Saskatchewan Budget Report 2019

Saskatchewan Budget Report 2019

Saskatchewan Budget Report 2019

The Right Balance!

On March 20, 2019, Finance Minister Donna Harpauer delivered her second budget as Finance Minister. 

The budget is balanced and anticipates a surplus of $34.4 million for 2019-20 and $49 million for 2020-21.

Although the budget does not include any new changes to the corporate or personal tax rates, it eliminates certain deductions used to calculate the Potash Production Tax and announces new non-refundable provincial tax credits for volunteer firefighters and volunteer emergency medical first responders.

The budget does not include any changes to Saskatchewan’s PST.

The government’s operational debt will not increase in 2019-20.

Revenue is forecast at $15.03 billion, up about $782 million, or 5.5%, compared to last year’s budget. 

Expense of $14.99 billion is projected, up from the previous year’s budget by $382 million, or 2.6%.

The budget focused on 3 key priorities:

  1. Focus on Safety
  2. Investments in health care, seniors, students and classrooms and vulnerable families
  3. Investments in Infrastructure

Investing in Health

Total investment in health in 2019-20 is projected to be $5.89 billion, an increase of $123 million, or 2.1%. 

The budget increases operating funding to the Saskatchewan Health Authority.  Increase in funding is also targeting mental health and addictions initiatives by nearly $30 million in this budget. 

The 2019-20 Budget also provides a $700,000 increase for the Autism Individualized Funding benefit. 

Specific health care capital investments in this budget include funding the preconstruction design of a new Victoria Hospital in Prince Albert.

Support for Seniors

The 2019-20 Budget continues to improve care for seniors by investing to replace the Northland Pioneers Lodge in Meadow Lake. 

This budget also increases home care support to help people stay safely in their homes as long as possible through the Connected Care program.

Investing in Social Services

The 2019-20 Budget makes a $1.43 billion investment in social services and assistance. 

The budget provides an increase of more than $27 million to support at-risk children and families. 

Community-based organizations and those who deliver services to children and families and provide support for people with intellectual disabilities will receive an additional $5.9 million in 2019-20. 

The budget also provides a $6.6 million increase in support for adults with intellectual disabilities, and $1.4 million has been designated to increase monthly payments for foster families who complete training.

Investing in Education

Saskatchewan’s school divisions will receive $1.9 billion in operating funding for the 2019-20 school year, an increase of more than $26 million year over year.

Highlights

  • A surplus of $34.4 million is projected for 2019-20
  • A surplus of $49 million in 2020-21
  • No changes to personal or corporate income tax rates
  • No changes to Saskatchewan’s PST

Personal Tax Measures

Personal income tax rates – No changes were announced!

The budget did not announce changes to personal tax rates.   

As a result, Saskatchewan’s combined federal and provincial top marginal rates for income, capital gains and dividends are as follows:

Personal Combined Federal/Provincial Top Marginal Rates

 

2018

2019

Interest and regular income

47.50%

47.50%

Capital gains

23.75%

23.75%

Eligible dividends

29.64%

29.64%

Non-Eligible dividends

39.60%

40.37%

Personal tax credits for 2018 will be indexed by 1.000%.   The maximum tax credit amounts and actual Saskatchewan tax credits for 2018 and 2019 are set out below.

Saskatchewan Non-Refundable Tax Credits

 

2018

2019

Maximum Amount

Saskatchewan Tax Credit

Maximum Amount

Saskatchewan Tax Credit

Basic Personal Amount

$16,065

$1,727

$16,065

$1,727

Spousal Amount

16,065

1,727

16,065

1,727

Eligible dependent amount

16,065

1,727

16,065

1,727

Age amount

4,894

526

4,894

526

Infirm dependent amount

9,464

1,017

9,464

1,017

CPP Contributions

2,594

279

2,749

296

EI Contributions

858

92

860

92

Pension income amount

1,000

108

1,000

108

Disability amount

9,464

1,017

9,464

1,017

Disability supplement

9,464

1,017

9,464

1,017

Tuition amounts

N/A

 

N/A

 

Adoption expenses

N/A

 

N/A

 

Medical expenses

Variable

Variable

Variable

Variable

Medical expenses (other dependents)

Variable

Variable

Variable

Variable

Caregiver amount

9,464

1,017

9,464

1,017

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 10.75% to arrive at the deduction from Saskatchewan Tax.  In the case of donations and gifts over $200, the credit is 15%

Volunteer Emergency Responders

The budget introduces new non-refundable tax credits for volunteer firefighters and for volunteer emergency medical first responders, effective beginning in the 2020 taxation year.

Under the proposal, individuals that perform at least 200 hours of eligible volunteer services in a year (as certified by the organization managing the volunteer services) will be able to claim a $3,000 tax credit amount.  

Saskatchewan advises that eligible volunteer services consist of responding to and being on call for emergencies, attending required meetings and participating in required training.

This credit is mutually exclusive with the existing $1,000 income exemption for honoraria, and individuals who receive honoraria can select either the exemption or this tax credit.

Corporate Tax Measures

Corporate Tax Rates

The budget did not announce changes to Saskatchewan’s corporate tax rates. 

As a result, Saskatchewan’s corporate tax rates remain as follows:

 

Rates

2018

2019

Sask

Federal & Sask Combined

Sask

Federal & Sask Combined

Small-business tax rate

2.0%

12/17%

2.0%

11/17% **

General manufacturing and processing tax rate

10%

25%

10%

25%

General corporate tax rate*

12%

27%

12%

27%

* On first $600,000 of active business income
** The combined federal and provincial rate of 17% applies to active business income in excess of $500,000 to the Saskatchewan threshold of $600,000

Potash Production Tax Increases

The budget cancels certain deductions used in calculating the Potash Production Tax (PPT), effective April 1, 2019.  

Specifically, the budget eliminates the Saskatchewan Resource Credit for potash production, and no longer allows taxpayers to deduct Crown and freehold royalties in determining the base payment or the profit tax component of the Potash Production Tax.

PPT calculation will be changed by eliminating the deduction for the Saskatchewan resource credit, which is 0.75% of potash sales, and removing the deduction for Crown and freehold royalties paid.

The result is a simplified PPT calculation that is strictly based on a fixed dollar amount per tonne of potash sold.  

It’s estimated that this change will result in an additional $117 million in tax revenues.

Provincial Sales Tax (PST)

The budget does not include any changes to Provincial Sales Tax. 

(Source: Saskatchewan Government)

“It’s pointless to set goals if you are not going to try to hit them.” — Don Connelly