Wotherspoon calls for removal of PST on construction projects
Former provincial New Democrat interim leader Trent Wotherspoon is concerned about the lack of activity in the construction and building sectors in the province.
Wotherspoon was in Moose Jaw recently where he met with eight local business owners. They met to discuss how the implementation of the Provincial Sales Tax (PST) to construction contracts and other service contracts in relation to real property in the 2017-18 provincial budget has affected their businesses and their bottom lines.
“The PST has been really devastating for the construction industry in our province, but really devastating here in Moose Jaw,” Wotherspoon said. “One thing that was pointed out to me by these home builders and sub-trades is the amount of stress that this places on their operations and on workers who have lost employment, and really, the impact on the local economy. Something that stood out that I think is disturbing is that, in 2012 Moose Jaw had 120 brand new homes being built; this year there’s 10.” That lack of new house builds is obviously partly a by-product of the economy and Saskatchewan’s slowing population growth. After years of two per cent population growth, the provincial population only grew 1.2 per cent in 2017. In a reversal of a trend, more people moved away from the province, as opposed to those who moved in. Wotherspoon said that building permits province-wide were down 20 per cent this year. The residential sector is also down 30 per cent this year. “Obviously, that number is much higher in Moose Jaw -- but it’s just such a short-sighted and damaging approach,” Wotherspoon said. “We have an economy that was weakened, and we have a government that is making things worse instead of better in a weak economy by putting the brakes on that economy and creating job loss instead of creating jobs and weakening the investment that we need right now.”
While resource prices are down, Wotherspoon said he doesn’t accept that as an excuse for what he views as an under-performing economy.
“The resource sector is down, and the hard workers and businesses of Moose Jaw don’t control the price of oil,” Wotherspoon said. “The problem is that the government is making deliberate choic- es that is making this economy worse; that is making job-loss worse. The PST being expanded onto construction is the epitome of a job-killing tax. The numbers are bearing out that this is hurting our economy. It hurts Saskatchewan’s bottom-line in the long term, as well, on that front when you’re hurting the economy. It’s devastating many businesses and many lives.”
Wotherspoon, the NDP’s Finance Critic as MLA for Regina Rosemont, had some local businesses reach out to him, so he put out the call to home builders and others involved in the supply chain and in the sub-trades to meet with him to share their perspective. “Something that really came through at this table today was how stressful it is to be left carrying homes that you’ve built and that haven’t been sold. Also, being in a position where you have workers who are reliant on you for their livelihood and having to make those very tough decisions around letting someone go and being a part of causing that job loss as well,” Wotherspoon said. “I saw an incredibly compassionate and common-sense group of business leaders here who are deeply troubled by the impacts of the PST being foisted on construction and deeply troubled by the realities of what that means for them, their families and their operations, but also for their employees or those that they’ve lost. “Our construction industry is really reeling right now, and the job loss has been real.”
The PST on construction has also hit civic governments hard. The government had already cut municipalities funding -- known as grants-in-lieu. The province had initially decided to redirect $36 million from the grants-in-lieu -- typically paid in place of municipal taxes -- back into the province’s hands before deciding to cap the reduction at 30 per cent. The City of Moose Jaw had $984,704 loss of grants-in-lieu from their 2017 operating budget.
That hurts even more, given the six per cent PST is now applied to major capitol projects -- such as the $117 million, 20year water main replacement project that began in 2015.
“The PST on construction is really hurting municipalities and it really hurts tax payers. It’s double-taxation,” Wotherspoon said. “Municipalities who need to take on building projects are now stuck with that GST, on top of that, it’s then paid back to local property tax payers. It’s hurting our economy and it’s driving up costs, as well in the municipal sector.” Wotherspoon said he wants to keep listening to the concerns of businesses in the province and try to take the fight to the legislature to try to put pressure on Premier Scott Moe and the Sask Party to reverse their decision.
“We’re calling for the PST to be removed from construction, but we’re also calling for things like the procurement for public projects to be improved, so Saskatchewan companies and Saskatchewan workers have a fair shot,” Wotherspoon said. “This is a government that is out-sourcing so much of the work when it comes to public procurement -- the building of schools or the bypass or the power station -- so much of that work was sent out of province. We have Saskatchewan companies that should have been directly engaged and competing in delivering that infrastructure.”
Trent Wotherspoon was in Moose Jaw speaking to concerned home builders and others in the construction industry.