Sask. hikes sales tax to help tackle deficit

REGINA — Saskatchewan residents will have to dig deeper into their pockets for everything from home renovations to alcohol as the government increases the provincial sales tax to help tackle a $1.3-billion deficit.

The budget tabled in the legislature Wednesday raises the PST to six per cent from five and applies the tax to things that were previously exempt, such as children’s clothing and restaurant meals.

Public-sector wages are also to be reduced by 3.5 per cent, although Premier Brad Wall has said he won’t dictate how that is to be achieved.

“We need the revenue,” Saskatchewan Finance Minister Kevin Doherty said of the PST increase.

“I acknowledge it will put some pressure on families.”

The Saskatchewan government is facing a $1.3-billion deficit in the fiscal year just ending, and hopes to bring it down to $685 million in the year ahead. The plan is to balance the budget in three years.

Doherty said raising the PST was not something the governing Saskatchewan Party campaigned on during the provincial election last year.

But no one expected revenue from natural resources, such as oil and gas, potash and uranium, to fall more than $1 billion and stay that low for three years, he said.

“Why didn’t we campaign on that? We simply weren’t contemplating any changes to the PST at that time,” said Doherty.

The provincially owned bus company will be shut down. The government says it would have cost $85 million to keep the Saskatchewan Transportation Company, known as STC, running for the next five years.

Funding is also being cut by five per cent for post-secondary schools to save $30 million.

Libraries in Regina and Saskatoon are losing funding, while the seven regional library systems will see their funding cut by more than half.