Saskatchewan opts for the controversial booze-and-smokes tax

REGINA – Drinkers and smokers will pay more and businesses will have to wait longer for a tax cut so that Saskatchewan’s budget can stay in the black.

“I’m sure the two-pack-a-day smokers will not be pleased,” Finance Minister Ken Krawetz said Wednesday before he tabled the 2013-14 financial plan.

“It’s not out of line with what other provinces have. I think we’re going to be one of the highest — if not the highest — at 25 cents (provincial tax) per cigarette. On the alcohol side, the markup … is not that significant.”

The tobacco tax was to increase at midnight and is expected to bring in $47.5 million from the four-cent increase per cigarette. The alcohol increase of about three per cent — which kicks in April 1 — is expected to generate $10 million in revenue.

The measures are necessary because the province is facing falling revenues from non-renewable resources, such as oil and gas or potash.

“It’s no secret that resource revenues are down,” said Krawetz.

“To achieve a balance, our government had to control spending and this budget does just that with a modest overall spending increase of just 3.1 per cent.

“To get there, we needed to make some choices. This may mean some groups in our province have a little smaller funding increase than they might have hoped for.

“Sometimes decisions have to be delayed.”

For example, a promise by the government last October to cut the corporate income tax rate to 10 per cent from 12 per cent by 2015 is being postponed.

The business tax cut was intended to bring Saskatchewan’s rate in line with those in Alberta and British Columbia. But the province can’t afford to give up the $175 million the tax generates, Krawetz said.

He couldn’t say when the cut might come, but said it will happen.

“There’s no reconsideration underway, but as the premier and I have stated, any of these initiatives will be implemented when they’re sustainable and affordable within a balanced budget.”

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