The Canadian Union of Public Employees says a report it commissioned states that the proposed tax changes in Saskatchewan's 2017-2018 budget disproportionately affect low income people and women, while the province's highest income earners face little change.

CUPE released the report, titled Out of Balance: Saskatchewan's 2017-18 Budget, on Wednesday. 

The report says the tax changes are regressive because those with lower incomes would pay a greater proportion of their income in taxes, compared with those with the highest incomes.

Sales tax increase

It labelled the increase in provincial sales tax, to six per cent from five, as one of the most substantial. PST has also been extended to items such as insurance premiums, snack foods, children's clothing and restaurant meals, which is expected to raise government revenue by $647.1 million.

In total, the government said it would rake in $900 million in extra tax revenue with the changes. 

By 2018, CUPE says, individuals with an income between $33,100 and $43,000 will likely pay $200 more in taxes. Those who make more $112, 400 will be least affected, when the amount is considered as a portion of their income. Their taxes would increase by about $500.

"The tax changes proposed by the government disproportionately affect those who are least able to pay," said Robin Shaban, the economist who authored the report. "Meanwhile, Saskatchewan's highest-income earners face very little change in the taxes they pay, relative to how much they earn.

"Some of Saskatchewan's high-income earners may even enjoy a tax cut in the coming year."

In an emailed statement, government spokesperson Kathy Young said CUPE had recommended a PST increase of one or two percentage points before the budget was released.

"In the 2017-18 Budget we wanted to ensure Saskatchewan's taxes remain fair and competitive to keep the economy strong," Young wrote. "A more stable revenue base will help sustain valued services like healthcare, education, social assistance and capital investment."

Who will pay what?

If the Saskatchewan government's tax changes are fully implemented, CUPE says, the typical family that earns between $17,800 and $24,100 will see a tax increase nearly equal to the the tax break that families with incomes over $186,700 will receive.

The report says that by 2020, those making less than $25,000 will face the biggest tax increase, while those over $68,100 will see their their taxes cut.

According to the report, it gets better for higher income earners: An executive with Potash Corp. who makes about $4 million annually will pay $30,000 less to the government.

Kevin Doherty

Saskatchewan's Minister of Finance Kevin Doherty announced in the spring that provincial sales tax would be added to things that were previously exempt such as children's clothing and footwear. (CBC)

As of July 2019 corporate income taxes as a whole will be reduced by one percentage point. With that, Saskatchewan will become the province with the lowest corporate tax in the country.

CUPE says the inequity of the tax changes proposed by the government is shocking when gender is considered. It says 62.2 per cent of people who earn less than $11,100 are women.

"Women are significantly underrepresented in the high end of the income distribution and make up the majority of people who are in the lower-half of the income spectrum," Shaban said. "Since the tax changes of the Saskatchewan Party government are regressive, it follows that these changes will more negatively impact women."

Will tax credits help?

The provincial government has said it will be enhancing low-income tax credit to offset these changes, but CUPE says it is not enough.

As of July 2017, the Saskatchewan government will provide an added $100 for adults and $40 per child (up to two children) for families that do not make enough to have to pay taxes. CUPE said families that make between $44,900 and $57,700 will receive $31, while families with incomes over $57,700 will see no benefit.

As of 2018, tax brackets will no longer be indexed to inflation. It means relatively minor cost-of-living increases could bump some marginal income into a higher tax bracket.

Sales tax hikes have been offset somewhat by lower income tax rates. For example, personal income tax rates dropped by half a percentage point on July 1, and are set to go down by another half percentage point two years from now.