July 22, 2024 July 22, 2024

Saskatchewan is spending too much for a tax cut

Posted on 24 June 2024 by Ryan Dahlman

By Greg Haubrich

The Saskatchewan government is spending too much money and it’s costing taxpayers big time.

The government offered no tax relief to cash-strapped taxpayers in its latest budget. It did, however, give them a $273 million deficit, record spending, rising debt and increasing interest payments.

And that’s something that didn’t seem to sit to well with Saskatchewan Finance Minister Donna Harpauer.

“I would have loved to have ended with a budget that was balanced and was able to do a tax reduction,” Harpauer said. “However, it is the budget I am comfortable with.”

She said other members of the legislature were pushing for “substantive increases” to spending when she defended the deficit.

But compared to other provinces, Saskatchewan is spending all the money in its wallet and then smashing the piggy bank to look for any extra cash it can use.

This year, the government of Saskatchewan is going to spend about $16,430 per person. Premier Wab Kinew’s NDP government in Manitoba is going to spend slightly less at $16,367 per person. Premier David Eby in British Columbia is spending even less at about $15,942 per person.

Saskatchewan’s most fiscally responsible neighbour is Alberta, which is spending $15,241 per person this year.

That’s right, Saskatchewan is spending more money per person than any other province in Western Canada.

And that’s the problem, because it’s not like this is the Budget Olympics. Both B.C. and Manitoba are blowing their own budgets this year with huge deficits and even Alberta is still borrowing more this year.

Saskatchewan has placed last in a competition of fiscal restraint even though hardly anyone else is even trying.

The government says it needs to spend this much money because the province is growing, but even that doesn’t pass the smell test.

Saskatchewan’s population grew 2.6 per cent in 2023. That’s the lowest population growth rate of all provinces in Western Canada. Alberta, the province that spent the least per person, also grew the most compared to last year.

And it’s not clear that all this extra spending is helping. Alberta beats or is even with Saskatchewan when it comes to health-care wait times and regularly out-performs Saskatchewan when ranked on educational performance.

More money does not mean better results.

And because the government is spending so much, that means there is little room left over for the tax relief that Saskatchewanians want and need.

A Saskatchewan family making $75,000 in Regina is paying about $1,342 more in provincial taxes compared to a similar family in Calgary, according to Saskatchewan budget documents.

The government needs to reduce its wasteful spending to provide tax relief. If the government were to reduce its per person spending to Alberta’s level, instead of facing a $273 million deficit, the government would be looking at a $1.2 billion surplus. That’s enough money to fully cut the provincial fuel tax with about $662 million left over to spend on further tax relief or debt repayment.

If those numbers aren’t enough motivation for the government to find some savings, a fuel tax cut is also something that Saskatchewanians want.

A poll conducted by Insightrix shows that 74 per cent of Saskatchewanians support the government cutting the 15 cents per litre provincial fuel tax. Saskatchewanians like saving money.

A two-car family, with a minivan and a light duty pickup truck, would be saving about $11 and $15 every time they fill up each vehicle. If that family fills up those vehicles once every two weeks, they would be saving about $676 per year with a fuel tax cut.

Reducing spending to Alberta’s level would offer more than enough to cut the fuel tax and get Saskatchewanians some tax relief.

The problem is clear, the government is spending too much. Saskatchewan needs to get its spending in line with other Western provinces and use the surplus to provide tax relief.

Gage Haubrich is the Prairie Director for the Canadian Taxpayers Federation

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