Saskatchewan’s provincial government has reinstated a provincial sales tax (PST) exemption for agriculture, health and life insurance premiums.
Premier Scott Moe on Monday announced the exemption will take effect retroactive to Aug. 1 last year, when the PST was first applied to insurance.
The province said the exemption will include PST on premiums paid for crop, livestock and hail insurance, individual and group life and health insurance and disability, accident and sickness insurance.
The provincial finance ministry said Monday it will work with the insurance industry to sort out by April 10 how it will refund PST paid on insurance premiums to date.
The PST exemption for insurance premiums was one of several removed by then-finance minister Kevin Doherty in his budget last March, when the PST was hiked to six per cent. The tax on insurance premiums had originally been booked to take effect July 1 but was later delayed a month.
In the lead-up to the Saskatchewan Party’s convention last month where he was picked to replace Premier Brad Wall, Moe and three of the other four candidates had pledged to reverse the tax on insurance premiums.
“We already have evidence from crop insurance, for instance, that the number of insured acres has slightly decreased,” Moe had said before the convention, in response to a candidate survey by the Financial Advisors Association of Canada. “This is likely the case for other insurance products as well.”
Removing the tax on insurance premiums is expected to cost the province $65 million in 2017-18 revenue, and $120 million for 2018-19, the government said Monday.
Moe said Monday those costs can be accommodated in the government’s three-year plan to balance the budget by 2019-20.
PST was also placed on previously exempt sectors such as construction and renovation services, restaurant meals, snack foods and children’s clothing in last year’s budget. The sales tax remains in effect on those goods and services.
“Even today, as he flip-flops on some of those unfair tax cuts, he is standing by others that are costing jobs and raising the price of everything from kids’ clothes, and food and drinks to home insurance,” Cathy Sproule, finance critic for the opposition New Democrats, said in a separate release Monday.
Saskatchewan has booked a decrease of $2.4 million in food and beverage sales compared to this time last year, while every other province experienced growth, the NDP said. — AGCanada.com NetworkTagged crop insurance, hail insurance, insurance premiums, livestock insurance, PST, retroactive, sales tax, saskatchewan, Scott Moe