Higher Bank Capital Tax, Crown Tax Phaseout

Summary#

This bill updates Saskatchewan’s Corporation Capital Tax (CCT). It cleans up old rules and changes tax rates for banks and Crown corporations. Most businesses still pay no CCT, but large financial institutions will pay more. The bill takes effect retroactively to April 1, 2026.

• Keeps the CCT rate at 0% for most corporations (unchanged since 2008).
• Raises the CCT rate on large financial institutions from 4% to 6% starting April 1, 2026.
• Exempts small financial institutions (those with total taxable capital of $1.5 billion or less, including affiliates) from CCT starting April 1, 2026.
• Phases out CCT on designated provincial Crown corporations: 0.6% to 0.3% on April 1, 2026, then to 0% on April 1, 2027.
• Ends the separate telecommunications capital surtax for telecom Crown corporations starting April 1, 2027.
• Keeps the 3% Resource Surcharge on resource sales (unchanged), and removes many outdated definitions and deductions.

What it means for you#

• Bank customers

  • Big banks will face a higher provincial tax on their capital in Saskatchewan (6% starting April 1, 2026).
  • Banks decide how to handle higher costs. This could affect fees or loan rates, but outcomes may vary by bank.
  • Smaller financial institutions and many credit unions will no longer pay this tax after April 1, 2026.

• Customers of provincial Crown corporations (like utilities and telecom)

  • Crown corporations’ CCT drops to 0.3% on April 1, 2026, and to 0% on April 1, 2027.
  • The separate telecom capital surtax ends on April 1, 2027.
  • These changes lower tax costs for these public companies. Any effect on bills is up to each corporation and regulator.

• Small financial institutions and credit unions

  • If your group’s total taxable paid‑up capital (across associated companies) is $1.5 billion or less, you stop paying CCT for periods ending on or after April 1, 2026.
  • Some special “step-rate” rules for merged institutions end; large merged institutions move to the flat 6% rate.

• Resource companies

  • No major change. The 3% Resource Surcharge on resource sales remains. Corporations still do a capital calculation to confirm if any offset applies, but the general rate remains 0%.

• Most other businesses

  • No change. The CCT stays at 0% (as it has since 2008).
  • A $10 million base exemption remains in the capital calculation rules.

• Tax and filing

  • The law is retroactive to April 1, 2026. Corporations and financial institutions will need to apply the new rates to returns covering periods on or after that date.
  • Several outdated definitions, deductions (like for goodwill and certain property), and filing references are removed, which should simplify compliance.

Expenses#

No publicly available information.

Proponents' View#

• Updates and simplifies the law by removing outdated rules and aligning terms with Saskatchewan’s main revenue law.
• Phases out taxes on Crown corporations and telecom capital, which can free up funds for investment or help hold down customer costs.
• Provides relief for small financial institutions and credit unions, helping local lenders compete.
• Increases the rate on large financial institutions so bigger players contribute more, balancing the overall changes.
• Keeps the Resource Surcharge steady and clearer, without changing the rate companies already expect.

Opponents' View#

• Higher taxes on large banks may be passed on to customers through higher fees or borrowing costs, affecting families and small businesses.
• Exempting small institutions while raising rates on large ones could distort competition and discourage investment by bigger lenders.
• Phasing out taxes on Crown corporations may reduce provincial revenue, which could pressure the budget or shift costs elsewhere.
• Retroactive changes can create administrative headaches and cash‑flow issues for affected companies.
• Continued reliance on complex “paid‑up capital” calculations and group thresholds may still be hard for firms to manage.