On March 23, 2011, Finance Minister Ken Krawetz presented a balanced 2012-2013 budget for Saskatchewan that delivers sustainable spending with a goal of keeping the province’s economy strong. It is expected that Saskatchewan’s economy will lead the country in growth over the next two years, with a predicted increase of 3.1% in the coming year, and an increase of 3.3% in 2013.
This year’s budget proposes to make capital expenditures in excess of $780 million, with much of this investment being directed towards health care improvements, enhancements to the education system, upgrading the highway system, and providing assistance and services to improve the quality of life for the residents of Saskatchewan.
The budget contains no new measures from a commodity tax or payroll tax perspective. However, several interesting income tax proposals were introduced in this year’s budget address, as noted below.
Income Tax Measures
The budget announced a new 10% reduction in the general corporate income tax rate on income earned from qualifying newly-constructed residential projects in the province. The tax rebate will be available for a period of up to 10 years once the projects become available for rent.
R&D Tax Credit
Saskatchewan currently has a 15% refundable tax credit for R&D expenditures incurred in the province. Effective April 1, 2012, the 15% refundable tax credit will only be available to Canadian-controlled private corporations (“CCPCs”), up to an annual limit of $3 million of qualifying expenditures. Qualifying expenditures in excess of this limit, as well as expenditures incurred by non-CCPCs, will be eligible for a 15% non-refundable tax credit, which can be carried forward up to 10 years or carried back up to 3 years.
Film Employment Tax Credit
The Film Employment Tax Credit has been in place since 1998 and has provided a refundable income tax credit equal to 45% of eligible labour costs incurred by the film industry in Saskatchewan. Effective April 1, 2012, this tax credit has been eliminated, but film productions that previously qualified will still be entitled to this tax credit.
Additional information on the 2012-2013 Saskatchewan budget is available on the province’s web site at:
Saskatchewan Budget 2012