Opinion: Saskatchewan’s NDP needs plan to fund its priorities

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Saskatchewan New Democrats made big electoral gains by proposing to rebuild education and health care. The Saskatchewan Party countered that there was no plan to pay for these promises.

As a government in waiting, the enlarged official opposition must develop revenue proposals to fund needed investments in public services.

The NDP platform envisaged holding existing expenditure growth to one per cent annually, far below provincial budget projections and recent public-sector wage settlements.

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With provincial revenues continuing to grow at four per cent annually, the resulting surpluses would cover all promised tax cuts and new spending as well as rising interest payments on the provincial debt.

Even if achievable, these projections did not provide a compelling answer on the doorstep as to how the NDP would pay for its promises. Simply assuming less expenditure growth than the government is not a fiscal plan.

We should always strive to collect the best possible public return from Saskatchewan’s natural resources. Earlier this year, former NDP finance minister Eric Cline published a book detailing how the province is getting only a meagre share of buoyant potash profits.

Even the Saskatchewan United Party recognized the need to review potash royalties to collect more revenue. Yet the NDP platform avoided any mention of potash or other resource royalties.

What should have been avoided were promises that undercut needed provincial revenues. The NDP trumpeted a gas tax holiday that would not help anyone without a vehicle.

Removing tax leaves more room for gas stations to raise pre-tax prices over time, limiting consumer savings.

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Any reduction in after-tax prices would encourage more fuel consumption — hardly a positive environmental measure. And there was no proposed holiday from the Saskatchewan Party’s road-use charge on electric vehicles.

Suspending the gas tax was among the costliest policies through which former Progressive Conservative premier Grant Devine nearly bankrupted the province. Saskatchewan’s current fuel tax provides half a billion dollars annually. A six-month holiday would cost a quarter billion.

Manitoba’s NDP government enacted a six-month gas tax holiday, but recently extended it at great cost. Supposedly temporary tax holidays often become ongoing drains on public finance.

In 2020, Saskatchewan “temporarily” reduced its tax rate on the first $600,000 of annual profit for Canadian-controlled private corporations to one per cent. In 2025, this rate was scheduled to return to two per cent — matching Alberta and BC, while staying below Ontario and Quebec’s rate of three per cent.

But the Saskatchewan NDP, and eventually also the Saskatchewan Party, promised to keep the small business rate at only one per cent. While there are valid concerns about local businesses struggling, a lower tax rate on profits only helps to the extent they are already profitable.

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This tax break is a boon to high-income professionals like doctors and lawyers, who can incorporate their practices to turn their personal income into “small business” income.

The promise was estimated to cost relatively little in forgone corporate tax, but inducing more people to incorporate could cost far more in lost personal income tax.

Saskatchewan should reduce the amount eligible for the small business rate below $600,000. No other province extends this preferential rate beyond $500,000.

We should consider Quebec’s approach of making it available only to small enterprises that provide more than 5,000 hours of paid employment.

Knocking on doors in October, I heard many serious concerns about education and health care. Some people asked pointed but reasonable questions about how the NDP would pay for its promises. I did not meet a single voter clamouring for a gas tax holiday or lower business taxes.

New Democrats have always been strong advocates for education and health care. We also need a solid plan to pay for these important public services, rather than tax gimmicks that could undermine them.

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Erin Weir is the former MP for Regina–Lewvan and was a volunteer canvasser in the recent Saskatchewan NDP campaign.

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