The province said Wednesday in a budget release that a “number of clarifications” will be made to its Provincial Sales Tax (PST) Regulations effective April 1 relating to “farming and agriculture activities.”

Noting such lists are reviewed each year, a finance ministry spokesperson said Thursday the changes being made are “relatively small” in terms of reduced provincial tax revenue, at about $1 million per year.

The list of items and activities to be specifically included in the list of on-farm PST exemptions starting April 1 are expected to address concerns raised by producers over what they viewed as “PST creep.”

The province thus consulted with ag groups on what their members viewed to be “unfair or inconsistent” application of PST.

“While not significant in dollar value, these changes will clear up a number of issues included on these lists,” the ministry spokesperson said via email.

Items, services and activities to be specifically listed as PST-exempt for on-farm use starting April 1 include:

• corral slabs and windbreaker panels;
• insulators for electrified cattle fences;
• portable seed cleaning equipment, if used on-farm and not by for-profit operators of mobile custom seed cleaning services;
• certain chemical storage tanks and water storage tanks;
• crawler tractors, if to be used on-farm and not in the construction sector;
• on-farm digging of dugouts; and
• on-farm trenching for “certain irrigation and electrical purposes.”

The updates to the PST code will also further clarify the exemption for “certain farm equipment attached to a registered vehicle,” the ministry said.

The ministry said it also plans to start discussions with the goal of “modernizing” the agriculture and farming sections of the Provincial Sales Tax Act.

Those changes, the ministry said, may “potentially be considered by the government as part of the 2023-24 budget development cycle.” — Glacier FarmMedia Network

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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 Network

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The Agricultural Producers Association of Saskatchewan last Monday wrapped up its latest round of spring district meetings, at all six of which APAS general manager Duane Haave presented on the budget’s impact on farmers.

While the province characterized its budget as a bid to raise consumption taxes and cut back its reliance on dwindling oil and potash revenues, “there seems to be a desire among some people to pit urban against rural,” said Haave.

However, he said, in this budget, farmers are definitely sharing the pain.

APAS has estimated changes to provincial sales tax and the removal of farm fuel exemptions will cost Saskatchewan farms about $74 million annually, and $28.8 million of that increase will come from the government’s move to charge PST — which itself was raised to six per cent — on insurance premiums.

Farmers can often pay relatively more insurance than business owners in other industries, Haave said, noting insurance premiums for crops, livestock, hail protection, buildings, vehicles and other machinery, and income stabilization.

APAS has previously said a farm paying $100,000 in premiums alone isn’t out of the ordinary.

The province has also already estimated that ending farmers’ fuel tax exemption for bulk purchases of gasoline, and cutting farmers’ exemption for bulk diesel — both effective April 1 — will generate $40.2 million in extra fuel tax revenue.

APAS members, during their meetings, also discussed the budget’s planned elimination of the Saskatchewan Pastures Program, plus the province’s plan to sell its fleet of grain hopper cars.

APAS directors are consulting with affected members about those changes.

Other agricultural issues APAS members discussed at district meetings include Saskatchewan’s trespassing laws, changes to drainage legislation, the Canadian Grain Commission surplus and the federal government’s consultations on changes to cash purchase deferrals.

Each of the six APAS meetings closed with a presentation on climate change, including information about carbon emissions from crop and livestock production, Canada’s carbon reduction commitments and how much a carbon tax might cost farmers

Members are adamant that before a carbon tax is imposed, government must recognize the carbon sequestration that has come from changing farm management practices. “The taxes and recognition have to be together,” said APAS president Todd Lewis.

APAS directors plan to develop a carbon policy proposal at an upcoming “Carbon Policy Summit” on July 13-14 in Saskatoon.

— Leeann Minogue is editor of Grainews at Griffin, Sask. Follow her at @grainmuse on Twitter.

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The provincial government on Wednesday rolled out a budget designed to dial back the province’s reliance on resource revenue in the face of slumping markets for oil and potash, while substantially boosting provincial revenue from consumption taxes.

For farmers, one of the biggest changes in Finance Minister Kevin Doherty’s budget is the elimination of the tax exemption for bulk purchases of gasoline starting April 1, along with a cut in the related exemption for bulk diesel, down to 80 per cent of the purchase.

That measure alone, the province said, “impacts farmers and other primary producers and increases fuel tax revenue by $40.2 million.”

The cuts to farm fuel exemptions, the province said, “reflect the changing nature of farming and primary production operations and on-road and personal use of this fuel.”

Pre-budget discussion about farmers’ fuel tax exemptions had already spurred Todd Lewis, president of the Agricultural Producers Association of Saskatchewan (APAS), to write an open letter Monday emphasizing such exemptions “are not subsidies” for farmers.

