On April 6th, the provincial government delivered the 2021 Saskatchewan Budget. CFIB pushed hard to ensure this Budget would provide help so Saskatchewan’s businesses and economy can recover.
2021 Saskatchewan Budget Highlights:
Cost relief for businesses:
The provincial government is continuing or moving forward with previously committed tax relief and programming changes to help lower some costs for businesses and residents:
- The Small Business Corporate Income Tax rate is lowered to 0% until July 1, 2022. The rate will then move to 1% and later to 2% on July 1, 2023.
- The Saskatchewan Economic Recovery Rebate will continue until the end of November 2021. This provides a 10% rebate of electricity costs for all SaskPower customers.
- The Saskatchewan Technology Start-up Incentive (STSI) has also been extended for five years. The STSI encourages investment in early-stage technology startups that bring new products to market and create jobs in the province with a non-refundable 45% tax credit to Saskatchewan-based investors.
The province will implement two rebate incentives that were previously announced, but should indirectly help some businesses:
- The Active Families Benefit is being launched again. It provides a non-refundable tax credit of $150 per year per child to eligible families who enroll their children in sports, arts and cultural activities.
- The Saskatchewan Home Renovation Tax Credit can save homeowners up to $1,155 in province income taxes by claiming a 10.5% tax credit on (up to) $11,000 of home renovation expenses incurred between October 1, 2020 and December 31, 2021. A further $945 in savings may be claimed next year for expenses from 2022.
Deficits and spending:
- The 2021-22 deficit forecast is $2.61 billion. The government also announced that it will now take longer to return to balanced budgets (the new target is 2026-2027).
- The Q3 update from the 2020-21 deficit forecast decreased by about $180 million to $1.86 billion.
- The province remains on track to make significant capital investments over two years ($2.0 billion in stimulus funding that has been allocated for hospitals, schools, highways and other important projects that will support our province's economic recovery). This funding was previously announced.
- Capital investments also include $520 million for dozens of highway projects across the province.
- Despite these significant deficits, Saskatchewan will still have the lowest (forecasted) debt-to-GDP ratio of any province.
Other noteworthy takeaways:
There were no new or expanded business support programs announced in the Budget aside from the cost relief measures previously mentioned.
This Budget includes two tax changes that the government says will improve tax fairness:
- vapour (vaping) products and heat-not-burn tobacco products will be taxed at 20 per cent;
- electric vehicles will now pay registration fees ($150 annually) to contribute to road maintenance and replacement (fossil fuel vehicles already pay at the pump).
CFIB’s 2021-22 pre-budget recommendations:
We worked hard to make sure your priorities were the focus of Saskatchewan’s 2021-2022 Budget. On December 4th, CFIB met with Saskatchewan's Deputy Premier and Minister of Finance, Hon. Donna Harpauer, to share our latest research and members’ priorities for the upcoming Budget. We also met with Premier Scott Moe on January 14th to share the same presentation.
Priority #1 – Continue providing relief to help recovery
- Deliver immediate provincial relief measures for small businesses to help speed Saskatchewan’s economic recovery such as:
- Continue providing grants for businesses to cover COVID-19 related costs and/or losses as needed as restrictions continue;
- Continue rejecting any proposals to provide increased taxation powers for municipalities (e.g. fuel, income or sales tax);
- Continue to aggressively oppose planned federal carbon tax increases, as well as any EI premium increases for the next 4 years;
- Continue calling for the deferral of future CPP increases.
Recommendations acted upon since meeting on December 4th:
- Renewed the Saskatchewan Small Business Emergency Payment (SSBEP) program (for businesses restricted in December, January, February, March, April*);
- Launched the Saskatchewan Strong Recovery Adaptation Rebate (SRAR) to help businesses cover costs related to COVID-19 compliance and prevention;
- Extended the Re-Open Saskatchewan Training Subsidy (RSTS) application deadline to March 31, 2021;
- Renewed the Saskatchewan Tourism Sector Support Program (STSSP).
Priority #2 – Spend sustainably and focus on capacity building
- Limit annual spending increases to rate of GDP growth;
- Reduce the size of Executive government through workforce attrition by another 5 per cent over next 4 years;
- Require Crown Corporations and non front-line components of Third Party entities to implement a 10 per cent reduction in their size through workforce attrition over the next four years;
- Narrow wages/benefits disparity (19%) between public & private sector staff for Executive government, Crown Corporations and major Third Party entities;
- Eliminate the banking of sick days in the public sector and introduce affordable short-term disability plans for public sector workers to better align sick leave provisions with those of the private sector. Currently, provincial government employees in BC, Alberta, Ontario and Nova Scotia cannot bank sick days;
- Reduce accrued employee leave entitlements and reduce the provisions of compensated absences in employment agreements and collective bargaining agreements in the future;
- Continue improving access to high-speed internet across SK;
- Increase annual spending on crime prevention across the province.
Priority #3 – Continue reducing red tape
- Reduce red tape with a focus on making it easier for small businesses to operate during restrictions and in the recovery;
- Focus on helping provide sector-specific relief, especially to those hardest-hit by the pandemic including in hospitality, arts and recreation, personal services, etc.;
- Ensure the mandatory regulatory review plans of Ministries, Agencies and Crown Corporations be driven by concerns raised by businesses;
- Encourage municipalities to reduce their regulatory burden on small business (e.g. adopting a Direct Cost Estimator and reducing time to obtain a commercial building permit to a maximum of 2 weeks);
- Through the Council of the Federation, work with other provincial, territorial and federal leaders to ensure the success of the CFTA and the reduction of inter-provincial trade barriers;
- Eliminate need for employers to apply for specific permit if employees want to observe a public holiday on a different day.