The Government of Saskatchewan tabled its 2020/21 budget in the Legislative Assembly today. The budget was originally supposed to be delivered and tabled by Minister of Finance, the Hon. Donna Harpauer, on March 18th. However, because of the Covid-19 pandemic, the Legislature was abruptly adjourned after the Minister released the government’s spending estimates instead of delivering a full budget. The Minister said at that time there was too much volatility and instability with respect to revenues to give a realistic forecast and more time was needed to get a better assessment of the impact of the pandemic on the province’s economy and government revenues.
On March 18th, the Minister said that the government would spend $14.2 billion through government Ministries, Agencies and Third Parties. In the budget tabled today, the government announced that it would spend an additional $1.9 billion for a total of $16.1 billion in expenditures for this fiscal year. With forecasted revenues of $13.6 billion, the province is now expecting a deficit of $2.4 billion. It was expected to have tabled a Balanced budget back on March 18th, but that plan was shelved when the global pandemic and plunging oil prices coincided earlier this year.
“This is a pandemic deficit, not a structural deficit,” said Harpauer. “Prior to the pandemic, Saskatchewan was on track for balanced budgets last year and this year, and I am confident that as Saskatchewan’s economy recovers, our revenues will also recover and we will get back to balance in the coming years without having to cut programs and services.”
Healthcare, Education and Social Services received the largest increases in their annual operating budgets within this spending plan. As well, the government announced a massive $7.5 billion capital and maintenance spending plan over the next 2 years to assist with stimulating the economy in everything from new health and education facilities, to new highways and roads, investment in power and telecommunications infrastructure, and municipal capital projects. There are no tax increases in this budget. Some new initiatives announced in today’s budget, include:
Re-introduction of full indexation of the Personal Income Tax system beginning in the 2021 tax year, protecting taxpayers from “bracket creep” because of inflation;
A Provincial Sales Tax (PST) rebate for new residential home construction of up to 42 percent of the PST paid on a new house up to $350,000 for new homes purchased after March 31, 2020 and April 1, 2023 (excluding land costs);
The Oil Infrastructure Program, a SaskFirst new growth tax incentive administered by the Ministry of Energy and Resources to support new and expanded pipelines and new pipeline terminals; and,
A new Saskatchewan Chemical Fertilizer Incentive that provides a 15% tax credit to encourage new investment to grow this value-added sector.
The budget is expected to pass at the conclusion of this truncated 3 week Legislative session that will conclude July 3rd. This will be the last legislative sitting (barring an emergency or unforeseen circumstances) before a provincial election is held on October 26th. Please see the links below for additional information related to the 2020/2021 Saskatchewan budget.
If you have any questions please contact Kevin Doherty, Managing Director – Saskatchewan at email@example.com.