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Finance Minister Kevin Doherty discusses the 2017-18 budget inside the Legislative Building in Regina. Photo by Josh Diaz.

Under scrutiny after amassing a $1.3 billion dollar deficit, Brad Wall and his Saskatchewan party have released their 2017-18 budget.

March 22 was a busy day in the Legislative Building as the Saskatchewan government released its 2017-2018 provincial budget in front of an anxious crowd of onlookers. Rumours about how the party would choose to tackle the $1.3 billion deficit had been cumulating in the time leading up to the announcement.


The budget plan, entitled “Meeting the Challenges” comes at a time where government resource revenue is down from 32 per cent of the total revenue in 2008-09, to 10 per cent for this year.

Taxation is also down by over $200 million, as the government faces an exceedingly tough economic climate.

“We have to make some tough decisions, ” said Finance minister Kevin Doherty in today's pre-budget press conference. “This budget sets our course, our plan for returning to balance, and keeping Saskatchewan’s economy strong for the 1,155,000 people who now call this great province home.”

Here’s the plan.

The Saskatchewan government has proposed to eliminate the $1.3 billion deficit within three years, with a $300 million “contingency allowance” for unforeseen economic fluctuations.

The government forecasts a deficit of $685 million for this year, a deficit of $304 million projected for 2018-19, and a surplus of $15 million by 2019-20. The deficit will be solved via a series of cut-backs and efficiencies, as well as expansions to the current provincial sales tax structure.

The PST expansion will come in the form of a one per cent increase, from five to six per cent, and will take effect at midnight, March 22. The expansion will also eliminate PST exemptions on certain products. Children’s clothing, restaurant meals and snack food, insurance premiums, vehicle trade-in allowances, real property contracts, and permanently mounted equipment in the oil sector will now be subject to the PST charge. According to the budget, this tax expansion will add an estimated $871.6 million in revenue.

To soften the increase in PST, a $34 million enhancement to the Saskatchewan low-income tax credit has also been implemented, potentially decreasing the amount of income tax paid by low income citizens. The enhancement will see an annual increase of $100 for adults, and $40 for children.

Other tax expansions

The tobacco tax will increase by two per cent per cigarette, effective March 23. According to the budget, this will add an estimated $13 million in revenue. Liquor prices will also be rising. The increase will see wholesale mark-up rates on alcohol increase by between six and four per cent, effective April 1. This markup will add an estimated $5 million in revenue.

The tax exemption for the bulk purchase of gasoline is being eliminated, and the exemption for bulk purchases of diesel fuel is being reduced by 80 per cent. The province says these cuts are being made to adapt to the changing nature of farming.

The Corporation Capital Tax rate on large financial institutions will increase from 3.25 to four per cent, effective April 12. This increase will add an estimated $13 million in revenue. This tax increases for large businesses runs contrary to the half percent decrease in the general Corporation Income Tax rate, saving small businesses as estimated $25 million dollars. The government of Saskatchewan will also continue to bolster its manufacturing sector, offering new tax incentives, and the lowest tax rate on manufacturing and processing in the country.

Major spending reductions

The provincial government made a series of cutbacks prior to the release of the budget. Two hundred and thirty unionized cleaners, three gaming workers, and nine air travel workers were laid off, along with the cancellation of the government’s Executive Air Service. The resulting savings totalled $4.8 million.

The cutbacks continue in the budget, as the government announces the winding down of the Saskatchewan Transport Company, at a savings of $85 million over the next five years. The province also intends to sell the Saskatchewan Grain Car Corporation and its fleet of 900 railway cars. Despite the winding down of the STC, a company protected by the Crown Corporations Act, the budget made no comment into the future ownership of the main Crown corporations, particularly SaskPower, SaskEnergy, SaskTel.

The budget will discontinue SaskPower and SaskEnergy’s payments to municipalities, resulting in a government savings of $36 million.

The Saskatchewan Grant for Education Savings will be suspended, effective Jan. 1, 2018. As part of the educational spending restraint all post secondary institutions will receive five per cent decrease in base operational funding, for a total savings of $130.1 million. Saskatchewan libraries will also receive a cut of $4.8 million in funding. These cuts represent $2.02 billion in education funding that is down $145.8 million or 6.7 per cent from last year.

NDP Finance critic Cathy Sproule was quick to dissaprove of the Saskatchewan government’s new budget proposal.

“It’s a failure and its exploding out of control,” said Sproule. “Cutbacks and $900 million in tax increases are not what Saskatchewan needs right now.”

The Government of Saskatchewan remains adament that they will have a balanced budget within the next three years.