November 08, 2018

The Income Discussion in Saskatchewan


Saskatchewan’s minimum hourly wage recently increased to $11.06 per hour – the tenth such increase in as many years.

Every year Saskatchewan’s minimum wage is calculated using an indexation formula that gives equal weight to changes to the Consumer Price Index (CPI) and Average Hourly Wage for Saskatchewan.

Since 2011, the Government of Saskatchewan has been able to provide predictable annual minimum wage increases, allowing employers and employees to prepare and plan for change and ensure minimum wage keeps up with inflation.

At a time when the NDP is proposing a $15 minimum wage, it’s important to have a broader conversation about income in Saskatchewan.

In an effort to ensure low-income individuals were keeping more of their money, our government increased the personal exemption limit, the amount you can earn before paying provincial income tax, twice in the last decade.

Saskatchewan now has the second-highest exemption limit in Canada which means people here can earn over $16,000 before they pay any provincial personal income tax – up from less than $9,000 under the last NDP government.

In fact, the change has resulted in 112,000 low-income individuals no longer paying any provincial income tax at all.

Under the NDP, if you earned minimum wage, you could only keep 45 per cent of your wages before tax kicked in. Ten years later, under our government, you keep 75 per cent before paying taxes.

The NDP had 16 years to index minimum wage to inflation, which they chose to never do.

If you look across the country at provinces with higher minimum wages, when it comes to disposable income – the money in your pockets – Saskatchewan remains competitive. In fact, in many cases disposable income here is higher, even with a lower minimum wage. Over the last decade Saskatchewan has had the strongest disposable income growth in the country.

Related Links
Minimum wage by province

Take home pay calculator

While the minimum wage in British Columbia is 14.5% higher than the minimum wage in Saskatchewan, their take home pay is only 2% higher, all due to Saskatchewan’s high basic personal exemption amount.

Both employers and employees are starting to see the impact of $15 per hour minimum wages where they have been voluntarily and involuntarily implemented.

Evidence points to total compensation actually shrinking as employers reduce or remove entirely paid benefits, bonuses, company stock options and other incentives that had existed previously. In some cases, employee pay cheques are actually lower.

It is easy for the NDP to promise a $15 per hour minimum wage because they aren’t the ones who have to pay for it.

If the NDP was really concerned about the cost of living for Saskatchewan residents, they should be reversing their support for a carbon tax.

What will be expensive for all residents regardless of their level of income is a carbon tax that will increase the cost of everything from food to fuel.

I’m not sure how upstream it is to call for increased minimum wages on one hand and then take it all away with taxes on the other.

The NDP is pushing economic policies that include a carbon tax, higher business taxes, higher resource royalties, opposition to pipelines, and a $15 minimum wage.

All of these policies have one thing in common: they kill jobs.

Our government will continue to stand up for Saskatchewan and defend the interests and the future of all our residents, and that starts with jobs, lower taxes for low-income earners, and a broader income discussion.

Nancy Heppner is the MLA for Martensville-Warman