Wother­spoon calls for re­moval of PST on con­struc­tion projects

Moose Jaw Express.com - - News - Matthew Gourlie

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.

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