Gov­ern­ment backs off prom­ise to lower cor­po­rate tax rate

Prince Albert Daily Herald - - ARTS & ENTERTAINMENT - PETER LOZINSKI

Mere months af­ter low­er­ing the cor­po­rate tax rate, the Sask. Party has an­nounced it will be bumped up back to 12 per cent.

A tax cut was in­cluded in the most re­cent bud­get to bring Saskatchewan in line with B.C. as the prov­ince with the low­est cor­po­rate tax rate.

With B.C. in­creas­ing their rate to 12 per cent, Saskatchewan will be do­ing the same. The move was an­nounced in Wed­nes­day’s throne speech.

In­stead, the Sask. Party will be rais­ing the small busi­ness in­come thresh­old to $600,000, the high­est in the na­tion. That is the point where a busi­ness re­verts from the two per cent small busi­ness tax rate to the higher cor­po­rate rate, ex­plained Canadian Tax­pay­ers Fed­er­a­tion prairie di­rec­tor Todd MacKay.

“This is im­por­tant be­cause it gives small busi­nesses more rom to grow be­fore they hit that higher tax rate. That’s a good thing. We want small busi­nesses grow­ing into medium and even big busi­nesses, be­cause that brings more jobs to our com­mu­ni­ties,” he said.

“It’s go­ing to en­cour­age growth among en­trepreneurs.”

What MacKay was not pleased with was the plan to back off the promised cor­po­rate tax rate re­duc­tion.

“It’s a real missed op­por­tu­nity,” he said.

“You don’t want to bust be as good as the other guys, you want to be bet­ter. When you give that kind of tax re­lief to en­trepreneurs, they in­vest in their busi­nesses. They cre­ate more jobs, which is good for com­mu­ni­ties and good for gov­ern­ment too.”

The op­po­si­tion NDP nei­ther prised nor crit­i­cized the move. In­stead, they fo­cused on the un­pop­u­lar de­ci­sion to add PST to in­sur­ance.

“(Low­er­ing cor­po­rate taxes) was a strange de­ci­sion to make dur­ing a bud­get that saw in­creased taxes for fam­i­lies … and made pretty se­ri­ous cuts to ser­vices peo­ple like and rely on like ed­u­ca­tion,” said in­terim leader Ni­cole Sa­rauer.

“But if the premier wants to sup­port small busi­nesses, he should look at the changes they made through ex­pan­sions to PST.”

Some of the Sask. Party lead­er­ship can­di­dates have vowed to re­peal the PST on in­sur­ance should they be elected.

The prom­ise to back off that change is wel­comed by MacKay.

“Putting the PST on in­sur­ance needs to change,” he said.

“A tax on re­spon­si­bil­ity is an ir­re­spon­si­ble tax.”

MacKay said in­sur­ance can help mit­i­gate some risks busi­ness own­ers take when they in­vest in other op­por­tu­ni­ties, but tax­ing in­sur­ance might dis­cour­age peo­ple from pur­chas­ing it.

“If in­sur­ance is the right tool to mit­i­gate risks, pun­ish­ing peo­ple for mak­ing sure they’ve got the tools in place to get through a tough time is bad gov­ern­ment pol­icy,” he said.

“It’s bad on a lot of lev­els.

“The gov­ern­ment needs to turn around and take the PST off in­sur­ance pre­mi­ums and they need to do it as soon as pos­si­ble.”

HERALD FILE PHOTO

The Saskatchewawn Leg­is­la­ture.

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