The New Year brings a second dose of bracket creep in Saskatchewan

Bracket creep is sneaking into Saskatchewan again this year as the province’s tax brackets are no longer adjusted for inflation which bumps many taxpayers into higher tax brackets even though they aren’t actually making more money.

“Like the Christmas cookies expanding our waistlines with every bite, bracket creep gradually adds weight to our tax burden by compounding every year,” said Todd Mackay, Prairie Director for the Canadian Taxpayers Federation. “Bracket creep is a sneaky and unfair tax hike that hits people when they get a cost-of-living adjustment on their wages and find themselves paying more tax in higher brackets even though there’s no extra room in their household budgets.”

Two years ago, the Saskatchewan government issued a release touting its “commitment” to protecting taxpayers from bracket creep. “Indexation helps keep taxes in Saskatchewan low by protecting Saskatchewan people from ‘bracket creep’,” stated then finance minister Kevin Doherty in a release issued Dec. 29, 2016. The release went on to estimate indexation would save taxpayers $9 million.

But that ‘commitment’ ended with the 2017-18 budget that ‘temporarily’ suspended indexation. Indexation is still temporarily suspended.

Bracket creep increased the average Saskatchewan family’s tax burden by more than $50 last year. According to the CTF’S New Year’s Tax Changes report released today, bracket creep will add another $91. That makes the total, two-year tax increase due to bracket creep is $141.

The Saskatchewan government could easily afford to restore indexation to protect taxpayers from bracket creep by phasing out the labour-sponsored venture capital tax credit.