Inflation, tax increase put pressure on Saskatchewan's low-income residents: economist

Consumer prices in Saskatchewan increased 3.4 per cent from December 2016 to December 2017, the highest rate of inflation compared to other provinces in the country.

Sask. had country's highest rate of inflation from December 2016 to December 2017

Demand for the food bank increases during economic downturns. (Victoria Dinh/CBC)

Consumer prices in Saskatchewan increased 3.4 per cent from December 2016 to December 2017, the highest rate of inflation among Canadian provinces, according to the latest data from Statistics Canada.

A large factor in the increase in prices is the 2017 provincial budget, which raised taxes by one percentage point, from five to six per cent — resulting in about $1 billion in new taxes.

"The question is less should we be overly worried about inflation," said economist Trevor Tombe, "it's a separate conversation about whether or not there are sufficient supports for lower-income households."
Economist Trevor Tombe says the challenge for low-income earners in Saskatchewan is 'an increase in [the] PST rate and broadening the number of goods the PST applies to.' (Jeff McIntosh/Canadian Press)

The issue, according to Tombe, are the changes included in Saskatchewan's 2017 budget — "an increase in [the] PST rate and broadening the number of goods the PST applies to."

Low-income households are hit harder than others, because consumption counts for a larger share of lower-income household budgets.

While a low-income tax credit was also increased, it wasn't enough to fully compensate for the PST increase for many. Adults now receive an additional $100 per year, and children an additional $40 per year.

Food bank feeling pain

The Saskatoon Food Bank and Learning Centre now sees 20,000 people a month as part of its emergency food basket program.

Three year ago, the same program attracted about 15,000 people a month.

"Increasing numbers of students and seniors are using our program, and also working families. It's increasingly difficult to make ends meet on a minimum wage job, or two," said the food bank's executive director, Laurie O'Connor.
Laurie O'Connor says 5,000 more people are using the Saskatoon Food Bank and Learning Centre's emergency food kits than three years ago. (Victoria Dinh/CBC)

Clients are also feeling the pain of Saskatchewan's difficult job market.

"We see a lot of interest in our learning program so we know people are struggling to find work, but want to find work," said O'Connor.

Between the sales tax burden and the lack of jobs in the region, O'Connor believes the government needs to step up — at all levels.

The federal government and provincial governments have released poverty reduction strategies, but so far no strict timelines for the elimination of poverty have been attached to either.

"We need a more fulsome strategy — when they want to reduce and eliminate poverty by, and how we will keep ourselves accountable to those targets," said O'Connor.

Corrections

  • An earlier version of this story identified the executive director of the Saskatoon Food Bank and Learning Centre as Lori Williams. In fact, Laurie O'Connor is the food bank's executive director.
    Jan 27, 2018 12:34 PM CT

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