Changes to Saskatchewan’s provincial sales tax (PST) exemption on insurance premiums are drawing fire from political opposition but not from the construction industry.
The Saskatchewan government recently announced there will no longer be a provincial sales tax on agriculture, life insurance and health insurance premiums, a promise new Premier Scott Moe made during his leadership campaign.
NDP Finance Critic Cathy Sproule said in a statement that “the changes announced today will do nothing to help the construction industry, restaurant owners or families who have been struggling under the Saskatchewan Party’s massive PST hike.”
But Saskatchewan Construction Association (SCA) president Mark Cooper said the changes will actually benefit construction companies.
“It’s good for companies that pay health insurance for employees, as it will reduce some costs,” Cooper said.
Cooper noted that the PST still applies to construction, house and mortgage insurance.
“So affordability is an issue and it affects competition,” he said.
“We’re still advocating for house and mortgage insurance to be removed from the tax rolls, but that’s not a promise Premier Moe made.”
Moe previously stated the new exemptions will cost $65 million in revenue forecasted for the current fiscal year and $120 million the following year, but will not change the government’s three-year plan for a balanced budget by 2020. The exemption is retroactive to Aug. 1, 2017, the day the province began adding the six per cent PST to insurance premiums.
The SCA advocates for an overall review of taxes, he said, while examining the taxation of construction services.
“Other jurisdictions don’t do that, which makes us less competitive,” Cooper said. “We want to ensure that Saskatchewan is the most competitive region for construction, while making sure the government is getting the revenue needed to balance the budget.”