Being sinful is going to be a little less sweet this fiscal year. If you’ve been debating on cutting back your smoking and drinking habits, the sin tax changes being implemented might be the motivation you need.
The Saskatchewan government unveiled its 2017-2018 budget today, and will be making adjustments to expenditure, capital and revenue models to combat the province’s forecasted $685 million deficit. The Sask Party plans on “meeting the challenge” of balancing the books over a three year plan.
To start, effective March 23 the provincial sales tax will be adjusted for the first time since it was slashed from seven to five per cent in 2006. Due to Saskatchewan’s economic woes, the provincial government announced today that the PST will bounce back up one point to six per cent, which the government expects to rake in a whopping $242 million.
However, those with monkeys on their backs will face even further taxation for their habits.
Currently, the Saskatchewan government is charging smokers $6.25 per pack of 25 cigarettes. However, effective March 23, smokers will see an increase in tobacco taxes from 25 cents per cigarette or gram of tobacco, to 27 cents for a total tax rate of $6.75 per pack. Combined with the PST increase, packs of cigarettes will cost an additional 50 cents on top of the one per cent sales tax increase.
During the 2016-2017 fiscal year, the government’s revenue on tobacco taxation was $270.3 million. Once the new taxation model is implemented, the Saskatchewan government forecasts that the increase in tobacco taxes will garner $280.3 million, a $10 million increase in revenue.
Smokers aren’t the only one whose wallets are taking a hit, though. A tax hit also extends to those who regularly visit their favourite local watering holes. Come April 1, each type of liquor will also undergo a price markup at different percentages. While this markup is not a consumption tax and therefore not placed on the consumer directly, it will increase the price tag at pubs and liquor boards. In turn, consumers will be expected to pick up part of the bill for the higher costs at the wholesale level.
Combined with higher PST rates, consumers can expect a small but significant jump in the cost of liquor.
In April, beer drinkers will notice a price hike to quench their thirst with a case of suds, as wholesale markups jump by 6.8 per cent. Meanwhile, people who prefer to drink coolers will be affected by a six per cent markup.
For the wine connoisseurs, that first bottle of bubbly purchased in April will cost more, thanks to the 5.3 per cent mark up. Lastly, those who stick to hard liquor will notice that they will have to cough up more to mix their favourite highballs, in response to a four per cent mark up.
Some people are upset about their lifestyle choices becoming more costly, because they feel that their vices are unfairly targeted by taxation. However, others believe this is the least of people’s concerns compared to other adjustments made in the new budget plan. “There are worse things that have happened than paying more for going out and smoking,” said Brett Penny, a consumer of liquor and tobacco. “The (STC) being cut is a big loss.”
Despite a liquor markup and tobacco tax hike burning a larger hole in people’s wallets, the Saskatchewan government claims the revenue will serve a purpose. The additional $15 million will “provide increased revenue to fund important public services,” according to a government press release.
An interview was requested with Jeremy Harrison, minister responsible for the Saskatchewan Liquor and Gaming Authority, to find out what specific public services will benefit from the expected revenue, however he was unavailable for comment at the time of publication.