2001-02 BUDGET CONNECTS SASKATCHEWAN PEOPLE TO THE FUTURE

Released on March 30, 2001

Finance Minister Eric Cline today introduced a plan that will allow the

province to connect to the future.



"This government has delivered on its commitment to provide a simple, fair

and competitive tax system - building the solid foundation we need for a

thriving economy and opening new opportunities for growth and prosperity,"

Cline said. "This budget builds on that progress, taking other major steps

forward for Saskatchewan in an exciting new direction."



The 2001-02 budget makes major investments in education, technology and

transportation. Also included are further reforms to personal income tax

and tax incentives to encourage small business growth in Saskatchewan.



The budget connects Saskatchewan people and communities to one another, to

new opportunities and to the future through new investments in information

technology.



"This budget makes the largest investment ever in education, the biggest

financial commitment to our highways and transportation system in the

province's history and spells out our innovative information technology

strategy," Premier Lorne Calvert said. "This budget reflects our common

values of creativity, co-operation, compassion and hard work in pursuit of

our shared vision of a prosperous Saskatchewan for all."



Taxation initiatives introduced in this year's budget also support

opportunity and growth.



The government has demonstrated its commitment to improving the general

climate for business development by:



reducing the small business corporation income tax rate from eight

per cent to six per cent, effective July 1, 2001;



increasing the annual income threshold for the application of the

small business rate, from $200,000 to $300,000, effective January

1, 2002; and



making it possible for all professionals to incorporate their

practices.



The tax measures which are being introduced in this year's budget build on

the plan for personal income tax reform which was introduced last year.

The government will:



increase the personal tax credit amounts for post-secondary

education and for persons with disabilities;



fully index personal tax credit amounts for seniors, persons with

disabilities, caregivers and medical expenses;



increase the new provincial tax credits for families with children

and for seniors in 2002; and



reduce personal income tax rates again in 2002.



"In 2001, Saskatchewan people will pay $317 million less in provincial

income tax than they did prior to tax reform," Cline said. "Tax reform,

when fully implemented, will result in an $868 annual tax saving for the

average, dual-income Saskatchewan family and $1,974 for a single income

family. Saskatchewan's top marginal income tax rate is now the second

lowest in Canada."



Other tax initiatives which are being introduced include:



a tax credit that encourages Saskatchewan residents to invest in

mineral exploration activity in the province;



a Sodium Sulphate Capital Incentive to promote investment in more

efficient production technologies;



a tax credit for contributions to qualifying political parties or

election candidates; and



a royalty and tax incentive package for enhanced oil recovery

projects using CO2.



The 2001-02 budget will once again be balanced despite a projected revenue

decrease of about $750 million from 2000-01. Overall spending, including

one-time and multi-year initiatives is budgeted at $6.3 billion.



Government debt will continue to drop. It is forecast to decrease by

$181.3 million in 2000-01 and a further $24.9 million in 2001-02.



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For more information, contact:



Sandra Lodoen

Finance

Regina

Phone: (306) 787-6578