Released on December 29, 2023
Low personal taxes and indexation are among the measures the provincial government is taking to help make life more affordable for Saskatchewan people this year.
“A family of four with annual income of $75,000 will save $322 in 2024, as a result of indexing personal income tax,” Finance Minister Donna Harpauer said. “That is on top of the $400 that family will save through our government’s decision to stop collecting carbon tax on home heating, for a total savings of over $700 in 2024.”
Indexation protects against bracket creep, which are the automatic increases in tax caused by inflation.
“Combined with our government’s commitment to keep personal taxes low, indexation is an important component of affordability that is among over $2 billion of affordability measures built into our budget each year,” Harpauer said. “For a family of four, when taxes, utilities and housing costs are considered, Saskatchewan is the most affordable province in which to live in Canada.
“A family of four now pays no income tax on their first $59,475 of income. When our government took office, a family of four started paying provincial income tax at $26,150 of income. Reductions our government introduced have more than doubled the tax-free threshold.”
Indexation of the provincial Personal Income Tax (PIT) system preserves the real value of personal tax credits, and the income tax brackets, since these also rise with inflation. Indexation protects taxpayers from automatic tax increases that would otherwise occur when their incomes rise with inflation.
For example, indexing the basic personal amount preserves the real value of the amount that all taxpayers can earn without paying tax. Indexation also preserves the real value of benefits people can receive, such as the Saskatchewan Low-Income Tax Credit. Indexation, therefore, provides significant benefits to pensioners and others who are on fixed incomes.
Indexation will result in Saskatchewan residents seeing $70.5 million in annual income tax savings. The level of indexation in 2024 will be 4.7 per cent, which matches the annual average national inflation rate from October 2022 to September 2023.
The combined effect of the indexation of the tax system from 2007 through the 2024 taxation year is saving Saskatchewan taxpayers a total of approximately $355 million in 2024.
Saskatchewan has among the lowest personal taxes in the country. Since 2007, PIT exemptions have removed more than 112,000 people from the province’s income tax roll. In total, PIT reductions since 2007 are providing over $830 million in annual income tax savings to Saskatchewan people. Saskatchewan also has one of the highest tax-free thresholds in Canada.
Also helping with affordability, families in Saskatchewan with children enrolled in sports, arts and cultural activities will continue to be able to claim the Active Families Benefit on their tax returns.
The benefit was reinstated in 2021 and provides a refundable tax credit of $150 per year, per child to eligible families. Families of children with a disability will receive an additional $50, for a total tax credit of $200 per year, per child. Parents who enroll their children in sports, arts and cultural activities are reminded to keep their receipts so they may claim the benefit with their annual tax filings.
“The Active Families Benefit, the Disability Tax Credit, the Saskatchewan Low-Income Tax Credit and others, when combined with affordable housing, comparably low utility rates, indexation and low personal taxes demonstrate our government’s commitment to helping keep life affordable for Saskatchewan people,” Harpauer said.
For more information, contact:Regan Halbert