Saskatchewan will be working on a deficit budget and will see tax increases as a result.
Finance Minister Kevin Doherty announced in Legislature March 22 Saskatchewan will be operating on a deficit budget for the next three years.
“We recognize to go to a balanced budget in one year will be too much of a shock,” Doherty said.
The Saskatchewan Government plans to have the budget balanced by 2021.
To get the budget back to being balanced, the government increased the provincial sales tax (PST).
“It is more than a budget, it is a plan for our province,” said Premier Brad Wall at Legislation.
As of midnight March 22 the PST was increased to six per cent.
“We will be expanding our tax base to work towards a balanced budget,” Doherty said.
Not only was it increased but it will now apply to restaurant meals, children’s clothing and power bills.
Insurance premiums and construction services will also be affected by the tax increase.
“I acknowledge it will put some pressure on families, I acknowledge that,” Doherty said when asked about removing the tax exemption for children’s clothes.
Items like groceries and prescription drugs will still be exempt.
“The reality is for the lower income individuals and families in the province we’re increasing the Saskatchewan low income tax credit to help offset some of those additional taxes,” he said.
Along with government officials taking nine unpaid days off, or a reduction of 3.5 per cent on their pay cheques, the government is also making cuts in other places.
“We had to reduce in some places and in other eliminate entirty,” said Dorhety.
The government-owned bus company Saskatchewan Transit Company (STC) has been eliminated from the budget.
Doherty says it will save the government an estimated $85 million over the next five years.
Government used air service has also been be reduced. Government will be winding down the use of Executive Air, which officials use to travel across the province.
Libraries across the province will also see reductions.
Regional libraries, will be reduced by $3.5 million.
Pre-kindergarten to Grade 12 schools will see a reduction in the budget as well. The 2017-18 budget has approved $3.6 million to be allocated to schools in the province.
A big issue for the Saskatchewan Government going into budget day was the possibility of changing the school boards.
“We have decided in favour of the panel’s decision,” said Doherty.
The panel listened to the people of the province and its school boards.
There will be no change in the current school board boundaries. The election of trustees will also continue.
The government will make amendments to the Education Act in the coming weeks to abide by the panel’s decision.
Doherty also said post-secondary institutions will be reduced in the budget by $5 million.
Various tax credits — including for education and tuition expenses — are being eliminated.
“We are facing a challenge, today’s budget is about meeting that challenge,” said Doherty.
Doherty also said the Saskatchewan Government needs to move away from its $1.3 billion dependancy on resources. However, he gave no indication or alternative to fill the hole made by the decline in oil and gas.