The Saskatchewan government has announced hefty property tax cuts and $1 billion in infrastructure spending to help support the province through the economic downturn.

In Saskatchewan’s 2009-2010 provincial budget, tabled on Wednesday, the government forecasts a surplus of $424.5 million.

“This budget is designed to keep Saskatchewan’s economy strong and steady in the face of the current global economic crisis,” Finance Minister Rod Gantefoer said. “We will do so by delivering significant property tax relief, by delivering another $1 billion to build provincial infrastructure, and most importantly, by delivering a balanced budget.”

The budget includes a 14% cut to the property taxes that go towards education funding.

“Current property tax levels are putting a high burden on Saskatchewan taxpayers and placing Saskatchewan communities in a competitive disadvantage,” the budget says.

The cut, worth $103 million in 2009, represents the largest education property tax cut in a single year in the province’s history. The amount paid by taxpayers will fall by another $53 million in 2010.

As an example, a Regina homeowner with a 2008 taxable assessment of $200,000 will pay $306 less in education tax in 2009 and another $151 less in 2010 – a total tax cut of $457 or 15.4%.

Saskatchewan’s Education Minister, Ken Krawetz, said property taxpayers have been paying a disproportionately high amount of the cost of education in the province.

“Today, we are striking the proper balance,” Krawetz said.

The Saskatchewan government still plans to increase education spending by 2.1% this year. It will offset the loss in revenue by boosting the proportion of funding it provides for education operating costs to 63% this year, from 51% last year.

Taxpayers will also get relief from income tax cuts that the government announced in the fall of 2008, which are retroactive for the 2008 tax year. The cuts include increased personal exemptions, a boost in the child tax credit, and a new low-income tax credit to assist lower income residents, many of whom pay no provincial income tax.

According to Gantefoer, the property and income tax cuts combined will result in tax savings of $2,000 this year for a family of four earning $50,000.

Overall spending by the provincial government this year will total $10.2 billion, up $1.13 billion, or 12.4%, from spending in 2008-09. Total revenue is forecast at $10.7 billion.

“We have been cautious in our revenue forecasts due to the high degree of uncertainty in today’s economy and commodity price forecasts,” Gantefoer said. “The good news is we are better prepared than most jurisdictions to face any challenges – we’re forecasting a surplus and we have $1.1 billion in our cash reserve.”

In his budget address, Gantefoer said Saskatchewan’s proactive efforts to stimulate the economy last year — by cutting taxes and investing in infrastructure — helped put the province in a position to achieve the highest growth rate in Canada this year.

“At a time when others are experiencing economic decline, we’re forecasting economic growth,” he said. “While others are shutting down factories and cutting their workforce, we’re looking for workers and showing an increase in employment.”

IE