Ryan Tax Alert - Saskatchewan Budget 2008

On March 19, 2008, Minister of Finance Rod Gantefoer presented the 2008-2009 Saskatchewan budget. The province’s 15th consecutive balanced budget – and the first tabled by the new Saskatchewan Party government – focuses primarily on preparing for sustained economic growth, including the announcement of $1 billion in spending initiatives for improvements to infrastructure, health care and education.

With its largest population growth in 30 years, unemployment at a 25-year low, and strong growth in retail sales and international exports, the province also announced several tax reduction measures, including one significant commodity tax change.

PST Exemption for Used Light Vehicles

As announced late last year, effective November 8, 2007, Saskatchewan’s provincial sales tax (PST) no longer applies to the purchase or lease of eligible used light vehicles.

Eligible light vehicles include all cars, sport utility vehicles, and light vans and trucks rated one ton or less, on which the PST has been previously paid in full. Acquired vehicles partially financed by an eligible trade-in will be deemed to be fully tax-paid. Heavy vehicles, buses, trailers, motor homes, motorcycles and recreational vehicles, as well previously-owned vehicles acquired under certain circumstances, are not eligible for the exemption. A refund of tax may be available for any PST paid on eligible used light vehicles purchased on or after November 8, 2007, subject to certain conditions.

Further information on the exemption for used light vehicles is available on the province’s web site at:
http://finance.gov.sk.ca/bulletin/pst/Used vehicle bulletin.pdf

Harmonization

In this year’s budget, the government takes the opportunity to contrast Saskatchewan’s current PST, which has numerous exemptions for basic items such as food, residential natural gas and electricity, children’s clothing and reading materials, with a sales tax harmonized with the federal GST, under which tax would apply to a much broader range of goods and services. This comment might suggest that either Saskatchewan’s desire to revisit the issue of harmonization is waning, or the possibility is under consideration.

The province also noted that its fuel tax exemptions, which provide tax-free treatment to farm-use diesel fuel through a fuel-colouring program and a partial exemption for farm-use gasoline purchased in bulk, recognize the importance of the agricultural sector in Saskatchewan.

No other significant commodity tax changes were announced.

Full details on the Saskatchewan 2008-2009 budget are available on the province’s web site at:
http://www.finance.gov.sk.ca/budget/2008-09.

HOME