2016 Saskatchewan Budget Summary | FBC, Canada's Farm & Small Business Tax Specialist

2016 Saskatchewan Budget Summary

2016 Saskatchewan Budget Summary

Keeping Saskatchewan Strong

On June 1, 2016, Finance Minister Kevin Doherty presented his first budget as Finance Minister. 

Highlights

  • Deficit of $434 million for 2016-17
  • Spending increase of 2% from last year
  • No changes to personal or corporate taxes
  • No new taxes
  • Investment in health, education, infrastructure and social services

The budget anticipates a deficit of $434 million for the 2016-2017 fiscal year.

Although the budget does not include any changes to personal or corporate tax rates, it adjusts the provincial dividend tax credit rate to maintain the current level of provincial taxation on non-eligible dividends.

The budget eliminates the Active Families Benefit and introduces a program to allow post-secondary graduates to use Graduate Retention Program tax credits towards buying their first home in the province.

Personal Tax Measures

No New Taxes Increases for 2016

No changes to Saskatchewan’s personal income tax rate were announced in the budget.

As a result, Saskatchewan’s combined federal and provincial top marginal tax rates are as follows:

Personal Combined Top Marginal
Tax Rates for 2016

Interest and regular income

48.00%

Capital gains

24.00%

Eligible dividends

30.33%

Non-eligible dividends

40.06%

Personal tax credits for 2016 will be indexed by 1.013%. 

The maximum tax credits amounts and actual Saskatchewan tax credits for 2015 and 2016 are set out below.

Saskatchewan Non-Refundable Tax Credits

 

2015

2016

Maximum Amount

Saskatchewan Tax Credit

Maximum Amount

Saskatchewan Tax Credit

Basic Personal Amount

$15,639

$1,720

$15,843

$1,743

Spousal Amount

15,639

1,720

15,843

1,743

Eligible dependent amount

15,639

1,720

15,843

1,743

Age amount

4,764

524

4,826

531

Infirm dependent amount

9,214

1,014

9,334

1,027

CPP Contributions

2,480

273

2,544

280

EI Contributions

931

102

955

105

Pension income amount

1,000

110

1,000

110

Disability amount

9,214

1,014

9,334

1,027

Disability supplement

9,214

1,014

9,334

1,027

Tuition and education amounts

Variable

Variable

Variable

Variable

Adoption expenses

N/A

 

N/A

 

Medical expenses

Variable

Variable

Variable

Variable

Medical expenses (other dependents)

Variable

Variable

Variable

Variable

Caregiver amount

9,214

1,014

9,334

1,027

Interest on student loans

Variable

Variable

Variable

Variable

Donations & Gifts
-first $200
- over $200


200
75% of income


22
Variable


200
75% of income


22
Variable

In general, credits are multiplied by 11% to arrive at the deduction from Saskatchewan Tax.  In the case of donations and gifts over $200, the credit is 15%

Active Families Benefit

The budget eliminates the Active Families Benefit, a refundable personal income tax credit, intended to assist families with the cost of registering children in cultural, recreational and sports activities.

Graduate Retention Program First Home Plan

The province has a Graduate Retention Program (GRP) that permits a student who graduates from post-secondary education to be eligible for tax credits of up to $20,000 if they become and remain residents of Saskatchewan.

The budget introduces a new program to allow eligible post-secondary graduates to use up to $10,000 of their future GRP tax credits as an interest-free loan to use toward the down payment on their first home in Saskatchewan.

Dividend Tax Credit

Because the federal government made changes to the factors used in the calculation of the federal dividend tax credit, the budget announces that Saskatchewan intends to introduce amendments to the provincial dividend tax credit to leave tax on dividend income unchanged.  

No further details were provided in the budget.

Corporate Tax Measures

Corporate Tax Rates (No Change)

The budget did not announce any changes to the corporate tax rate. As a result, the corporate income tax rates effective January 1, 2016 are as follows:

Corporate Income Tax Rates — As of January 1, 2014

 

Saskatchewan

Combined Federal
and Saskatchewan

General

12%

27%

M&P

10%

25%

Small business*

2%

12.5%

*On first $500,000 of active business income

Read a review of the 2016 Saskatchewan Ministry of Agriculture Budget Summary and comments from Agriculture Minister Lyle Stewart.

How Saskatchewan Compares

The following chart compares top personal and corporate tax rates and sales taxes for all provinces and territories, as announced to June 1, 2016.

 

 

2016 Corporate Tax Rates

 

 

Top 2016 Personal Rates

General
%

M&P
%

Small Business
%

2016 Prov. Sales Tax

B.C.

47.70

26.00

26.00

13.00

7.00

Alta.

48.00

27.00

27.00

13.50

-

Sask.

48.00

27.00

25.00

12.50

5.00

Man.

50.40

27.00

27.00

10.50

8.00

Ont.

53.53

26.50

25.00

15.00

8.00(5)

Qué.

53.31

26.90

26.90

18.50(3)

9.975(6)

N.B.

53.30

29.00(1)

29.00(1)

14.00(1)

8.00(7)

N.S.

54.00

31.00

31.00

13.50

10.00(5)

P.E.I.

51.37

31.00

31.00

15.00

9.00(8)

N.L.

49.80

30.00(2)

30.00(2)

13.50

8.00(7)

Yukon

48.00

30.00

17.50

13.50(4)

-

N.W.T.

47.05

26.50

26.50

14.50

-

Nunavut

44.50

27.00

27.00

14.50

-

  1. Effective April 1, 2016, the general corporate tax rate increased from 27% and the small business tax rate decreased from 14.5%
  2. Effective January 1, 2016, the general corporate tax rate increased from 29% and the M&P rate increased from 20% due to the elimination of the Manufacturing and Processing Profits Tax Credit.
  3. Quebec provides a rate reduction for manufacturing SMEs.  Where certain conditions are met, the maximum reduction available is 4%, for a combined rate of 14.5%.  Note that a lessor reduction may be available to certain manufacturing SMEs where not all conditions are met.
  4. The tax rate for M&P profits eligible for the small business deduction is 12%.
  5. As part of the HST (combined rates are 15% in Nova Scotia and 13% in Ontario).
  6. The QST system is harmonized with the GST, though two separate tax systems remain – the GST and the amended QST.
  7. Effective July 1, 2016, the provincial portion of the HST in New Brunswick and Newfoundland & Labrador will increase to 10%, which will increase the combined HST rate from 13% to 15%.
  8. Effective October 1, 2016, the provincial portion of the HST in Prince Edward Island will increase to 10%, which will increase the combined HST rate from 14% to 15%. 

(Source: Saskatchewan Government)

"Fortune sides with him who dares." — Virgil