HAUBRICH: Time to permanently end Saskatchewan's small business tax

Gage Haubrich is the Prairie Director for the Canadian Taxpayers FederationRunning a business is hard during the best of times. It’s even harder when tariffs, high taxes and years of inflation balloon your costs. That’s why the Saskatchewan government must continue to help small businesses and permanently end the small business tax in its next budget.The government originally cut the rate from two to zero per cent during the pandemic. It planned to increase the tax back to two per cent after three years.“Lowering taxes for every small business in our province over the next three years will help them to recover from the pandemic and enable them to retain and hire more workers,” said former finance minister Donna Harpauer in 2020.That isn’t just true during a pandemic, it’s true during any time of economic uncertainty. The government hiked the tax from zero to one per cent on July 1, 2023. It then paused the increase from one per cent to two per cent for one more year in last year’s budget. Temporarily stopping a tax hike is a slight relief for small businesses, but planning to hike it in the future was still the wrong move.Premier Scott Moe started to right that wrong by promising to freeze the tax at one per cent permanently during the last provincial election campaign. Moe made good on that promise shortly after the election by passing The Saskatchewan Affordability Act.But Moe needs to go further and scrap the small business tax permanently. Axing the tax is the right move for Saskatchewan. It would help grow the economy and save 35,000 Saskatchewan small businesses $3,600 a year.Those 35,000 businesses employ Saskatchewanians across the province. Almost a third of all workers in Saskatchewan, or about 150,000 people, work for a small business. A tax cut for small businesses helps every community.Low taxes save businesses money and help them deal with economic trouble. And with American tariffs coming into force, economic troubles are all but guaranteed.These savings are a big deal for businesses trying to make ends meet, but it’s barely a rounding error for the government.At one per cent, the government expects to bring in about $56 million per year from the small business tax. That means keeping the small business tax only increases overall government revenue by less than a third of one per cent.The government can afford to give back less than one per cent of its revenue to help businesses. And businesses can put that money to much better use than the provincial government. That’s because cutting taxes is an investment for the province. Lower taxes mean small businesses have more money to expand their operations and hire new employees. That means economic growth. And the more economic growth there is, the better off Saskatchewan is.Axing the small business tax also makes Saskatchewan more competitive with its neighbours. It would mean Saskatchewan’s small businesses would be paying two percentage points less in tax than small businesses in B.C. and Alberta. Eliminating the tax would also tie Saskatchewan with Manitoba, which has a zero per cent small business tax rate.Low taxes won’t just help businesses already in Saskatchewan. It will also help encourage entrepreneurs from Calgary or Vancouver to set up shop in Saskatchewan and employ more Saskatchewanians.Freezing the small business tax at one per cent was the right first step. Now the Moe government must take the next step and get rid of the small business tax for good in the next budget.Gage Haubrich is the Prairie Director for the Canadian Taxpayers Federation.

HAUBRICH: Time to permanently end Saskatchewan's small business tax

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