Released on March 18, 2015
The 2015-16 Budget will help keep Saskatchewan’s economy strong by promoting responsible development of the province’s resource wealth, encouraging new investment and job creation and ensuring a sustainable, competitive business environment.“This year’s budget will keep Saskatchewan’s economy strong by building on our reputation as a stable destination for investment,” Economy Minister Bill Boyd said. “A recent report showed Saskatchewan is the most attractive jurisdiction for mining in Canada and second most attractive worldwide. Major oil producers have signaled confidence in our economy through planned capital investments and exploration in the north continues to grow.”
Effective January 1, 2015, the province is changing the way in which potash companies can claim capital expenditures as tax deductions. All capital expenditures will continue to accrue at the rate of 120 per cent but the rates at which capital expenditures are deductible from annual gross sales revenues will be reduced.
It is expected that deferring these deductions will increase provincial potash revenues by $150 million this year. This measure is an interim step that will be followed by a broader review of the entire potash taxation regime. The review process will gather input from sector stakeholders. Coupled with growth and strength in the potash industry, total potash revenues are expected to be up nearly $400 million over last year’s budget.
“The potash taxation framework has been very effective for both Saskatchewan and the producing industry for over a decade,” Economy Minister Bill Boyd said. “Both the industry and mine capacity has evolved over the past several years, resulting in a need to review this regime with a goal of simplification and modernization. Careful consideration will be given in order to maintain Saskatchewan’s excellent investment and operational environment.”
In 2014-15, the province collected $16.7 million from the oil and gas industry through a well levy to expand efforts to regulate and monitor development in the industry and keep pace with growth.
In 2015-16, the well levy will increase to $20 million. In 2015, the ministry will launch enhanced regulatory, environmental and safety compliance systems for the oil and gas sector, including:
- $2.2 million to expand regulatory oversight and enforcement to ensure Saskatchewan’s regulatory services and systems in the oil and gas sector keep pace with sector growth; and
- $3.4 million to complete the Process Renewal Infrastructure Management Enhancement (PRIME) group of projects designed to modernize Saskatchewan’s oil and gas information systems including funding for ongoing operations of the Integrated Resource Information System (IRIS) system.
The 2015-16 Budget also introduces two new tax incentives for job creation and capital investment. The new Manufacturing and Processing Exporter Tax Incentive will provide tax credits to eligible corporations that increase their number of full-time employees as well as tax credits to eligible companies that increase their number of head office jobs.
A second new incentive will provide an income tax rebate to eligible primary steel producers that make a minimum investment of $100 million in new or expanded productive capacity. As these incentives only apply on new job creation and investment, they will not impact existing government revenues.
“Oil prices have impacted government revenues,” Boyd said. “Increased revenues from potash expansions, as well as our government’s solid track record of fiscal management and ability to manage spending will help us face these challenges.”
The Small Business Loans Association program will be terminated, saving $750,000 dollars this year. While new loans will not be offered, the government will continue to manage existing loans according to their original terms.
Participation in the program has declined by more than 67 per cent in the last ten years as the improved economic climate in Saskatchewan and low interest rates are more conducive to business financing.
Other notable changes in Economy’s 2015-16 Budget include:
- $8.0 million reduction from 2014, resulting from the final year of the Ethanol Fuel Tax Rebate, which officially ends March 31, 2015;
- $500,000 reduction to the Renewable Diesel Program due to underutilization;
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For more information, contact:
Deb Young
Economy
Regina
Phone: 306-787-4765
Email: deb.young@gov.sk.ca