NSBA applauds government commitment to return to balance in two years
Posted on April 10, 2018 in Business, News Release
SASKATOON, SK – A year on from one of the most challenging budgets in recent memory, the NSBA is happy to see that the province remains on course to return to a balanced budget in 2019/20, as planned in the 2017 budget.
As a supporter of balanced budgets at all levels of government, the NSBA applauds the government’s strategy of incrementally working towards balance and avoiding persistent large deficit budgets that increase the debt level of the province. There are still significant pain points in this budget for business, including the continuation of PST on construction labour, but the NSBA is pleased to see a significant reduction in expenditures instead of tax increases. This is a sound overall strategy and will be better for the province than the alternatives.
A significant portion of the savings predicted by the province includes a plan to reduce public service compensation significantly over two years. The NSBA strongly supports this course of action as it believes that government should always examine how it can save on costs before raising revenues. However, the NSBA notes that the government was unable to meet a 3.5% reduction target in the 2017 budget and would caution the government that savings must be achieved in this area during the 2018/19 year if it is in the plan.
The NSBA also supports specific plans announced in the budget to implement a 45% technology tax credit and a 15% value-added agriculture tax credit. These tax credits will encourage innovation and entrepreneurship in the province, which are key to motivating the province’s economy and encouraging growth.
“We are strongly in support of a return to balanced budgets,” said Keith Moen, Executive Director of the NSBA. “We do understand, however, the need to work incrementally to avoid shocking our economy. We also have the expectation that the government will follow through on all aspects of its plan instead of walking back significant savings items, such as labour costs, and making it more difficult to actually return to balance by 2020.”
While applauding the government’s commitment to expense reduction and restraint in raising taxes, the NSBA would like the government to develop plans to return to a 5% PST and to reinstate PST exemptions on construction labour for future budgets. The NSBA understands why this is not an option at the current time and appreciates the government not moving further away from these targets in the 2018 budget. Nonetheless, the NSBA believes that a 5% PST and a construction labour exemption are ultimately the correct policies when considering Saskatchewan’s relative economic competitiveness with Alberta or the United States and would eventually like to see the province return to these policies when it is prudent.
Additionally, the NSBA advocates for the creation of a sovereign wealth fund for the province as a recognition of the volatile nature of resource royalty revenues, particularly in light of the uncertainties currently plaguing the Trans Mountain pipeline project. The NSBA does not expect the government to contribute to such a fund in deficit years but feels that this would be a valuable tool to help avoid future deficit situations caused by unpredictable resource revenues.
“Regardless of our provincial surplus or deficit situation, we must ensure that we are making smart policy decisions that allow Saskatchewan to remain nationally and globally competitive,” said Mr. Moen. “This includes protecting our financial position as a province and making sure that we have a competitive tax framework that can attract jobs and investment.”
For more information:
The NSBA is a member-driven and focused business association in Saskatoon that serves, promotes and protects business throughout Saskatoon and beyond. The NSBA has recently rebranded to be known simply by its acronym – NSBA – to reflect its current membership which has grown considerably beyond Saskatoon’s north end. The NSBA has developed its mandate and reputation by being a relevant, topical and effective organization that interacts with all levels of government and industry on a variety of issues for the betterment of our local economy.
Keith Moen
Executive Director
NSBA
P: (306) 242-3060
C: (306) 371-6876
-30-