Fuel Cost Reduction

Res #: 21-06A
Number: 21
Year: 2006
Midterm: No
Expired: Yes
Responses Received: No
Departments: Saskatchewan Finance

Resolution No. 21-06A

WHEREAS, agriculture commodity prices are at an all time low; and

WHEREAS, the cost of fuel has escalated dramatically in the past few years; and

WHEREAS, a meaningful portion of the fuel costs are provincial and federal taxes;

THEREFORE BE IT RESOLVED, that SARM lobby the provincial and federal governments to immediately further reduce fuel costs to agricultural producers.

Response from Kirk McGregor, Acting Deputy Minister of Finance:

In recognition of the value of primary production to the provincial economy and in an attempt to lower farm input costs, the Government of Saskatchewan provides our primary producers with a Fuel Tax exemption on all marked diesel fuel and 80 per cent of the bulk gasoline purchased for farm in farm and other primary production activities. For 2006, the Government provided approximately $112 million in Fuel Tax exemptions to our primary producers.

As well, Saskatchewan provides these same producers with PST exemptions on major farm inputs, including implements, machinery and associated repairs, as well as on inputs such as seed, feed and fertilizer. These exemptions are estimated to have provided primary producers with an additional $168 million in tax relief for 2006. It should be noted that increases in retail motor fuel prices do not result in increased tax revenue for the Province of Saskatchewan. Our Fuel Tax rate of 15 cents per litre on gasoline and diesel remains the same regardless of the retail price and has not changed since 1993.