2023 Saskatchewan budget tax highlights
On March 22, the Saskatchewan government released its 2023 budget. The following are highlights of the key tax measures.
Personal tax measures
No personal income tax rate changes were announced in this year’s budget. The current personal combined income tax rates for 2023 are outlined below:
|
Personal (combined) federal and Saskatchewan top marginal tax rates |
|
|
|
Rate |
|
Interest/regular income |
47.50% |
|
Capital gains |
23.75% |
|
Eligible dividends |
29.64% |
|
Non-eligible dividends |
41.82% |
Saskatchewan Mineral Exploration Tax Credit (SMETC)
Effective Jan. 1, 2023, the SMETC, a non‑refundable personal income tax credit, triples to a rate of 30 per cent. Saskatchewan residents can invest in mineral exploration activities within the province by purchasing eligible flow‑through shares issued by approved mineral exploration companies. The SMETC is harmonized with the Government of Canada’s 15.0 per cent Mineral Exploration Tax Credit, as well as its 30.0 per cent Critical Minerals Exploration Tax Credit.
Graduate Retention Program
The program will continue to provide up to $20,000 in tax credits to post‑secondary students who remain in the province to work.
Corporate tax measures
No corporate income tax rate changes were announced in this year’s budget. The current corporate income tax rates for 2023 are outlined below:
|
|
Small business corporations |
General corporations |
||
|
|
Rate |
Threshold |
Non-M&P |
M&P |
|
Saskatchewan |
0.5% |
Up to $600,000 |
12.0% |
10.0% |
|
|
|
|
|
|
Small business tax rate reduction
The temporary small business tax rate reduction was extended in the summer of 2022, keeping the rate at zero per cent. The small business tax rate will return to one per cent on July 1, 2023, and two per cent on July 1, 2024.
Manufacturing and Processing (M&P) Exporter Tax Incentive
The refundable tax credit for eligible corporations is being extended by one year to Dec. 31, 2023. The extension will apply retroactively, effective Jan. 1, 2023.
- Hiring Tax Credit provides eligible corporations with $3,000 in non‑refundable tax credits for each incremental full‑time employee
- Head Office Tax Credit provides eligible corporations with $10,000 in non‑refundable tax credits for each incremental full‑time “head office” employee
Eligible corporations are those that export outside of Saskatchewan at least 25.0 per cent of their manufactured goods annually and:
- Manufacture or process goods for sale, as defined in the federal Income Tax Act; or,
- Are principally involved in commercial development of new economy products for export, including interactive digital media products and creative industry products
Provincial Sales Tax (PST) measures
Per the 2023 budget, the following initiatives are now exempt from the PST:
- Labour to repair and install exempt medical equipment
- Farm equipment: storage buildings when specifically used for storing produce (fruits and vegetables) grown commercially, and boats with attached harvesting equipment when primarily used in rice farming
- Geothermal drilling rigs: rigs used for commercial geothermal drilling
Next steps
Contact your Baker Tilly advisor to learn more about how we can help you navigate the complexities of the Canadian tax system.
Meet the Author
Brenda L. Scott
Information is current to March 23, 2023. The information contained in this release is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.