Last updated: Oct. 8, 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.