The “vast majority of tax exempt fuel is not used on the provincial highway system, but is used for field work, or for hauling on the rural municipal roads that farmers already pay for through our property taxes,” he wrote.

“Tax exemptions for farm inputs and machinery do not cost any other taxpayer a nickel. Just like tax exemptions on children’s’ clothes or home heating do not cost anything to other provincial taxpayers.”

The province noted Wednesday it has lowered the educational property tax (EPT) mill rates for all classes of property, but reassessments and increased property values will amount to a 9.8 per cent increase in EPT revenue.

For agricultural property, the province said, the 2017 EPT mill rate will be 1.43, down from 2.67 in 2016, but EPT revenues from agricultural land are still expected to rise to $46.1 million, up from $39 million in 2016.

In a move affecting all Saskatchewan residents, provincial sales tax (PST) will rise to six per cent, from five, and various PST exemptions — such as for construction and renovation services, restaurant meals, snack foods and children’s clothing — will also end, effective April 1.

A PST exemption for insurance premiums will also end starting July 1, the province said.

Effective April 1, the value of a trade-in will also no longer be deductible in determining PST on the purchase of a new vehicle, though the PST exemption for used vehicles will continue.

Grain cars for sale

The province on Wednesday also set a request for offer (RFO) deadline of May 12 for buyers interested in the fleet of about 900 grain hopper rail cars owned by the Saskatchewan Grain Car Corporation (SGCC), as that operation is to be wound down.

“By selling the fleet now, the cars will still move Saskatchewan grain,” David Marit, the provincial minister for SGCC, said in a separate release. “At the same time, the province will get a higher return by selling the cars while they still have significant useful service life left.”

Saskatchewan’s 13 commercial shortline railways will be given “the first opportunity” to purchase the rail cars, the province said.

Under Association of American Railroads rules, the province said, rail cars can be interchanged between railways for up to 50 years, meaning SGCC’s cars have about 14 years of service life left. The replacement cost for SGCC’s original fleet of 1,000 cars is estimated at $100 million.

Pasture program ending

The province on Wednesday also announced it would end the 95-year-old Saskatchewan Pastures Program (SPP), which today oversees 51 pastures on about 780,000 acres.

An online survey will run starting Monday (March 27) until May 8, in tandem with consultations including stakeholders, First Nations and the Metis community, on how the affected pasture land should be managed in the future, the province said.

Set up in 1922, the SPP was developed to help Saskatchewan’s agriculture industry diversify by providing assistance to small cattle producers, but “the agriculture industry has evolved, as have the needs of producers, and the program is no longer necessary,” the government said Wednesday.

In 2015, the province said, the SPP supported about five per cent of the provincial cattle herd. Based on 2011 census data, about 12 per cent (1,300) of Saskatchewan cattle producers use the SPP.

Overall agricultural programming in Wednesday’s budget will see $264.1 million earmarked for business risk management (BRM) programs, up nearly four per cent, with $71.2 million for Growing Forward 2 “strategic initiatives,” $26.8 million for ag research and $172.2 million for crop insurance premiums and program delivery.

Among other changes announced in the budget, personal income tax rates will be cut in half-point increments in July 2017 and July 2019, as will general corporation income tax rates.

Sin tax hikes will see tobacco taxes rise by two cents per cigarette starting Thursday and wholesale markups rise on liquor — most notably by 6.8 per cent on most types of beer — starting April 1.

Milk containers will be added to the provincial beverage container recycling program starting April 1, allowing milk containers to be returned to SARCAN depots for refunds of a paid deposit. Deposits on most other types of containers, including cans, cartons and tetra paks, will also increase.

The province also announced it will wind down the Crown-subsidized bus company, STC, affecting 224 employees. Passenger services are to end May 31 and freight will be accepted for delivery until May 19. — AGCanada.com Network

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The province on Thursday announced the additions, effective Feb. 17, to its list of goods, equipment and services for which eligible farmers are PST-exempt.

Farmers wanting to claim the exemption at point of sale or lease will have to show a completed FIN 458 certificate of exemption, or a valid B.C. Farmer Identity Card.

If the certificate isn’t shown at that point, but still within 180 days, the supplier can refund or credit the PST charged. A farmer may also submit an FIN 355/FAF application to the province within four years of the purchase or lease date for a direct refund.

The province’s exemptions apply on “specifically listed” equipment — for example, tractors, combines or incubators — and on certain other goods, including fuels, crop inputs, equipment parts, livestock, seedlings and protective clothing, when used “solely for a farm purpose.”

The exemptions for skid steers and telehandlers — machines now both “commonly used in the agriculture sector,” the province said — will also apply on purchases of attachments “designed to be attached to them.”

The exemption for rigid plastic polycarbonate panels — now “becoming popular for greenhouse growers as an alternative to glass” — will be allowed only on purchases of at least 500 square metres, the province said. — AGCanada.com Network

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