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Saskatchewan Finance Minister Ken Krawetz talks to media at his pre-budget photo opportunity on March 22, 2010, in Regina, Sask.


Saskatchewan is using soaring oil revenue to pump out a pre-election budget aimed at wooing voters with tax cuts.

The budget increases how much people can earn before having to fork over cash to the government. The basic personal and spousal exemptions increase by $1,000 each and the exemption for dependant children increases by $500 per child.

Finance Minister Ken Krawetz said Wednesday that the changes combined with a low-income tax credit introduced in 2008 mean a family of four will pay no tax on the first $45,550 of combined income.

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"That's the highest income threshold in Canada," said Mr. Krawetz.

"In other words, that family and most Saskatchewan families with dependant children can now earn more tax-free income in Saskatchewan than any place else in Canada."

A family of four with an income of $50,000 will save $2,447 a year.

The budget also brings long-awaited cuts to the education portion of property taxes and slices the small business tax rate to two per cent from 4.5 per cent beginning July 1.

It's the last budget before the provincial election in November.

However, Premier Brad Wall said the government is not priming people for the vote.

"This is not constructed to be an election budget. It's constructed to be a budget that keeps our promises and builds on the Saskatchewan advantage," said Mr. Wall.

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"However, I would be happy to campaign on it."

Other goodies include $216.8-million for municipalities, which finally get their promised one-point share of the provincial sales tax, and $285-million for highway repaving and infrastructure projects.

There's $12.6-million for the Saskatchewan Cancer Agency to allow for a doubling of bone marrow transplants, additional colorectal screenings and more cancer treatments. Another $15.3-million will be spent to address recommendations made in last year's child welfare review, including $750,000 to add 30 new child protection workers.

The budget projects revenue of $10.79-billion - up 8.5 per cent from 2010-2011 - and total spending of $10.67-billion, which is up 5.5 per cent. That leaves a surplus of $115-million in the general revenue fund.

On a summary basis, which takes into account all areas of government including Crown corporations, the surplus is expected to be $54.3-million.

The government plans to take $325-million from its rainy-day savings account to pay down General Revenue Fund debt. The payment brings the debt to $3.81-billion - the lowest level since 1987-88.

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It's different than last year when the government tabled a budget where spending outpaced revenue and the province relied on savings to keep the books in the black.

But the Opposition New Democrats argued the budget doesn't go far enough to help low-income people, seniors on fixed incomes or students.

"For all the money that's being announced, it lacks vision and I don't find it very inspiring," said NDP Leader Dwain Lingenfelter.

"It will impact some, but my sense is that the families, many of them who we've been talking to up in the flooded area, won't be paying any income tax this year because they have no income. Or many people who are on low or minimum income, who aren't paying any income tax, aren't going to feel the benefit of this budget at all."

The NDP also raised concerns about growing Crown debt, which budget documents suggest will increase by $810 million.

Other reaction to the budget was mixed.

The Saskatchewan Urban Municipalities Association said getting one point of the PST gives communities revenue predictability, which allows for better future planning.

The Saskatchewan Chamber of Commerce said "it's a pretty good budget," but the government could have gone further on property tax breaks.

"It's clearly an election budget. There's little bits and pieces for everybody. Everybody should at least have an appetizer-size feeling that they've achieved something here," said chamber CEO Steve McLellan.

"They're moving in the right direction and the minister said, 'we've taken some steps forward. We're sending the message that property tax is important.' But at the end of the day, I would like to have seen this to be a very significant step forward. It's an election year - we didn't see that."

But it was anti-poverty advocates who were most upset. They noted there's just $1.7-million for two new initiatives to create affordable housing in Saskatchewan.

"I really think it's quite unbelievable that at a time of an economic boom and massive resource wealth that there's really so little in this budget for low-income people, to improve the pocketbook of low-income people," said Peter Gilmer with the Regina Anti-Poverty Ministry.

"This is really a very limited response to the housing crisis in the province right now."

Mr. Gilmer said the income tax break won't help either.

"You have to have a significant income to make ends meet. A tax cut on nothing is nothing," said Mr. Gilmer.

"We need to improve people's incomes. We also have to make sure that their cost for basic needs like housing are affordable and this budget, quite frankly, doesn't do that."

There are also some concerns about unbudgeted expenses down the road, including contracts with labour groups or potential disasters. The watershed authority has already warned there's a high likelihood of flooding again this year, especially in southern Saskatchewan.

Mr. Krawetz suggested he isn't worried.

"I think we have a cushion. We have a cushion both in our surplus that we're projecting at the end of the year of $115 million, and we have a cushion of over $710 million in our growth and financial security fund," he said.

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