Health is at stake, so why give farmers tax breaks?

This week, the Regina Qu’Appelle Health Region announced it was issuing layoff notices to 20 staff, including seven psychiatric nurses, at Regina General Hospital’s adult mental health unit.

In addition, Saskatchewan’s Assured Income Disability (SAID) cuts raised fresh concerns, while Saskatoon’s Lighthouse emergency shelter funding was being cut.

Also this week, Miner Creek Farms Ltd. owed by Swiss immigrant Sam Rey, was sold to an Alberta Hutterite colony for $26.5 million. The Tisdalearea farm covers 7,871 acres and includes a 4,000-square-foot house, 647,000-bushel grain handling system and 18,000-bushel storage capacity. The farm, like others in the province, pays little or no fuel tax or sales tax while in operation, and little or no capital gains tax when it’s sold.

What’s the connection? Well, a provincial government that collects relatively little tax revenue from large corporate farm operations, like Miner Creek Farms, is eventually going to have to force third parties, like RQHR, to lay off staff and cut much-needed services, like the mental health unit at RGH.

When Finance Minister Kevin Doherty announced that the June 1 budget would mark the start of a “government-wide process of transformational change,’’ he said the government would also be taking a close look at its revenue sources “to ensure they’re sustainable and to guard against too much dependence on volatile revenues sources such as oil and potash.”

“This means a tax system that is competitive, simple and fair for all Saskatchewan taxpayers.’’

Well, if Doherty is looking for some “low-hanging fruit’’ to make our tax system more “competitive, simple and fair,’’ he might want to start plucking a few of the hundreds of millions of dollars spent every year on subsidies, exemptions and tax breaks for rural Saskatchewan, especially the farm sector.

What am I talking about? Farmers pay taxes like the rest of us, don’t they? Well, yes and no.

Of course, farmers pay income tax and sales tax, like everybody else. But they also receive a long list of exemptions, such as provincial sales tax (PST) exemptions on farm machinery and repair parts (estimated at $83.8 million for 2016) and fertilizer, pesticide and seed ($163.4 million) and fuel tax ($120.1 million). That’s close to $300 million annually in exemptions for sales tax alone.

Then there are municipal property tax exemptions under the Municipalities Act, which can reduce all or a portion of the taxable assessment of a principal dwelling.

It’s safe to say that more than $350 million a year in exemptions and preferential tax treatment are available to farmers to reduce their tax burden. So why are we and half a dozen other provinces giving farmers tax breaks?

According to the 2016-17 budget, the rationale for tax exemptions or tax expenditures for certain sectors, like manufacturing, farming and small business, is to allow governments to “attain some of their social and economic goals by reducing the taxes paid by certain taxpayers.’’

But provincial auditor Judy Ferguson couldn’t find any justification for the fuel tax exemption. Her 2016 report says the government “has not clearly defined, in a measurable way, its fuel tax exemptions for farmers and primary producers.’’ And the fuel tax program is getting more expensive; since 2010, the cost has increased by $22.5 million, she said. This for a sector that generated $4.2 billion in realized net income in 2015 — a record high for the province.

Don’t get me wrong. I’m not saying that farmers don’t deserve any tax breaks. Agriculture is a tough business, subject to sharp fluctuations in prices, unpredictable changes in weather and the vagaries of supply and demand economics. Tax breaks help take some of the risk out of an inherently risky business.

Having said that, do Saskatchewan farmers need $350 million in tax breaks each and every year? Do rich corporate farmers need tax exemptions, like the average Canadian farm family with $117,000 in total annual income, three-quarters of that generated off-farm? Could some farmers get by with fewer subsidies?

When the provincial government or its third-party agencies, like health districts, start cutting funding to emergency shelters, laying off nurses, closing down community correctional facilities, shutting down northern educational programs, reducing subsidies to low-income families and people with disabilities, then it’s time to take a long, hard look at the revenue side of the ledger.

Like Doherty said, everything should be on the table.