The provincial budget features a one per cent PST increase, removal of fuel exemptions for farmers, a 0.5 per cent income tax decrease, and cuts to items like post-secondary education, libraries and regional parks.
The budget, released March 22, will have $14.8 billion in expenses. It will raise $14.17 billion. There will be a $685 million deficit.
“It was no secret that this is going to be – and is – a tough budget where there has to be restraints,” said Donna Harpauer, the MLA for Humboldt-Watrous, adding that while population is up and jobs are going up, resource revenues from items like oil, potash and uranium are declining.
“The budget is a proposal. It’s year one of a plan to be back to balance in three years.”
Adam Duke, the Humboldt-Watrous NDP’s secretary, expressed displeasure with the budget.
“It’s an exceptionally deceitful budget,” said Duke, who was the NDP’s candidate in the last provincial election. “Their entire campaign was about how they weren’t going to raise taxes.”
“The one thing that I see them hiding behind is: there’s tough decisions to be made. Well, they’ve been in power for a decade and these tough decisions are due to their mismanagement. They didn’t save a dime from our boom.”
Increased taxes
The one per cent increase to the PST to six per cent was effective March 23, raising an estimated $242.1 million. On April 1, exemptions, including items like children’s clothing, restaurant meals, snack foods, insurance premiums and contracts for renovations on property, will be removed, raising $647.1 million.
“Built within [the budget] is a fundamental shift in taxation towards consumption and away from income and productivity,” Harpauer said, adding the goal is to diversify revenues away from resources while still encouraging investment.
Income taxes, both personal and corporate, will go down half a percentage point for all on July 1 and again on July 1, 2019. That will allow taxpayers to keep $82.2 million. An extra $34 million will be used to enhance the low-income tax credit by $100 per adult and $40 per child. Personal income tax indexation, which pegs tax brackets to inflation to ensure that taxpayers aren’t knocked into a higher tax bracket due to inflation, will be suspended.
“I don’t see the benefit there,” Duke said, “to give massive corporations huge tax breaks and going and telling people that are living on a fixed income, ‘you have to pay more PST, you have to pay PST on children’s clothing,’ all of these ways they’re nickel and diming.”
Fuel tax exemptions for bulk purchases of gasoline are eliminated and for diesel are reduced by 80 per cent of the purchase, effective April 1, raising $40.2 million.
The tobacco tax will go up two cents per cigarette, raising $10 million. Liquor will see price increases to raise $5 million.
City hit hard
Rob Muench, Humboldt’s mayor, said the budget will hit his city hard.
“The City of Humboldt will be hit with the equivalent of a 10 per cent municipal tax increase from all of the outfall from the provincial budget,” he wrote via email.
While the City will still receive $1.1 million from the revenue sharing program, it will no longer receive $477,000 in grants from SaskPower and SaskEnergy. Those grants are based on the usage of facilities within Humboldt’s boundaries.
Harpauer, who’s also the minister responsible for cities, said that formula didn’t reflect how the province gives other grants-in-lieu, by giving municipalities money for provincial facilities based on the assessment of the land it sits on.
“I am disappointed how unfair the elimination of the grants-in-lieu is,” Muench wrote. “Humboldt is losing what amounts to 49.3 per cent of its revenue [from the province], while Saskatoon is 26.29 per cent.
Harpauer acknowledged the impact on the city.
“This will be a challenge for Humboldt because there is the reduction in the grants-in-lieu for SaskPower and SaskEnergy and even though they still get the surtax from SaskPower and they get the municipal revenue sharing, it still is a reduction that they are then going to have to find how they are going to deal with that in their budget.”
The mayor said Humboldt hasn’t ruled out any options, whether it be tax hikes or program cuts, at this point.
“The way they’ve offloaded to municipalities,” Duke said, “is going to raise taxes for everyone – and people are already stretched exceptionally thin, especially seniors.”
Highway #5 getting passing lanes
A positive part of the budget for Humboldt involved Highway #5.
“We made that #5 from Saskatoon to Humboldt a priority for passing lanes,” said David Marit, the transportation minister.
At this point, the minister said he doesn’t know where the two passing lanes will be located or how much they will cost, though he expects they will be done this year.
Marit acknowledged that the narrowness of the highway was a problem, especially for emergency services.
“There’s no plan on the shoulder-widening at this time. We’re hoping through the passing lanes, that it’s going to alleviate a lot of the pressure, but right now, there’s no plans on widening the highway in general.”
Duke said he doesn’t think passing lanes are the best plan for the highway. His focus would be on widening.
“I’m never going to say no to investment on Highway #5 because there’s a need,” he said. “It needs wider shoulders throughout, from the area just west of St. Denis to the Bruno turn.”
Regional library gets 58 per cent cut
The Wapiti Regional Library is losing 58 per cent of its funding – around $400,000.
Cheryl Bauer Hyde, the chair of the regional library, said the cut is significant.
“Without warning, without consultation, without any sort of a transition plan, the government reduced the provincial funding to the Wapiti Regional Library by almost 60 per cent.”
Across the province, regional libraries are getting $2.5 million, a decrease of $3.5 million from last year. The Saskatoon and Regina municipal libraries will receive no funding.
“Everything’s on the table,” Bauer Hyde said. “This could result in closures of branch libraries because we don’t have the staff at the regional library to provide support. It could be a reduction of staff at the regional library. It’s already a small staff. There are only about eight people there.”
Harpauer said the province has to focus spending on its core services.
Horizon to lose $3 million
The Horizon School Division will be losing around $3 million in the next school year, a decrease of 3.7 per cent.
Kevin Garinger, the division’s director of education, said it’s tough to lose that amount.
“Our work then, is going to be on how we’re going to continue to look for efficiencies and be creative in the ways we can try and address those dollars.”
It will do that by looking at staffing levels and not replacing teachers that retire or resign. It will also co-operate more closely with other school divisions, purchasing in bulk and sharing services like payroll.
There will also be a hard look at school board member pay, professional development and expenses, which will be standardized across the province with an eye to save money.
On the positive side, the division also won’t face amalgamation with others. Garinger said he was pleased to see the elected, local board remain. Instead, the province is changing the Education Act to give the education minister more control over divisions and more funding will be earmarked for specific purposes.
Other cuts
The province will phase out services like the hearing aid plan, which will save $3 million; podiatry services, which will save $1.2 million; continuous positive airway pressure generators to help people with breathing problems, which will save $800,000; and low-cost orthotics, which will save $285,000. These will be transferred to the private market, with the government helping those with low incomes. Special care home fees will increase based on income, with around 50 per cent of residents expected to not be affected.
Funding for regional parks has been reduced by half. The Community Rink Affordability Grant has been suspended, saving $1.7 million.
Chiropractic services will no longer be covered for low-income safety net recipients starting July 1, 2017, which will save $1.25 million.
Post-secondary institutions will lose five per cent of their base operating funding, saving $30.1 million.
The Saskatchewan Transportation Corporation will close, with freight ending May 19 and passenger services ending May 31. The province said that the subsidy for each passenger has grown from $25, 10 years ago, to $94 today. It would cost $85 million to continue to operate for the next five years.
