Saskatchewan budget 2021‑22

* The rate on capital gains is one-half the ordinary income tax rate.
** The federal basic personal amount comprises two elements: the base amount ($12,421 for 2021) and an additional amount ($1,387 for 2021). The additional amount is reduced for individuals with net income in excess of $151,978 and is fully eliminated for individuals with net income in excess of $216,511. Consequently, the additional amount is clawed back on net income in excess of $151,978 until the additional tax credit of $208 is eliminated; this results in additional federal income tax (e.g., 0.32% on ordinary income) on net income between $151,979 and $216,511.

Personal tax credits

This budget proposes changes to the following personal credits/amounts:

• The budget confirms the introduction of the Saskatchewan Home Renovation Tax Credit, which provides a 2021 tax credit on eligible home renovation expenses up to $11,000 incurred between 1 October 2020 and 31 December 2021 and a 2022 tax credit on eligible expenses up to $9,000 incurred between 1 January 2022 and 31 December 2022. In each year, there is a $1,000 threshold before expenses are eligible for the tax credit.
• The budget reintroduces the Active Families Benefit, which provides a refundable tax credit up to $150 per child (increased to $200 for a child with a disability) on registration costs for cultural, recreational and sports activities. The credit is only available to families with a combined net income of $60,000 or less and is retroactively effective on 1 January 2021.

Other tax measures

Saskatchewan Technology Start-up Incentive

The budget extends the Saskatchewan Technology Start-up Incentive for five years through to 2025–26. This incentive provides a non-refundable 45% income tax credit for individual, corporate or venture capital corporation investments in eligible start-up businesses. The budget also extends the carry-forward period to claim unused tax credits from four years to seven years.

Natural gas taxation

The budget introduces a moratorium on royalties on natural gas associated with oil production by implementing a royalty rate of 0% for a period of five years commencing on 1 April 2021 and ending on 31 March 2026.

Oil taxation

The budget expands the High Water-Cut Program (HWCP) for a period of five years commencing on 1 April 2021 and ending on 31 March 2026. The HWCP reduces the royalty rate for eligible oil wells up to 2%.

Sodium sulphate taxation

The budget introduces a simplified system for sodium sulphate royalties by replacing the scaled production-based royalty with a 3% flat royalty rate, effective retroactively on 6 April 2020.

The budget introduces a credit for 10% of qualifying capital expenditures eligible for use against sodium sulphate royalties otherwise payable, effective retroactively on 6 April 2020.

Vapour product taxation

The budget introduces a Vapour Products Tax of 20% on the retail price of all vapour liquids, products and devices, effective on 1 September 2021.

Heat-non-burn tobacco product taxation

The budget introduces a tax rate on heat-non-burn tobacco sticks of 20.5¢ per stick, effective on 1 June 2021.

Electric vehicle taxation

The budget introduces an annual tax of $150 per passenger electric vehicle registered in Saskatchewan, effective for registrations beginning on 1 October 2021. This tax will be collected by Saskatchewan Government Insurance.

Property tax

The budget introduces increases to the Education Property Tax mill rates in line with year-over-year inflation.

Learn more

For more information, please contact your EY or EY Law advisor or one of the following professionals:

Ryan Ball
+1 306 649 8225 | ryan.ball@ca.ey.com

Craig Hermann
+1 306 649 8204 | craig.hermann@ca.ey.com

Wes Unger
+1 306 649 8247 | wes.unger@ca.ey.com

Luke Hergott
+1 306 649 8251 | luke.hergott@ca.ey.com