October 5, 2022

With respect to the SARM’s expiring resolution on the application of the Provincial Sales Tax (PST) on municipal infrastructure capital projects and capital equipment costs, I note that the 2017-18 Budget expanded the PST base to include the full value of improvements to real property, including construction services. That change was part of a comprehensive initiative by the Government to begin a shift away from over–reliance on volatile natural resource revenues, and towards more stable revenue bases, such as the PST. 

The reforms to the taxation of contracts and services for the construction, repair, renovation, or improvement to real property included the removal of PST paid by contractors on building materials, improving cash flow for contractors and also improving their competitiveness without­ of-province contractors. In this respect, the PST is now similar to the application of the federal Goods and Services Tax (GST), although the PST does not apply to the purchase of land, as the GST does. 

I would also note that Saskatchewan’s PST is a tax of general application, applied to a broad base of goods and services. This broad application ensures that a fairly applied, reliable, and sustainable source of revenue is available to finance the many public services provided by the Government, including grants to the municipal sector, health care, and education. 

The Honourable Donna Harpauer – Deputy Premier and Minister of Finance, Ministry of Finance