Construction PST Update

On April 1, 2017, PST will apply to construction labour services in Saskatchewan.


Quick Links:


These are the steps you need to take today and things you need to know now: 

PST REGISTRATION 
 

  • Ensure you are registered as a PST vendor.  You can register online.
  • If you are already registered, the Ministry of Finance will be sending letters advising of required changes shortly.

     

CONTRACTS
 

  • April 1, 2017 is a hard cut-off: contracts signed before this date will remain tax exempt with caveats for a cumulative maximum 10% change order price increase per project and exclusion of ongoing service contracts, among others.

     

OWNERS
 

  • PST is only charged to end users, so understand who you are billing and charge accordingly.  
  • If your customer is a General Contractor or another trade contractor, and they are the end customer, you do not need to charge PST. When billing consultants it will depend on the contract.

 

SUPPLIES & INVENTORY


  • After April 1, 2017, contractors will be able to purchase supplies PST exempt. The PST will be paid by the end user when they are billed further down the chain.
  • If you carry inventory, take stock and value your inventory as of March 31, 2017.  Those items will be PST paid and if you are charging PST to your customers, you can claim a PST credit for that inventory.
 

10% RULE 
 

  • The 10% change order rule will remain for new projects. However, for existing structures undergoing alterations, the percentage for change orders will move to 25%.

‚Äč

SUNSET DATE FOR "OLD RULES" PROJECTS 
 

  • The project sunset date will not be a pre-determined date, but rather it will be the anticipated completion date specified when the project applies to the Registry.
     

REMITTANCE OF PST 
 

  • Rules for remitting PST will mirror those set up for GST in an attempt to provide some cash flow relief due to the lengthy collection period.
     

PST ON CONSUMABLES 
 

  • The definition of consumables, which are not PST exempt, has been clarified with examples. Materials such as dimensional lumber, plywood and similar building materials used on site for bracing or to build forms can be now purchased tax exempt.
     

PROJECT REGISTRY
 

  • Projects initiated before March 31 must be registered by completing the Project Registry Application Form. This registration will allow contractors to obtain official ruling of a project's eligibility to fall under the "old rules" and will provide some degree of protection and clarity in the case of future audit. If owners/contractors choose not to register a project, they will need to reach out to the Ministry to establish a reasonable sunset date for that project.

MINISTRY OF FINANCE MEETING

 
The SCA Advisory Council and partner associations met with senior officials from the Ministry of Finance today. The meeting was considered successful and productive by both sides. Key items you should be aware of coming out of that meeting:
 
  • The government is providing informational bulletins here. You can subscribe to specific bulletins to receive automatic notifications when they are updated. We have included bulletins relevant to our industry under the Bulletins tab.
  • Contractors can contact the government with questions directly at 1-800-667-6102 or  sask.tax.info@gov.sk.ca.
  • If you have a concern that will impact a business decision and your answer is not in a bulletin you are encouraged to ask for a written ruling from the Ministry of Finance. These rulings will typically be made within a week and are binding, so offer protection for your business.
  • The Ministry and the industry have formed an ad hoc committee to work on transition rules and manage details of the implementation. If you cannot find the answer to your concerns in the bulletins, contact the SCA to submit your query to the committee. 
  • The Ministry has also committed to information sessions across Saskatchewan which will be organized through the ad hoc committee.
 
As of today, the Ministry of Finance is not certain of some issues and you are not alone in wanting more information. But some of the answers our industry needs are dependent on decisions that haven't been made yet.  We are fully engaged to ensure these decisions are made with your concerns in mind.

Note: The SCA does not claim to be an expert in taxation. Any information we share is third party, and we suggest that you contact the Ministry of Finance directly for specific questions.


Ministry of Finance Bulletins

  1. Effective March 23, 2017, the PST rate is increased from 5% tp 6%. The transitional rules are outlined here for taxable goods, services and leases.
  2. Businesses providing services to Real Property.
  3. When do I apply PST? - as of April 1, prior to April 1, and contracts in transition.
  4. Information for Asphalt Paving Contractors & Suppliers of Asphalt Paving Mixtures.
  5. Information for Commercial Refrigeration Vendors and Contractors.
  6. Information for businesses providing Engineering, Geoscience and Architecture services.
  7. Information for Hardware and Building Supply Stores.
  8. Information for Industrial and Construction Equipment Dealers and Suppliers.
  9. Information for businesses operating in Lloydminster, Saskatchewan PST and Liquor Consumption Tax.
  10. Information for Manufacturers.
  11. Information on the Manufactured Cost of Goods produced for own Consumption.
  12. Information for the Mining Industry.
  13. Information for Non-Resident Real Property and Service Contractors.
  14. Information for Oil & Natural Gas Producers.
  15. Information for Petroleum Drilling & Well Servicing Contractors.
  16. Elimination of PST remission for Permanently Mounted Equipment.
  17. Information for Rental Businesses.
  18. Information for Businesses providing Repair and Installation Services.
  19. Information for Suppliers of Sand, Gravel, Crushed/Screen Bases and Decorative Rock.
  20. Information for Service Stations and Automotive Repair Shops.
  21. Information for Businesses Providing Services to Real Property.
  22. Information for Suppliers of Mobile, Modular and Ready-to-Move Homes.
  23. Information for Land Development and Residential and Commercial Construction Application of PST and Transition Rules.
  24. Information for Vendors of Extended Warrant Contracts and Maintenance Contracts.

Can't find the answer to your question?


The Ministry and the industry have formed an ad hoc committee to work on transition rules and manage details of the implementation. If you cannot find the answer to your concerns in the bulletins, contact the SCA to submit your query to the committee. 

Note: The SCA does not claim to be an expert in taxation. Any information we share is third party, and we suggest that you contact the Ministry of Finance directly for specific questions.

Associations