Here's how tax changes will impact Sask. residents' pocketbooks in 2023

Ringing in the New Year means some Saskatchewan residents are about to see increases in their gas and power bills, property taxes and pension contributions, among other things.

The federal carbon tax is set to increase from $50 per tonne of greenhouse gas emissions to $65 per tonne on April 1.

The cost of fuel will also increase by three and a half cents as a result of carbon pricing combined with GST, according to economist Jason Childs.

Childs said the extra cost will not only be seen at the pumps, but also on imported goods.

“If it is shipped from somewhere else, they are going to burn fuel to get it here and they are going to have to pay the increased carbon tax to get it here,” he said.

“It’s another hit to the wallet of the Canadian consumer and Canadian businesses.”

In an effort to offset some of the carbon pricing costs, Saskatchewan residents will receive four equal federal Climate Action Incentive payments in April 2023, July 2023, October 2023 and January 2024.

In Saskatchewan, the first adult of a family will receive $170, the second adult will get $85, each child will receive $42.50 and a family of four will receive $340 each payment.

“The claim is that most people are going to receive more than they pay and I don’t think that’s accurate,” Childs said, adding that circumstances vary.

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“There are definitely people who are receiving more than they pay and there are definitely people who are paying more than they receive.”

The Canadian Taxpayers Federation (CTF) estimates that the average family will end up paying $500 on top of the climate change rebate that they receive.

 

“It hits families hard especially because I don’t think a lot of people expected to see the inflation that we saw this year,” said CTF prairie director Gage Haubrich.

“Everything is more expensive and adding an extra $500 on top of the next year definitely isn’t going to help.”

On Jan. 1, 2023, SaskPower added a three per cent increase to adjust for the carbon tax, which amounts to an increase of $2.60 per month for the average home.

The added cost is in addition to the four per cent increase that customers saw in September 2022.

The increase in carbon pricing will also impact SaskEnergy customers, according to the Crown corporation.

The average residential SaskEnergy customer can expect to see a nine per cent increase annually, or an average of $79 per year. Commercial customers can expect an increase of 10 per cent.

The increase will take place in April 2023.

PERSONAL INCOME TAX SAVINGS

The Saskatchewan government said its indexation of the provincial Personal Income Tax (PIT) system will result in residents saving a total $94.5 million in annual income tax.

Indexation preserves the “real value of personal tax credits, and the income tax brackets, as well as benefits such as the Saskatchewan Low-Income Tax Credit,” the province said in a news release.

The level of indexation in 2023 matches the annual average national inflation rate of 6.3 per cent.

“They’re trying to make sure they are taxing people in the same standard of living situation the same way as they were last year,” Childs said.

“This is pretty standard. The federal government does this. Provincial governments generally do this.”

On average, an individual with an annual income of $25,000 will save $125, according to the provincial government.

A family of four with a combined annual income of $75,000 will save $371 and a family of four with a combined income of $100,000 will save $362.

"Our Government recognizes that costs have risen due to inflation, and we are committed to taking steps to help keep life affordable for Saskatchewan people," said Finance Minister Donna Harpauer in a news release.

CHANGES TO THE CANADA PENSION PLAN

Changes are also coming for those who contribute to the Canada Pension Plan (CPP).

Employee and employer contribution rates are rising 0.25 per cent from 5.70 per cent to 5.95 per cent in 2023.

Childs said the increase could impact wages.

“You’re costing your employer more. Your employer has to find a way to either get that much more productivity out of you, suffer and take lower profits, or they are going to have to find a way to pay you that much less,” he said.

Childs said reductions could come in the form of lower wages or a decrease in benefits or vacation days.

The maximum pensionable earnings under CPP is also increasing to $66,600, up from $64,900 last year.

Contributors who earn more than the maximum in 2023 are not required to make additional contributions to the CPP.