By Greg Nikkel
Weyburn’s MLA Dustin Duncan made no apologies as the provincial government handed down a tough budget on Wednesday, with a number of reductions and cuts made in the document outlining government spending for the next year.
“As the finance minister said, this was a pretty challenging budget. We knew we were facing a hard time as resource revenue is down by $1 billion from a couple of years ago,” said Duncan, pointing out there was some good news for Weyburn.
He noted that planning funds were provided for work to begin on a new elementary school in Weyburn, “so we’re finally going to be moving ahead with the elementary consolidation project.”
The planning is for a new school which will be built on the site of the vacant Weyburn Junior High school building on Fifth Street. Once built, this school will then take on the students from Queen Elizabeth and Haig Schools, and those two schools will be closed.
“We’ll be the first to say this was a difficult budget,” said Duncan, who is also the Energy and Resources minister. “We don’t get into politics to raise taxes.”
Duncan noted the government has had to pull back in a few areas during this tough economic year, with funding either cut in some cases, or “suspended” in others where the funding cut is intended to be temporary. An example of a suspension of support is the Rink Affordability program for municipalities, which helped municipalities with the power bills for hockey and curling rinks.
Some cuts have been hinted at in the budget, but the City of Weyburn hasn’t had many hard-and-fast numbers provided yet, said Mayor Marcel Roy, such as how much funding the city could lose if grants-in-lieu are not paid by Crown corporations such as SaskEnergy and SaskPower on their properties, or exactly how much money the Southeast Regional Library will need to keep operating after a reduction of 58 per cent in the budget.
The Weyburn Chamber of Commerce works alongside the Saskatchewan Chamber to assess the budget on a number of benchmarks to help ensure that all governments are making sound financial decisions based on growing and securing a prosperous economy.
First, the chamber felt a positive announcement in this budget is that the corporate tax rate will drop by 0.5 per cent to 11.5 per cent on July 1, 2017, and another 0.5 per cent to 11 per cent in July of 2019.
“The Saskatchewan Chamber has advocated that the provincial government reduce the corporate tax rate to nine per cent, so we see this as a step in the right direction,” said Twila Walkeden, executive eirector of the Weyburn Chamber.
Since roads and highways are of concern to businesses in all areas of the province, the Weyburn Chamber was relieved to know that roads and highways funding will remain nearly the same as last year. “Quality infrastructure is key to maintaining a prosperous economy,” commented Walkeden.
One of the largest impact to consumers and businesses was the increase of the PST from five to six per cent, and the elimination of some PST exemptions, such as for children’s clothing and restaurant meals.
“While we don’t generally applaud tax increases, we do agree that increasing consumption-based taxes like PST is preferable to increasing property tax or personal income tax,” said Walkeden. “On the other hand the change in PST may increase the cost of doing business for our local businesses, in particular the construction and restaurant sectors, resulting in reduced competitiveness.”
The Weyburn Chamber of Commerce is confident in the government’s objective to eliminate the provincial deficit by 2019. “For now we will continue to send the word that Weyburn is a great place to live, work and invest,” said Walkeden.
The increase to the PST is a move away from taxing capital and income to taxing consumption, said MLA Duncan, and removing some of the exemptions will be part of a longer-term shift rather than a suspension or temporary measure.
He noted to offset the impact on those on a lower income, there was a corresponding increase to the low income tax credit “that will hopefully help them out.”
The government also lowered the income tax rate by a half-point, said the MLA, so the overall impact of the increased PST with higher low income credit will still be a small tax rate than was being paid in 2007, plus about 100,000 people on a lower income no longer pay income tax as they did in 2007-08.
One of the tough decisions is to wind down the STC bus system in Saskatchewan, said Duncan, noting that the STC staff “tried so hard to make it a more viable operation” with seat sales and better advertising, but there were only one or two routes out of the slate of 37 routes that made any money.
In addition, the subsidy per passenger used to be around $25 per person, and now the subsidy is closer to $100 per passenger, and the projection over the next five years is for the bus lines to have a deficit of $85-100 million “just to keep operating”.
Duncan noted that as tough as this budget is in Saskatchewan, it’s quite different from the picture in Alberta where they’re looking at a $10-billion deficit this year.
