2022 Saskatchewan provincial budget tax highlights

On March 23, the Saskatchewan government released their 2022 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 2022 are outlined below:

Saskatchewan Home Renovation Tax credit

The continuation of the Saskatchewan Home Renovation Tax credit provides a 10.5 per cent tax credit on up to $20,000 of eligible home renovations done between October 1, 2020 and December 31, 2022.

Saskatchewan homeowners may save up to $1,155 in provincial income tax for 2021 by claiming a tax credit on eligible home renovation expenses incurred between October 1, 2020 and December 31, 2021. A further $945 in savings may be claimed for 2022 in respect of eligible expenses incurred between January 1, 2022 and December 31, 2022.

Corporate tax measures

No corporate income tax rate changes were announced in this year’s budget. The current corporate income tax rates for 2022 are outlined below:

* The tax rate for small business corporations is 9.5 per cent for taxable income up to the federal threshold of $500,000. The tax rate then becomes 15.5 per cent for taxable income between the federal and the provincial thresholds ($500,000 to $600,000).

**The small business corporate income tax rate will return to 1 per cent on July 1, 2022, and to 2 per cent on July 1, 2023.

Saskatchewan Value-added Agriculture Incentive (SVAI)

Retroactive to the origin of the program in 2018, the government is increasing the 15 per cent tax credit rate for higher levels of investment, as follows:

• 15 per cent on the portion of a project up to $400 million;
• 30 per cent on the portion of a project between $400 million-$600 million; and,
• 40 per cent on the portion of a project in excess of $600 million in value.

The overall dollar value of the tax credit will be capped at $250 million.

Saskatchewan Technology Start-up Incentive (STSI)

Effective April 1, 2022, the Saskatchewan Technology Start-up Incentive (STSI) is being enhanced by increasing the tax credit cap from $2.5 million to $3.5 million. The STSI provides a non-refundable 45 per cent income tax credit for individual, corporations or venture capital corporations investing in Eligible Start-up Businesses (ESBs) that are developing new technologies, or applying existing technologies in a new way, to create proprietary new products, services or processes that are repeatable and scalable.

Other tax measures

Tobacco products

Effective March 24, 2022, the tobacco tax rates increase from 27 cents to 29 cents on cigarette sticks, from 27 cents to 35 cents per gram of loose tobacco (chew and roll-your-own tobacco), and from 20.5 cents to 21.8 cents on heat-not-burn sticks.

Vapour Products Tax (VPT) exemption in Lloydminster

Effective March 24, 2022, The Lloydminster Provincial Sales Tax Exemption Regulations are amended to add the recently introduced Saskatchewan VPT to the list of tax-exempt purchases within the City of Lloydminster.

Education Property Tax (EPT) mill rates

Education Property Tax (EPT) mill rates are being adjusted slightly for 2022. EPT mill rates for the various property classes will be:

• Agriculture 1.42 per cent;
• Residential 4.54 per cent;
• Commercial/Industrial 6.86 per cent; and
• Resource 9.88 per cent.

Provincial sales tax measures

Admissions and entertainment

Effective October 1, 2022, Provincial Sales Tax (PST) is being applied to admission and entertainment charges, which include but are not limited to:

• Admissions to sporting events, concerts and shows, movie theatres, museums, zoos and historical sites;
• Admissions to fairs, rodeos, trade shows, arts and crafts shows;
• Admissions to conferences and seminars;
• Professional theatre tickets and subscriptions;
• Gym, golf and curling fees and memberships; and,
• Hunting and fishing guide fees and outfitter services.

There will be exemptions for certain situations including:

• Admissions to school, university or minor league sports and amateur theatre productions where the events are put on by a public sector body and do not feature paid participants;
• Fees for recreational programs such as hockey, dance or music where the activities are provided by school or non-profit organizations for those 14 years of age and under; and,
• Fund-raising events where part of the cost of admission can reasonably be considered a donation to a charity.

Audiobooks

Effective April 1, 2022, the province is exempting audiobooks from PST to provide consistency with non-taxation of eBooks.

Other measures

Video Lottery Terminal (VLT) site commission rate

Effective April 4, 2022, the government is increasing the VLT site commission rate from 15 per cent to 18 per cent.

Takeover of federal carbon tax backstop fuel charge

A proposal is being developed to take over administration of, and all revenues from, the federal carbon tax backstop fuel charge. If successful in the proposed approach, the government will announce a plan in the fall of 2022.

Next steps

Contact your Baker Tilly advisor to learn more about how we can help you navigate the complexities of the Canadian tax system.