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Used cars, energy-efficient appliances more expensive under Sask. Party budget
Steve Lambert and Ryan McKenna, The Canadian Press
Published Tuesday, April 10, 2018 10:04AM CST
Last Updated Tuesday, April 10, 2018 7:23PM CST
Buying a used car or energy-efficient appliance in Saskatchewan will get a little more expensive under Premier Scott Moe's first budget as the government continues to chip away at the deficit.
The Sask. Party's budget tabled Tuesday broadened the provincial sales tax for the second straight year, broke an income-tax promise and kept a tight lid on spending -- all in an effort to balance the books by next year.
The budget ends provincial sales tax exemptions for Energy Star-rated appliances and used cars and light trucks, with the exception of privately-sold used vehicles worth less than $5,000.
The government is also breaking a promise made last year to cut personal income tax rates by half a percentage point, and will no longer raise income tax brackets to match inflation.
The indexing of tax brackets was temporarily suspended last year, and the government said Tuesday the suspension will now continue with no firm end date.
Finance Minister Donna Harpauer said the measures will help the province meet its target to eliminate the deficit.
"We have a plan to get back to balance and this will help us achieve that plan."
The tax changes come one year after the government raised the provincial sales tax to six per cent from five and expanded it to cover restaurant meals, children's clothing and more.
Premier Scott Moe, who replaced Brad Wall earlier this year, said boosting consumption taxes will help Saskatchewan move away from a heavy reliance on energy prices.
"We have started the shift ... away from our dependence on volatile natural resource commodities in the province of Saskatchewan to something much more stable, to ensure that we're not hiring and letting teachers, nurses, our front-line services go on the price of a barrel of oil."
The Opposition NDP said the budget delivers more pain to families.
"I think the people of Saskatchewan are definitely feeling the fatigue of these increased costs through taxes, through fees, through their power bills," said NDP finance critic Cathy Sproule.
Many residents could also soon be paying more to heat their homes because the government is going to give more municipalities the option of charging a five per cent SaskEnergy surcharge.
The budget also includes spending restraint.
While the province is restoring Crown corporation grants in lieu of taxes to municipalities that were cut last year, it is reducing direct support to municipalities by 4.9 per cent.
Direct funding to First Nations and Metis groups is being cut by 1.5 per cent. Spending on highways and other transportation infrastructure is dropping 16 per cent, and operational funding for colleges and universities is being frozen at last year's level, which was a five per cent cut from the previous year.
The president of the University of Regina said that will mean cuts and tuition increases.
"We will be cutting even if we have a tuition increase, because we will attempt to keep a tuition increase balanced," Vianne Timmons said.
The province is also going to stop accepting new applications for a housing subsidy program on July 1 as it anticipates a new federally led program in a couple of years, and is keeping funding increases to school divisions below the rate of inflation.
One area that will see a spending increase is policing in rural areas to fight crime. Almost $5 million in new funding will add 30 traffic patrol officers.
"One of the things we've heard from rural Saskatchewan is (police) presence," Harpauer said. "The additional officers will be additional presence on the road."
The overall fiscal restraint is aimed at helping the province cut the deficit this year to $365 million, down from $595 million last year, on total spending of $13.3 billion. The budget predicts a razor-thin surplus of six million dollars next year.
One major factor in the lower deficit this year is higher interest rates that have improved the performance of public-sector pension plans. Pension liabilities and other benefit expenses for teachers are predicted to drop $352 million this year.