Saskatchewan Party should put tax cuts back on the table

Regina - Tuesday, October 7, 2003 - by: David MacLean, Saskatchewan Director, Canadian Taxpayers Federation


On the eve of a provincial election the Saskatchewan Party pulled some of their proposed tax cuts off the table, citing the province's growing deficit. This announcement comes as a surprise, as they have stood on a tax-cutting platform since the 1999 election campaign.




There are a number of explanations for their retreat on tax cutting. We can take their explanation at face value and believe the massive deficit has destroyed any hope for tax cuts. You could also wonder if they looked east toward the Ontario election where Ernie Eves was getting solidly trounced in the media for his ambitious tax-cut promises. One might also conclude that Saskatchewan Party staff took a look at opinion polls and decided there are more sellable policies for the campaign - winners such as boot camps for car thieves.



tax cuts

Regardless of their motives, the Sask Party's campaign took a wrong turn when they pulled tax cuts from the table. In fact, given the province's dire financial situation, an aggressive tax-cutting platform is needed now more than ever.




Saskatchewan talk radio and newspapers constantly remind us of the province's decline. The worst stat of all is the fact that our population is declining, and for the first time in eons our population has dropped below the million mark. The Fraser Institute continues to point out that Saskatchewan's economic growth has lagged behind the rest of the country for decades. A recent study by Global Insight out of Toronto points out that the average disposable personal income in Saskatchewan is the lowest in Canada




What led us down this path is bad government policy.




On the eve of an important election campaign, what we need is leadership. Not timidity, not trimming around the edges. The Saskatchewan Party's long standing commitment to halve the corporate capital tax, to make Saskatchewan a small business tax free zone, and to increase the amount Saskatchewan residents can earn before they pay income tax is the kind of medicine Saskatchewan needs.




Retaining the tax base is the only way to ensure the long term economic viability of the province. The only way to retain the tax base is to lift the weight of taxation off businesses and individual, making Saskatchewan a more competitive jurisdiction.




What taxpayers need is a four-year plan to eliminate the deficit, cut taxes and reduce spending. Rolling government spending back to 2001 levels - when we had more people in the province - would free up $1.5 billion for tax cuts. $1.5 billion would more than offset the elimination of the corporate capital tax ($370 million) and all corporate income taxes ($178 million), increasing the basic personal exemption to $10,000 ($126 million), and reducing school taxes on property by 40 per cent ($260 million).




We haven't even mentioned the crown corporations - the organizations that account for 40 per cent of government spending. Also note that Alberta cut government spending by up to 20 per cent in the early 1990's and still lived to tell about it. For Saskatchewan, we're recommending that spending be rolled back to what it was just two years ago.



only hope

It's unfortunate the Saskatchewan Party have poured water on their tax cut plans. It seems to us that tax cuts are our only hope.



David MacLean
Federal Director


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