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  • CCPA in Europe for CETA speaking tour October 17, 2017
    On September 21, Canada and the European Union announced that the Comprehensive Economic and Trade Agreement (CETA), a controversial NAFTA-plus free trade deal initiated by the Harper government and signed by Prime Minister Trudeau in 2016, was now provisionally in force. In Europe, however, more than 20 countries have yet to officially ratify the deal, […]
    Canadian Centre for Policy Alternatives
  • Twelve year study of an inner-city neighbourhood October 12, 2017
    What does twelve years of community organizing look like for a North End Winnipeg neighbourhood?  Jessica Leigh survey's those years with the Dufferin community from a community development lens.  Read full report.
    Canadian Centre for Policy Alternatives
  • Losing your ID - even harder to recover when you have limited resources! October 10, 2017
    Ellen Smirl researched the barriers experienced by low-income Manitobans when faced with trying to replace lost, stolen, or never aquired idenfication forms. Read full report here.  
    Canadian Centre for Policy Alternatives
  • CCPA recommendations for a better North American trade model October 6, 2017
    The all-party House of Commons trade committee is consulting Canadians on their priorities for bilateral and trilateral North American trade in light of the current renegotiation of NAFTA. In the CCPA’s submission to this process, Scott Sinclair, Stuart Trew, and Hadrian Mertins-Kirkwood argue for a different kind of trading relationship that is inclusive, transformative, and […]
    Canadian Centre for Policy Alternatives
  • Ontario’s fair wage policy needs to be refreshed September 28, 2017
    The Ontario government is consulting on ways to modernize the province’s fair wage policy, which sets standards for wages and working conditions for government contract workers such as building cleaners, security guards, building trades and construction workers. The fair wage policy hasn’t been updated since 1995, but the labour market has changed dramatically since then. […]
    Canadian Centre for Policy Alternatives
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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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