2014-2015 Saskatchewan budget highlights
Canadian tax alert
March 19, 2014
Read a summary of the Saskatchewan budget highlights from Deloitte's tax professionals.
Saskatchewan Finance Minister Ken Krawetz presented the 2014-2015 Saskatchewan budget this afternoon. The government made a significant change in its reporting by presenting a summary budget for all government entities, (both business enterprises such as Crown corporations, and service organizations such as ministries, health regions and boards of education). In prior years, the focus of the budget was on core operations reported through the General Revenue Fund. The budget projects a surplus of $71 million for 2014-2015. Although revenues are projected to decrease by 0.7% from the 2013-2014 budget, a small surplus was maintained through controlled spending as no changes were made to corporate tax, personal tax or sales tax rates. The following is a summary of the highlights contained in the budget.
Economic results and indicators
- Saskatchewan’s real GDP is forecasted to grow by 2.2% in 2014 and 2.3% in 2015. This is less than the 4.1% increase expected in 2013, due mainly to the assumption of a return to a more normal size crop in 2014 (Saskatchewan farmers produced the largest crop in the province’s history in 2013). These growth rates are expected to be among the strongest in the country in 2014 and 2015.
- Revenue forecast for 2014-2015 is $14.07 billion, down 0.7% from 2013-2014. Expenses are forecasted to be $14.0 billion, down 0.2% from 2013-2014, resulting in a surplus of $71 million.
- Saskatchewan’s debt to GDP ratio is forecasted to be 14.2% by March 31, 2015, which is down 29% from 2007-2008.
- Saskatchewan’s population grew by 1.8% in 2013, the second highest in Canada. Employment grew by 3.4% in 2013, the highest in Canada. Continued gains in population and employment, combined with continued strength in business investment (particularly in mining), an anticipated pick-up in the global economy, softer Canadian dollar and low interest rates are all expected to support the economy in 2014 and 2015.
Personal and corporate tax rates
- There were no changes announced in the budget to personal or corporate tax rates.
- For 2014, Saskatchewan has adjusted its dividend tax credit so that the combined highest rate on Saskatchewan non-eligible dividends will be 34.91%, which is down from the anticipated rate of 35.32% which would have resulted from changes in last year's federal budget.
Other tax measures
- There was no increase to the education component of property taxes, as had been speculated.
- The government also chose to maintain the current provincial tax provisions for credit unions, including the special income tax reduction and the exemption from paying the provincial capital tax.
Sales tax measures
- There were no changes to provincial sales tax.
- An $8 million decrease in the Ethanol Fuel Grant Program.
- A streamlining of licensing fees into a single new oil and gas well levy which will require that the industry pay 90% of the cost of the government’s regulatory oversight.
- An emphasis on infrastructure projects including:
- $2.0 billion projected to be spent on Crown Corporation capital projects including: new electricity generation projects and transmission and distribution systems; expansion of the wireless network and fibre optic infiNet project; upgrade and renewal of Sask Energy infrastructure and expansion of pipeline and compressor capacity.
- An increase of $88.5 million in funding for highway and transportation infrastructure.
- An increase in direct funding for municipalities of 9.1%, although the municipal revenue sharing will drop by 2.8%.
- A 4.7% increase in infrastructure funding for construction of schools, hospitals and transportation systems.
- $50 million allocated to building a new stadium in Regina - the future home of the 2013 Grey Cup champion Saskatchewan Roughriders.
For further details, we refer you to the Ministry of Finance website.
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