By Leah Murray

PST increase in Saskatchewan may drive more cross border shopping

Mar 23, 2017 | 5:48 PM

MEDICINE HAT, AB — The Saskatchewan government says falling revenues from oil and gas have led to increases in consumption taxes.

The Saskatchewan Party did lower personal income tax rates but one per cent increase to the provincial sales tax is expected to be costly for residents.

The now six per cent PST is also being applied to previously exempt items like children’s clothing and food at restaurants.

An average family with two parents and two children in Saskatchewan, making $75,000 per year, will pay over $500 more in 2017 in sales tax alone.

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The cost of cigarettes went up overnight. There’s now a 50 cent tax on every cigarette sold.

The price of alcohol is going up on April 1, when new liquor mark-ups come into effect.

Most beer products will increase by 6.8 per cent, coolers will go up by six per cent, wines by 5.3 per cent and four per cent for most spirits.

“What this does is make Medicine Hat a little bit more cost competitive versus some of the businesses in Swift Current or Maple Creek,” said Glen Allan, economics instructor at Medicine Hat College.

The president of the Medicine Hat Chamber of Commerce believes the increased taxes in Saskatchewan will drive more people across the border to spend their money here in Medicine Hat.

“We need to make our dollars go further and if there’s a way that those people can do that then I think it will be a good thing for Alberta business and specifically Medicine Hat,” said Aaron Fleming.

While Alberta may see some economic benefits right now, Allan warns Albertans shouldn’t get too comfortable with not having a provincial sales tax.

He said with the province’s debt expected to hit $71 billion by 2020, the government may have to consider a PST of our own just to pay for the servicing costs.

If that happens, Allan said there will no longer be an advantage.

“If we introduce a sales tax equal to Saskatchewan, well then, that competitive advantage disappears instantly,” he said.