Balanced Budget Keeping Saskatchewan Strong

Released on March 18, 2015

Finance Minister Ken Krawetz today tabled a balanced budget that will keep Saskatchewan strong by keeping taxes low, investing in infrastructure, controlling operating spending and providing new incentives that will help create jobs.

The 2015-16 Budget is balanced, with a surplus of $107 million. Overall revenue is $14.28 billion, up just 1.2 per cent from last year. Overall spending is $14.17 billion, also up just 1.2 per cent from last year.

“This budget is about keeping our economy strong and keeping our province strong,” Krawetz said. “We will do that by controlling operating spending, not raising taxes, and continuing to make record investments in much-needed infrastructure projects like highways, schools and health facilities.”

Investment in health, education, and social services continue to be priorities, accounting for nearly three-quarters of all spending in the 2015-16 Budget. The overall spending increase in those key areas is just under two per cent. All other areas of government combined are budgeted to spend 0.6 per cent less this year.

In addition, the Active Families Benefit, Graduate Retention Program, Research and Development Tax Credit, Seniors’ Drug Plan and Saskatchewan Employment Supplement are being changed to ensure their ongoing sustainability.

Strength in the potash industry and a change in the Potash Production Tax will help offset the $661 million decline in oil revenue from last year’s budget due to the falling oil price. The total tax deduction potash producers receive from their capital spending will now be used over a longer period of time.

“As a result of this change and overall growth in the potash industry, potash revenue is expected to be up by nearly $400 million this year,” Krawetz said. “This change was made following consultation with the potash industry, which continues to show tremendous confidence in Saskatchewan through major capital expansions.

“This interim step will be followed by a broader review of the entire potash taxation and royalty regime. However, any further changes resulting from a review must balance the excellent investment and operational environment for this sector, which is so important to the provincial economy, with the need for a fair return for the owners of the resource, the people of Saskatchewan.”

As a result of controlling operating spending, Budget 2015-16 contains no tax increases and no reduction in revenue sharing with municipalities, which could have contributed to higher taxes at the municipal level.

Budget 2015-16 provides $265.3 million in revenue sharing - the largest grant ever provided to Saskatchewan municipalities - an increase of $8.3 million compared to last year, and an increase of $138 million or more than 108 per cent, from the 2007-08 Budget.

As Saskatchewan’s population continues to grow, so does its infrastructure and capital needs. This budget begins a four-year, $5.8 billion commitment - the Saskatchewan Builds Capital Plan - to construct and maintain needed infrastructure such as schools, health care facilities, municipal infrastructure, roads, bridges and highways.

Within the four-year plan, Budget 2015-16 provides more than $1.3 billion for core infrastructure in 2015-16, the largest infrastructure allocation in Saskatchewan’s history and an increase of almost 50 per cent from last year. This investment is in addition to $2.0 billion in capital investment forecast this year by the commercial Crown corporations—largely SaskPower, SaskTel and SaskEnergy.

“Including this budget, our government has now committed more than $3.0 billion to core Government infrastructure since 2013-14 - exceeding the Growth Plan commitment to invest $2.5 billion in infrastructure from 2013-14 to the end of 2015-16,” Krawetz said.

Key infrastructure commitments in this budget include:

$581 million in 2015-16 for transportation infrastructure, a 43.4 per cent increase from last year;
$74.5 million for municipal infrastructure in 2015-16, with plans to invest more than $400 million over the next four years;
$248.5 million in capital in 2015-16 for K-12 schools, up $150.6 million compared to last year. This is the largest allocation for school construction and renovation in Saskatchewan’s history. Over the next four years almost $900 million will be invested to build and renovate schools;
$46.6 million in capital in 2015-16 for advanced education and training, with the four-year plan estimated to provide almost $185 million; and
$256.4 million for health capital, an increase of $161.6 million from last year. The four-year plan is to invest more than $700 million in health facilities.

Budget 2015-16 creates two new growth tax incentives to encourage job creation and capital investment.

The new Manufacturing and Processing Exporter Tax Incentive will provide tax credits to eligible exporting corporations that increase their number of full-time employees who do work typically considered to be head office functions.

