Saskatchewan’s government is continuing a tax measure that’s gone relatively unnoticed since it was introduced in last year’s budget.
The move — summarized in a sentence on page 10 of this year’s budget — again suspends the indexation of income tax brackets, meaning tax brackets are not rising with inflation.
Indexation of tax brackets is a measure that ensures income tax thresholds are kept in line with inflation.
The Canadian Taxpayers Federation said Tuesday the province’s move means people could end up moving into higher tax brackets as inflation pushes up the cost of living and incomes. Over the long term, it could mean higher tax bills.
“In any given year, it’s probably $20, $30 or $50, but, over time, that adds up,” said the federation’s Todd MacKay.
Finance Minister Donna Harpauer said the government has not ended indexation, but put it on pause.
“Our commitment is there to have as low as possible personal income tax. However, our commitment is also to balance the budget,” she said Tuesday. “So this is paused for now, and we will see what the future years bring.”
Harpauer also stated Saskatchewan is very competitive when it comes to taxes and said people in the province pay lower income taxes than a decade ago.
The government will keep revisiting the issue with each and every budget, she said.
