On March 20, 2013, Finance Minister Ken Krawetz presented the 2013 Saskatchewan budget, which is committed to a long-term plan of balanced growth. In order to achieve the goal of a balanced budget, spending will only increase by 3.1%. Saskatchewan takes great pride in administering its’ own sales tax, which it feels lightens the tax load placed on Saskatchewan residents, due to the fact that many goods and services are not included in the provincial tax base. In addition, the province notes that the tax burden placed on residents is much lower under its sales tax system when compared to a harmonized sales tax, which has a much broader tax base.
This year’s budget proposes to make capital expenditures of $847.5 million directed towards areas similar to the last budget, such as education and health care. The budget contains no new measures from a commodity, income or payroll tax perspective. However, several tax rate changes were introduced in this year’s budget, as noted below.
Commodity Tax
Tobacco Tax
The tax rate on tobacco product will increase from 21 cents to 25 cents per cigarette or gram of cut/loose tobacco, effective at midnight on March 20, 2013.
Liquor Mark-Ups
The mark-up rates for all alcoholic beverage categories will be increased by approximately 3 per cent by the Saskatchewan Liquor and Gaming Authority, effective April 1, 2013.
Saskatchewan Resource Credit (“SRC”)
The SRC is a credit provided by the province to natural resource producers to offset Crown royalties and production taxes otherwise payable on the production of oil, natural gas, potash, uranium and coal in Saskatchewan. The current rates of the SRC for oil and natural gas production from wells drilled before October 2002 is either 1 per cent or 2.5 per cent of the value of production, depending on the well type and when the well was drilled. There is currently no SRC available for oil and natural gas production from wells drilled after September 2002. In addition, the current SRC rate for potash, uranium and coal production is 1 per cent of the value of sales. As part of the province’s commitment to ensuring a balanced budget, the SRC currently available to natural resource producers is being reduced by 0.25 percentage points, effective April 1, 2013.
Income Tax
The province reaffirmed its commitment to reduce the current general corporate income tax rate from12 per cent to 10 per cent by the year 2015. However, this commitment is being deferred until the province considers it to be affordable in terms of a balanced budget. Additional information on the 2013-2014 Saskatchewan budget is available on the province’s web site at: