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Saskatchewan Budget Report 2021

Last updated: Apr. 12, 2021 

On April 6, 2021, Saskatchewan Finance Minister Donna Harpauer presented the province’s fiscal 2021-22 budget.

We’re seeing exactly what we expected in this budget – an increase in health care spending to fight the pandemic. The province is also putting more money towards education, social services, child care and capital projects. Otherwise, Saskatchewan’s budget is relatively quiet from a tax perspective. There are no changes to the personal tax rate and no increase to the PST.

On the small business side, the province announced last year it will temporarily reduce the corporate tax rate from 2% to 0% until July 1, 2022. On this date, it will bump up to 1% and go back to the original rate of 2% on July 1, 2023. The province is also extending the Saskatchewan Technology Start-up Incentive. No new support programs were announced for small businesses.

We outline the measures in the budget that may impact you and your small business below.

Saskatchewan Technology Start-up Incentive

The province is extending the Saskatchewan Technology Start-up Incentive (STSI) for five years. This program encourages investment in early-stage tech start-ups in Saskatchewan. It’s a win-win for businesses that need capital and investors looking for more opportunities in the province.

The incentive is in the form of a 45% tax credit for individual, corporate or venture capital corporation investments in eligible start-up businesses.

If you’re hoping to invest and take advantage of the tax credit, you must be based in Saskatchewan and be an accredited investor.

If you’re a business looking for angel investors and want to register in the program, your business must:

  • Have fewer than 50 employees, including full time, part-time, and contract workers. At least 50% of these employees must be based in Saskatchewan;
  • Have a permanent establishment in Saskatchewan;
  • Have not previously raised more than $5 million in equity capital; and,
  • Be a technology-based startup with a novel technology for sale or under development for sale as a new product or service. The technology can be from any industry.

Read the full eligibility details on the Saskatchewan government website. Note that founders are not eligible to invest in their own company.

 Personal Tax Measures

 Personal income tax rates in Saskatchewan

As mentioned above, there are no changes to the personal income tax rate in this year’s budget.  Saskatchewan’s personal income tax rates are set out below. 

Personal Combined Federal/Provincial Top Marginal Rates
  2020 2021
Interest and regular income 47.50% 47.50%
Capital gains 23.75% 23.75%
Eligible dividends 29.64% 29.64%
Non-Eligible dividends 40.37% 42.29%

 

Personal tax credits for 2021 will be indexed by 1.010%. The maximum tax credit amounts and actual Saskatchewan tax credits for 2020 and 2021 are set out below.

 

Saskatchewan Non-Refundable Tax Credits
2020 2021
 

Maximum Amount

Saskatchewan

Tax

Credit

 

Maximum Amount

Saskatchewan

Tax

Credit

Basic Personal Amount $16,065 $1,687 $16,225 $1,704
Spousal Amount 16,065 1,687 16,225 1,704
Eligible dependent amount 16,065 1,687 16,065 1,704
Age amount 4,894 514 4,943 519
Infirm dependent amount 9,464 994 9,559 1,004
CPP Contributions 2,898 304 3,166 332
EI Contributions 857 90 890 93
Pension income amount 1,000 108 1,000 105
Disability amount 9,464 994 9,559 1,004
Disability supplement 9,464 994 9,559 1,004
Tuition amounts N/A N/A  
Adoption expenses N/A N/A
Medical expenses Variable Variable Variable Variable
Medical expenses (other dependents) Variable Variable Variable Variable
Caregiver amount 9,464 994 9,559 1,004
Interest on student loans Variable Variable Variable Variable
Donations & Gifts

-first $200

– over $200

 

200

75% of income

 

22

Variable

 

200

75% of income

 

22

Variable

In general, credits are multiplied by 10.50% to arrive at the deduction from Saskatchewan Tax.  In the case of donations and gifts over $200, the credit is 15%

Corporate tax measures

Saskatchewan corporate tax rate

As we mentioned, last year the province announced the corporate tax rate would drop temporarily from 2% to 0% as of October 2020.

This tax relief will end on June 30, 2022, when the tax rate will bump up to 1%. It will return to 2% as of July 1, 2023.

No changes are proposed to the $600,000 small-business limit, which was increased from $500,000 in 2018.

 

 Saskatchewan’s corporate tax rates is as follows:

  Rates
2020 2021
Sask Federal & Sask

Combined

Sask Federal & Sask

Combined

Small-business tax rate   2.0% 11/17% 0.0% 9/15% **
General manufacturing and processing tax rate*   10% 25% 10% 25%
General corporate tax rate*   12% 27% 12% 27%

* Rates represent calendar-year rates unless otherwise indicated.

** Saskatchewan is temporarily reducing its small-business rate from 2.00% to nil, effective for the period commencing 1 October 2020 and ending on 30 June 2022. The small-business rate will increase to 1.00% effective 1 July 2022 and return to a rate of 2.00% on 1 July 2023.

Contact FBC

Have questions about this or other COVID-19 programs for Canadian businesses? Unlimited consultation related to tax matters is a key benefit of FBC Membership. We’re offering a free consult where we get to know your business and determine next steps on saving you time and money. Book your appointment online.

You can also visit our COVID-19 Resource Centre for the latest information on Canadian small business grants and other resources that will support you and your business throughout this crisis.