Province set to restore 2 per cent tax rate for Sask. small businesses

Saskatchewan’s small businesses tax rate couldn’t be any lower. A fact that’s changing as pandemic measures continue to be phased out.

The province reduced the tax rate from two per cent down to zero to help out during the pandemic. Now it’s being phased back in.

“The government initially put it in in 2020. They did say it was a temporary measure to relieve some of the troubles of the pandemic,” Gage Gaubrich of the Canadian Taxpayers Federation told CTV News.

“However we believe that the government did something right here and is helping out small businesses and there’s no reason that they should backtrack on a good policy.”

The tax is being reinstated at one per cent this July and will return to the full pre-pandemic level of two per cent next July.

“Inflation was high last year. It’s increasing costs for businesses and the last thing that small business owners need is yet another cost to pay,” Gaubrich said.

“It’s a drop in the bucket for the government but it could be a make or break moment for these small businesses.”

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The NDP opposition agrees that now is not the time to be adding taxes to small business.

Opposition MLA Aleana Young speaks from experience as a small business owner.

“My power bills have almost doubled at my shop,” she explained.

“Transportation costs, I think the fuel surcharge for my transportation was something just shy of 70 per cent this most recent time and I’ve had five price increases since January 1 which you can’t just turn around and pass on to consumers.”

Even at the full two per cent, the small business tax rate is far less than the 12 per cent paid by many larger corporations.

The province says that the $600,000 income threshold to qualify as a small business is best in the country.