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  • CCPA's National Office has moved! May 11, 2018
      The week of May 1st, the Canadian Centre for Policy Alternatives' National Office moved to 141 Laurier Ave W, Suite 1000, Ottawa ON, K1P 5J2. Please note that our phone, fax and general e-mail will remain the same: Telephone: 613-563-1341 | Fax: 613-233-1458 | Email: ccpa@policyalternatives.ca  
    Canadian Centre for Policy Alternatives
  • What are Canada’s energy options in a carbon-constrained world? May 1, 2018
    Canada faces some very difficult choices in maintaining energy security while meeting emissions reduction targets.  A new study by veteran earth scientist David Hughes—published through the Corporate Mapping Project, the Canadian Centre for Policy Alternatives and the Parkland Institute—is a comprehensive assessment of Canada’s energy systems in light of the need to maintain energy security and […]
    Canadian Centre for Policy Alternatives
  • The 2018 Living Wage for Metro Vancouver April 25, 2018
    The cost of raising a family in British Columbia increased slightly from 2017 to 2018. A $20.91 hourly wage is needed to cover the costs of raising a family in Metro Vancouver, up from $20.61 per hour in 2017 due to soaring housing costs. This is the hourly wage that two working parents with two young children […]
    Canadian Centre for Policy Alternatives
  • Mobility pricing must be fair and equitable for all April 12, 2018
    As Metro Vancouver’s population has grown, so have its traffic congestion problems. Whether it’s a long wait to cross a bridge or get on a bus, everyone can relate to the additional time and stress caused by a transportation system under strain. Mobility pricing is seen as a solution to Metro Vancouver’s transportation challenges with […]
    Canadian Centre for Policy Alternatives
  • Budget 2018: The Most Disappointing Budget Ever March 14, 2018
    Premier Pallister’s Trump-esque statement that budget 2018 was going to be the “best budget ever” has fallen a bit flat. Instead of a bold plan to deal with climate change, poverty and our crumbling infrastructure, we are presented with two alarmist scenarios to justify further tax cuts and a lack of decisive action: the recent […]
    Canadian Centre for Policy Alternatives
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The Progressive Economics Forum

SK Budget: Where’s the Inter-governmental Love?

A hallmark of Brad Wall’s premiership has been cosy relations with municipal governments and the two westernmost provincial governments. Since taking office, the Sask. Party has been throwing money at municipalities. It pledged not to sign the Trade, Investment and Labour Mobility Agreement with Alberta and BC, but then did so through the New West Partnership.

A couple of tax changes from the recent Saskatchewan budget are worth examining through this prism of intergovernmental relations. Much has already been written about Wall’s bizarre decision to axe the Film Employment Tax Credit and partial climb-down.

Despite the inconsistency of zeroing in on this one relatively inexpensive measure amid the province’s myriad of other tax expenditures and business subsidies, the Sask. Party had a point. The main rationale for continuing the Film Employment Tax Credit is that every other competing jurisdiction offers similar credits.

The Sask. Party may well be correct that the world would be a better place if all jurisdictions dropped their subsidies and film locations were chosen based on factors other than tax preferences. That’s hardly an argument for unilateral disarmament, but it could have been an argument for intergovernmental cooperation.

If Wall was willing to eliminate Saskatchewan’s Film Employment Tax Credit and keen to cooperate with neighbouring jurisdictions, why didn’t he first try to negotiate a simultaneous withdrawal of their film tax credits? He could at least have thrown down the gauntlet.

If the New West Partnership is to serve any sensible purpose, surely it is to prevent member provinces from using preferential policies to poach economic activity away from each other. On the contrary, my impression is that the Alberta and BC governments have already begun luring movie production out of Saskatchewan.

The other tax change is a matter of accounting. The Saskatchewan Low-Income Tax Credit, like the federal GST/HST credit, rebates about $80 million annually through the income tax system to compensate the poor for the regressive provincial sales tax (PST).

The Saskatchewan government will start subtracting this credit from reported PST revenue rather than from reported income tax revenue (see page 37 in the Budget Summary). As a result, PST is the only major source of tax revenue projected to drop in 2012-13 from 2011-12 (page 76).

Interestingly, Wall’s much-vaunted Municipal Revenue Sharing is calculated as one-fifth (one point out of five) of officially reported PST revenue. This year’s amount is based on the 2010-11 Public Accounts (page 19). Taking $80 million out of 2012-13 PST revenue implies taking $16 million (i.e. one-fifth of $80 million) out of revenue sharing, but not until 2014-15.

Political columnist Murray Mandryk suggests, “What [municipal leaders] might have missed is the move by government to deduct the low-income tax credit from the PST, which might result in municipalities foregoing $16 million from next year’s revenue-sharing pool.” The timing is such that they will take this hit shortly before the next provincial election, unless Wall orchestrates a delay as he has with the Film Employment Tax Credit.

Stay tuned for a post on the Saskatchewan budget’s corporate tax rebate for new rental accommodation . . .

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