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Provincial budget hits rural Sask. hard

Posted on March 28, 2017 by Maple Creek

By Murray Mandryk

Like everyone in the province, rural Saskatchewan took a solid hit on budget day.

Maybe it wasn’t the hit for farmers some thought it would be. But make no mistake, farmers, too, took a big hit.

Of course, Finance Minister Kevin Doherty didn’t exactly have many pleasantries for anyone in the 2017-18 Saskatchewan budget.

Having to deal with a 2016-17 deficit that has crept past $1.3 billion, according to the third quarter update that was finally released, desperate times called for desperate measures.

One can rightly blame a fall in resource prices, as Doherty and Premier Brad Wall have frequently done.

But one can rightly blame a decade’s worth of questionable Saskatchewan Party government decisions, including doubling government spending to $14 million from $7 million in the 2006-07 budget.

Certainly, Wall offered somewhat of an admission in his pre-budget Facebook post before last Wednesday’s budget that vowed the financial plan would be all about getting a hold of spending.

Well, Wednesday’s budget was all about that, but it was also about significant tax increases including a general increase in the provincial sales tax to six per cent from five per cent and a significant broadening of the tax to include restaurant meals and snack foods, children’s clothing, and even things like insurance premiums, construction services and permanently mounted resource sector equipment buy clothes.

To the surprise of many, the Sask. Party decided to continue on with its now $193-million annual PST exemption on fertilizers, pesticides and seeds and now $100 million annual PST exemption on farm machinery and repair parts.

But there may have been some good reasons for that.

If Saskatchewan did that, it would be first province to tax such farm inputs. That, undoubtedly, would lead to farmers cross-border-shopping in Alberta and Manitoba to get deals on fertilizers, pesticides and machinery – something that wouldn’t have bode well for already-struggling rural Saskatchewan communities.

Doherty admitted his government did think long and hard on this one. Clearly, this is one occasion where the Sask. Party’s strong rural caucus paid dividends.

And it wasn’t as if farmers came out unscathed.

Doherty’s budget eliminated the exemption of PST on bulk farm gas and reduces the exemption of bulk farm diesel fuel to 80 per cent.

Farmers are also taking a hit on their pastureland program and the hits to rural people were hard and fast.

While there is no doubt the Saskatchewan Transportation Company was underutilized and bleeding money, its abrupt closure was a body blow to drivers and, more critically, its remaining passengers and parcel users.

Local credit unions now being treated like local banks is a further blow to the fabric of rural communities that might very well lead to more closures in places struggling to keep life on their main streets.

The loss of the rink affordability program is another small thing that means big things in small towns and villages, far more than it means in cities capable of weathering tough times.

And while city people sometimes don’t think in these terms, people on farms and in small towns do pay the same PST, need to buy children’s clothes and go out for restaurant meals.

Admittedly, when you’re a rural municipal whose source of funding is the one percentage point of the sales tax, it’s more than a little ironic your biggest economic activity still enjoys the biggest PST exemptions in the province.

It’s more than ironic when the government is scrambling for every nickel it can get it’s hands on to deal with a $685-million deficit and two more deficits to come.

Whether you live on a farm, small town or city, you all took a big hit in this year’s provincial budget.

There was no just escaping it.

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