Saskatchewan tabled a balanced budget for fiscal 2010-11 by reducing overall government spending by $121.3 million or 1.2% from last year’s budget.
No major tax changes were proposed in this budget, except for an increase in tobacco taxes. The budget’s few tax and other revenue measures are summarized below.
Tobacco Tax – Effective midnight, March 24, 2010, the tobacco tax rates will increase as follows:
Tax-free Allowance to First Nations – The tax-free allowance to First Nations’ individuals will be reduced to one carton per week from the current three cartons per week which will come into effect once legislation is proclaimed.
Liquor Mark-Ups – Effective April 1, 2010, the price of spirits, wine and beer in Saskatchewan liquor stores will increase due to changes in liquor mark-ups. For example, the price for most 750 ml bottles of spirits will increase by 50 cents while the price for a dozen bottled beer will increase by 75 cents. The price for higher end wine and spirit products will also increase by approximately 5%, depending on the value of the product. The majority of wine products (750 ml) that retail for less than $20 will not see a change in price.
Education Property Tax – In last year’s budget, the government introduced significant reductions in education property tax through the use of province-wide mill rates. At that time, they promised that education property tax would be reduced a further $53 million in 2010. However, Budget 2010 has delayed these reductions and confirmed that education property tax rates will remain at 2009 levels.
Graduate Retention Program (GRP) (2008 Saskatchewan Budget) – Effective January 1, 2008, a new refundable provincial income tax credit initiative was introduced to replace the previous Graduate Tax Exemption introduced in the 2007 budget. The GRP tax credit rebates up to $20,000 of tuition fees paid by eligible graduates of Saskatchewan post-secondary institutions. Eligible graduates include individuals who complete an approved program at a Saskatchewan post-secondary institution. Eligible programs must be at least six months in duration and must result in a certificate, diploma or undergraduate degree, or provide certification to journey persons.
In a provincial news release dated October 30, 2008, the Saskatchewan government announced that GRP eligibility is being expanded to include post-secondary graduates of approved programs both within and outside Canada. The newly expanded program is intended to support Saskatchewan employers in meeting their recruitment and retention needs.
The tuition rebate is based on actual tuition amounts paid by an individual by using the T2202A tuition receipts issued by the institutions. The maximum rebate for each completed program of study is:
To be eligible for full tuition rebates, graduates must remain in Saskatchewan for the seven years after graduation. Eligible graduates who continue their post-secondary education in another eligible program are eligible for additional tuition rebates, however the total amount of tuition rebates any graduate can receive over a lifetime is $20,000. A graduate’s tuition rebate entitlement is paid as a refundable tax credit over a seven-year period, with 10% of the entitlement paid out in each of the first four years after graduation and 20% paid out in each of the next three years. Graduates are required to attach Ministry certificates and all applicable tuition receipts to their Saskatchewan income tax return. CRA will use the tuition receipts and eligibility certificate to establish the graduate’s total rebate entitlement. Based on the entitlement amount, the CRA will calculate the individual’s rebate payment for each taxation year, applying the seven-year rebate claim schedule. Tax refunds will be made each year the graduate files a Saskatchewan income tax return for each of those years.
Those 2006 and 2007 graduates who were eligible under the previous Graduate Tax Exemption program continue to benefit under that program for the 2007 tax year. These graduates who meet the GRP eligibility criteria also receive benefits under the new program based on a portion of tuition costs and the specific program of study completed. The maximum amounts of tuition that can be claimed by eligible 2006 and 2007 graduates are:
Tuition rebate benefits for 2008 and 2009 graduates are also based on their course of study and a portion of their tuition costs. The maximum amounts of tuition that can be claimed by eligible 2008 and 2009 graduates are:
The program will be fully implemented, and will provide full benefits in 2010.
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