Nobody should be surprised the provincial sales tax (PST) in Saskatchewan is going to increase from five per cent to six per cent.
The provincial government is staring a steep deficit in the face, and revenues need to come from somewhere. The easiest way is to hike the PST.
And while the increase might seem small – you have to spend $100 on goods and services to create an extra $1 in PST – it becomes a significant amount when you add up all of your taxable expenses at the end of the year.
Coupled with the increase is the end of the PST exemptions on such expenses as children’s clothes, restaurant meals and snack foods. Restaurant meals will likely draw the largest vitriol from the public.
When the idea of enforcing the PST on restaurant meals was last brought up in 2004, there was a significant outcry, resulting in a petition that generated over 100,000 signatures. The New Democratic Party (NDP) government backtracked from the decision.
It’s likely the last time a petition campaign in Saskatchewan actually worked.
The Saskatchewan Party was in opposition in 2004 when the NDP increased the PST from six per cent to seven per cent. They ripped the decision. They also criticized the NDP for considering the PST on restaurant meals.
The NDP roasted the Sask. Party for increasing the PST.
It’s always interesting to see how reactions differ in partisan politics when the shoe is on the other foot.
Many people in Saskatchewan will not feel a big impact from the PST increase. They might conserve their money a little more and delay a few non-essential purchases.
It will be tough for those in low income brackets, or those on fixed incomes. For many of them, every dollar counts, and the cumulative impact of a higher PST will hurt.
Some will scoff and say these people will just have to watch their expenses, but many low-income people are already diligent with their expenses.
The PST on children’s clothes and restaurant meals will be tough on those businesses. In the case of the clothing, it often is an essential expense. Parents need to buy clothes for their kids. But those non-essential purchases (an extra pair of shoes or a couple of extra shirts) might not happen, and retailers will feel the pinch.
As for restaurant meals, those who enjoy eating out, and view it as an essential part of their lifestyle, will continue to frequent restaurants, and order the food and beverage of their choice. For those who view eating out as a luxury or a nice occasional outing, they might cut back on their restaurant meals.
For low-income earners, they will find it even more difficult to go out for a meal.
And so the restaurant industry will suffer, and there could be job losses as a result.
