Released on March 29, 2000
Finance Minister Eric Cline has brought down the biggest income tax cut inSaskatchewan history.
The 2000-01 Budget is highlighted by sweeping tax reforms, new investments in
health care and plans for system renewal, reduced property and fuel taxes for
farmers, and major investments in education, highways and infrastructure.
TAX REFORM HIGHLIGHTS
"Saskatchewan people told us that lower taxes must be part of a plan to support
job creation and greater prosperity in our province," Cline said. "But the
plan must be balanced. Tax cuts must not come at the expense of important
public services, like health care, and must not result in deficits."
A simple, three rate "tax-on-income" structure will be introduced January 1,
2001. Lower income tax rates and higher personal tax credits will be phased in
over three years.
When fully implemented in 2003, tax reform will mean:
an average family of four will save about $1,000 a year in total taxes;
about 70 per cent of Saskatchewan people will pay the same income tax
rate as Albertans; and
55,500 low income Saskatchewan residents will no longer pay provincial
income taxes.
Once fully implemented, the new system will be fully indexed to inflation,
eliminating "bracket creep".
By 2003, the new "tax-on-income" rates will be lowered to:
11 per cent on taxable income up to $35,000;
13 per cent on taxable income between $35,000 and $100,000; and
15 per cent on taxable income over $100,000.
Saskatchewan residents will also qualify for:
a basic tax credit of $8,000;
a spousal or equivalent-to-spouse tax credit of $8,000;
a child tax credit of $2,500 for each dependent child; and
a $1,000 supplement to the existing senior's tax credit.
Taxable capital gains of farmers and small business owners will be taxed at the
lowest provincial income tax rate beginning in 2001.
To make the system fair for low income earners, a new Saskatchewan Sales Tax
Credit will be introduced effective April 1, 2000. The new credit will provide
a tax rebate to lower income families of up to $264 a year, with all families
earning up to $35,000 receiving benefits.
The sales tax rate will remain at six per cent, the lowest rate in Canada, but
effective midnight Budget night, will be expanded to items taxed in other
provinces. Family necessities such as home heating, electricity, prescription
drugs and children's clothing will not be subject to provincial sales tax.
Restaurant meals will continue to be exempt.
As part of this reform, effective midnight, Budget night, the provincial sales
tax will apply to purchases made off reserve by First Nations people.
The reform of Saskatchewan's income and sales taxes will provide provincial
residents with an overall tax reduction of about $260 million when fully
implemented. This tax cut includes a $440 million reduction in Saskatchewan's
income taxes, the largest income tax reduction in the province's history.
For 2000, taxpayers will see the Saskatchewan flat tax reduced from two per
cent to one per cent beginning July 1, 2000.
The remaining reforms to the income tax system will begin on January 1, 2001,
and be fully implemented January 1, 2003.
HEALTH HIGHLIGHTS
Saskatchewan's health care system will receive an additional $63 million in
base funding and $150 million for a Health Transition Fund to make the system
sustainable in the years ahead.
The Minister of Health will soon announce a process to develop a plan for
sustainable and effective health care for the 21st century.
AGRICULTURE HIGHLIGHTS
Farmers will pay no farm fuel tax and will receive a two year property tax
rebate:
a two year program worth $25 million a year will rebate property tax on
farmland; and
the limit on the gasoline tax rebate has been removed - there will be
no tax on farm fuel.
HIGHWAYS HIGHLIGHTS
A record $250 million will be invested in highway construction and maintenance
this year - an increase of $15.4 million over last year, and of almost $82
million from 1995/96.
EDUCATION AND RESEARCH HIGHLIGHTS
$18.5 million more for school boards and $29.2 million for K-12
education capital projects.
$27 million for post-secondary education and skills training - up six
per cent.
A $350 income tax benefit for post-secondary graduates who start work
in Saskatchewan.
A new $10 million Innovation and Science Fund that will attract an
investment pool of up to $100 million over four years.
CENTENARY CAPITAL FUND
A new $120 million Centenary Capital Fund has been created to prepare
Saskatchewan for its second century.
It will provide support for important projects related to schools,
universities, SIAST and regional colleges, municipal infrastructure, roads,
highways, environmental clean-up, social housing, parks and heritage
properties. Five million dollars a year will go to support critical
infrastructure needs in the North.
The 2000-01 Budget is the seventh consecutive balanced budget. The total
provincial debt will be just over $11 billion or 38 per cent of gross domestic
product (GDP) at March 31, 2000, falling to 31 per cent of GDP by 2004.
"We have challenges ahead," Cline said. "But, more importantly, we have
opportunities. This Government will face both with determination and
leadership to take Saskatchewan into a new era of growth and prosperity,
building a stronger Saskatchewan for us and our children."
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For more information, contact:
Sandra Lodoen
Finance
Regina
Phone: (306) 787-6578