Scott Moe, the new premier of Saskatchewan, fulfilled his campaign promise of reinstating the provincial sales tax (PST) exemption on life and health insurance premiums, the Financial Advisors Association of Canada (a.k.a. Advocis) announced on Monday.
The PST is being repealed retroactively to Aug. 1, 2017, the date the tax was implemented following the 2017 Saskatchewan budget.
“Saskatchewan is now headed back in the right direction,” says Pollock. “The tax was a bad idea, and maintaining it would have a very negative impact on consumers in the long term. It was already hurting vulnerable residents such as those on fixed incomes and families struggling on minimum-wage incomes.”
After the implementation of the PST on premiums, Advocis conducted a poll on Saskatchewan residents, which revealed that 53% felt the province was headed in the wrong direction.
Furthermore, 73% of respondents opposed the tax. The survey also showed that the PST would make many Saskatchewan consumers consider reducing their life and health insurance coverage, or cancel their policies altogether.
In Advocis’ efforts to inform the public on the “detrimental impacts of applying PST on insurance,” they were careful to note that some forms of insurance are designed as possible savings vehicles.
“Other provinces were watching this issue closely,” Pollock says. “Today’s outcome and Premier Moe’s decision will hopefully make other jurisdictions think twice about implementing similar insurance premium taxes that will hurt consumers’ long-term financial security.”