In addition to the traditional manufacturing and processing sector, the incentive will also apply to corporations involved in the commercial development of new economy products - including interactive digital media and creative industry products.

The second new tax incentive is a rebate for primary steel production, supporting the Growth Plan commitment to encourage new capital investment. The rebate will provide a tax incentive for eligible primary steel producers that make a minimum capital investment of $100 million in new or expanded productive capacity.

“These are new growth tax incentives, meaning that they apply on new activity only and will have no impact on existing government revenues,” Krawetz said.
The 2015-16 Budget also provides incremental investments to help develop a skilled work force.

Key training initiatives include:

$26.9 million, an increase of $2.5 million, to fulfill three medical training commitments: 100 medical training seats, 120 medical residency seats, and 20 new nurse practitioner seats;
$25.6 million in total for Adult Basic Education, including funding for 200 additional seats; and
$23.2 million in total for apprenticeship training, including funding for 300 additional training seats.

“This budget contains incentives to help businesses create new jobs and more training opportunities to ensure our workforce has the skills needed to fill the job opportunities in Saskatchewan,” Krawetz said.

Health, education and social services and assistance account for 73.2 per cent of all government expense. Spending in these areas is forecast at $10.4 billion in 2015-16, up 1.9 per cent from last year’s budget and an increase of 67.7 per cent since 2007-08.

The 2015-16 Budget provides $5.5 billion in total spending for health care, up 1.1 per cent from last year. Investments include:

$3.3 billion for Regional Health Authorities, up $55.7 million from last year’s budget, for operating funding and targeted initiatives;
$157.3 million for the Saskatchewan Cancer Agency, up $1.6 million from last year’s budget;
$10 million in new investment dedicated to seniors care, bringing the total to $14.5 million for 2015-16, including: a $3.5 million increase dedicated to enhance the Home First program, bringing the total commitment to $8.0 million; a $2.8 million increase for Dementia/Behaviour Units in Regina and Saskatoon; $2.0 million to provide increased choice and flexibility in care options for home care clients; and, $1.7 million to improve quality and safety in long-term care and the development of a new geriatric program in Regina; and
$4.7 million to reduce emergency department wait times, up $3.0 million from last year.

The 2015-16 Budget includes $3.7 billion for education spending, up 2.8 per cent over last year’s budget. Significant investments include:

$1.87 billion in total operating funding to school divisions, an increase of $52.8 million, or 2.9 per cent;
$661.2 million in post-secondary operating funding, providing a 1.0 per cent operating increase for universities, affiliated colleges and regional colleges, and a 2.0 per cent operating increase for technical institutes and federated colleges; and
operational funding increases of 6.0 per cent for the new Trades and Technology Centre at Parkland College and 22.4 per cent for the Saskatchewan Indian Institute of Technology (SIIT), better aligning SIIT’s funding to other technical institutes.

Investments in social services and assistance will reach $1.2 billion in this budget, an increase of 3.2 per cent over last year’s budget. Among the key investments, this budget includes:

$485.7 million, across multiple ministries, to new or enhanced programing and increased program utilization for Saskatchewan people with disabilities, up $39.5 million from last year’s budget. The largest component is $200.4 million, an increase of $26.8 million or 15.4 per cent over last year, for Saskatchewan Assured Income for Disability, committed to providing people with disabilities an assured income; and
$26.5 million, an increase of 1.8 per cent, to increase the Seniors Income Plan monthly benefit by $10 a month, meaning that since 2007 the benefit has tripled, from $90 to $270 per month.

“There is no doubt this is a challenging budget, but the good news is Saskatchewan has never been in a better position to meet this challenge,” Krawetz said. “Our economy is more diversified than ever before, more people live here than ever before, exports are at an all-time high and businesses continue to show tremendous confidence in Saskatchewan’s future through major capital investments.

“Our diverse economy and this balanced budget will keep Saskatchewan strong.”

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For more information, contact:

Jeff Welke
Finance
Regina
Phone: 306-787-6046
Email: jeff.welke@gov.sk.ca
Cell: 306-536-1185

Balanced Budget Keeping Saskatchewan Strong

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