Saskatchewan Updates Information Bulletin on Petroleum Drilling & Well Servicing Contractors

On June 16, 2017, Saskatchewan Finance released updates to Information Bulletin PST-13, “Petroleum Drilling & Well Servicing Contractors” to clarify which services performed by these contractors are exempt or taxable, effective April 1, 2017.  The bulletin now outlines two categories of exempt services, including drilling services to drill the well bore of an oil or natural gas well, and downhole servicing and repair, and provides examples of these services.  

The bulletin also provides examples of taxable services, as services to real property became subject to PST, effective April 1, 2017, including the construction of the well bore, above ground construction, and pipeline construction.  Furthermore, this document specifically indicates that computer services (including seismic data processing and instrumentation services), and consulting and supervision services related to overseeing or assisting with the completion of taxable services, are now subject to PST.

Furthermore, the bulletin provides guidelines concerning the bonding and clearance process, as non-resident and resident contractors carrying on business in Saskatchewan are now required to post a guarantee bond or cash deposit equivalent to 6% of the total amount to be paid under a contract in respect of taxable services related to real property.