Released on November 16, 2006
Thanks largely to $171.9 million in higher tax revenue reflecting a strong and growing economy, the 2006-07 Mid-Year Report forecasts a $402.3 million revenue improvement for the year over Budget."The strong economy is allowing us the freedom to cut taxes and make major new investments in social programs to make life better for Saskatchewan families," Finance Minister Andrew Thomson said.
The forecast bottom-line revenue increase comes even after the October 28 Provincial Sales Tax (PST) cut, from seven to five per cent. The forecast General Revenue Fund surplus now stands at $34.5 million, with no transfer from the Fiscal Stabilization Fund.
"This year alone, we have undertaken more than half-a-billion dollars in tax cuts to stimulate our economy and improve the lives of ordinary Saskatchewan families," Thomson said.
Recent tax measures include:
• cutting the PST by two points to a 20-year low of five percent;
• cutting income tax by indexing the brackets and credits for personal income taxes to the national rate of inflation for the fourth year running (increasing brackets and credits in 2007 by 2.2 per cent);
• cutting corporate capital and income taxes;
• reducing the small business tax rate and increasing the threshold for small businesses to qualify for that rate; and
• cutting property taxes for farmers by paying 60 per cent of the cost of education assessed to farmland through the education property tax.
"Stronger revenues from a stronger economy allow the PST cut to be sustainable as it is funded from an ongoing tax improvement related to economic strength, and not from windfall revenues."
"I am very pleased that we are also able to use our resources, and the benefits of reduced interest costs, to build stronger communities and get ready for further growth by improving the economic infrastructure of the province," Thomson said.
An additional $324.7 million in program support is incorporated in the Mid-Year Report including expenses related to:
• additional funds to recruit and retain health workers;
• highway work including additional funds for winter highway construction and planning work;
• labour market initiatives; and
• education capital funding undertaken by the departments of Advanced Education and Employment, and Learning.
The Mid-Year Report also highlights $100 million for the Building Communities program, as part of the new multi-year Saskatchewan Infrastructure Fund.
"We have also improved transparency and accountability for the Fiscal Stabilization Fund through full cash funding this year," Thomson said.
The $402.3 million forecast revenue increase for the year at Mid-Year includes the $72.9 million improvement for the year as forecast in the First Quarter Report in July. That improvement went toward fully funding the Canadian Agricultural Income Stabilization (CAIS) program for 2006 ($60 million), repairs for flood-damaged roads and other initiatives.
The attached backgrounder has further details and a copy of the report can also be found online at www.gov.sk.ca/finance under the "Publications" tab.
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For More Information, Contact:
| Lorri Thacyk Finance Regina Phone: 306-787-6605 Email: lthacyk@finance.gov.sk.ca |