stood at the highest in the country. Until today's announcement it also charged a 0.6% capital tax.
Meanwhile, the corporate tax rate in Alberta is 11.5% for corporations and 3% for small business. There is no capital tax in Alberta.
The profits of one's company and the assessed value of their properties would determine whether or not they paid higher taxes in Regina or Calgary. However, given the large difference in corporate tax rates, the municipal difference would likely not make up the difference unless they had extravagant properties.
I am pleased with the NDP's announcement today to lower the corporate tax rate in Saskatchewan, bringing our tax rates in line with the rest of the country, making us more competitive.
Businesses don't pay health taxes. Obviously it is the employees that need health care and not the corporation. I'm not sure what you were getting at there... the cost of living for individuals possibly? If so, I wasn't arguing about someone's cost of living, I was refering to high corporate rates scaring away jobs for people.
By
Saskatory, at 8:27 PM
Actually, Employers must pay their employees premiums as part of the benefit package, it is one a few payroll taxes in Alberta.
My guess is its max 1-3% either way, which is neglible. That is until today, when Saskatchewan joined the race to the bottom.
By
Anonymous, at 10:22 PM
Yeah that's what I thought you would say.
By
Anonymous, at 2:26 PM
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