Saskatchewan rejects harmonized sales tax

(Jan. 28/08) In a move applauded by CRFA and local operators, the Saskatchewan government has ruled out the idea of harmonizing the provincial sales tax (PST) with the federal goods and services tax.

A 10% harmonized sales tax would have applied to all goods and services, including those currently exempt from PST.  Consumers would be left paying more for children’s clothing, utilities, restaurant meals and many other items.

Saskatchewan Finance Minister Rod Gantefoer announced Jan. 23 that the provincial government would reject a proposal from the federal government on the grounds that harmonization would negatively impact Saskatchewan residents:

"There was nothing further forthcoming.  A similar review was done by the previous administration … there was just not anywhere close to enough dollars made available for us to significantly offset the impact on our consumers. So the offer was rejected."

The federal government’s proposal included a one-time offer of $180 million to help cushion the blow for consumers, who were expected to be saddled with an additional $400 million annually in taxes if harmonization went through. 

In December 2007, CRFA met with the Minister of Finance to outline the industry’s concerns about harmonization and to ask government to consider the impact harmonization would have on Saskatchewan consumers.

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