Political parties make scores of promises every election year. Some make sense; a few are nothing other than an attempt at bribery.
Under the Criminal Code of Canada bribery is illegal, but we allow our politicians to continue to bribe us.
One of the promises in the current provincial election campaign makes no sense at all, other than a gift to supporters. It’s the Saskatchewan Party promise to reduce the three per cent provincial small business corporation tax to zero for two years.
Premier Scott Moe called it an assist to 31,000 small businesses during this pandemic. The promise is more like an feeble attempted breakaway.
The small business tax applies to the first $600,000 on taxable income earned. The maximum tax savings for any small business will amount to $18,000 a year.
First of all, profits will be scarce. Giving income to profitable businesses does nothing for those struggling to survive. The rich get richer.
The saving isn’t even enough to hire an additional employee at this province’s low, low minimum wage. Nor can it do much else except act as a cash gift to small business owners, most of whom make nowhere near the $600,000 for maximum exemption.
Any business that faces going under without this $18,000 tax break is probably on the skids headed for creditor protection anyway.
This promise wouldn’t pass a cost-benefit study on economic impact or on increased productivity or job creation.
This $189 million that Moe expects to lose in revenue would be better spent on programs to stem continued effects of the pandemic next year.
Members of the farm community will be one of the major beneficiaries of this tax break. The 2016 Census of Agriculture showed about 9,400 Saskatchewan farmers were incorporated. That’s almost one-third of small businesses getting the Saskatchewan Party favour.
Since 2016 there has been a successful drive by the province to have farmers incorporate and save taxes, so the farmer numbers benefitting from the tax break are certainly much higher than 9,400.
Farmers are the most insulated sector of the Canadian economy with a crop insurance plan where farmers pay only 40 per cent of the premiums.
They have a government funded stability fund that pays out when income falls below average levels. And farmers have a government run savings plan for hard times, not to mention provincial sales tax breaks on fuel, fertilizer and other inputs.
Sure, there are concerns with some of these programs but at least farmers have a safety net.
Lest anyone think this column is picking on agriculture: the Canadian economy shrank by 10 per cent in the first six months of this year with some sectors — food services, accommodation, tourism — losing 60 to 90 per cent of revenues. Meanwhile, farm incomes increased 1.5 per cent.
If I was a farmer I’d be embarrassed to receive this gift.
Moe would be much fairer by targeting hard hit sectors instead of a broad tax cut.
We need a secure food supply but how much more do other taxpayers have to give up?
___
Two other promises that make the no sense category: the NDP promise to give motor vehicle owners a break on SGI premiums and the Saskatchewan Party promise to reduce utility charges.
The Crown Corporations should be run like businesses and be left out of election bribery politics.
Ron Walter can be reached at ronjoy@sasktel.net
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
