Saskatchewanians – consumers and insurance brokers alike – are not happy about the provincial Government’s tax on insurance premiums.
Since August 01, insurance premiums in the province have been subject to a 6% PST.
According to a poll conducted by Maple Leaf Strategies, 73% of Saskatchewan survey respondents “oppose” or “strongly oppose” taxing insurance. In addition, 77% of respondents say that taxing insurance is “unfair”.
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Furthermore, 73% say the taxing practise will cause people to reduce or cancel their insurance. And, perhaps surprisingly, two-thirds (65%) of Saskatchewan Party voters – the provincial Government’s base – also “oppose” or “strongly oppose” the tax on insurance.
“Opposition to taxing insurance crosses every demographic and political category,” said pollster Dimitri Pantazopoulos. “Moreover, there is a high level of awareness of this issue among the electorate.
“Aside from the unpopularity of this tax, it could lead to serious problems for the government if people start reducing or cancelling their insurance,” said Dean Owen, Saskatchewan based member of The Financial Advisors Association of Canada (Advocis). “If those people have an accident and are not covered for risks they will ultimately end up at the government's door – meaning higher costs in the end for taxpayers.”
For brokers, too, it’s unpopular.
Nancy Beaudoin, owner of Radmont Insurance in Radisson, SK, and member of the board of directors of the Insurance Brokers’ Association of Saskatchewan, said no-one seems to appreciate the change.
But it’s something everyone has to just put up with, she said.
“I don’t think too many people are happy about it. It’s a bit of a pain, even for us, having to collect it and submit it and all that other stuff. We’re not used to it. It’s just another thing that none of us want to pay, but we all have to,” she said.
“But it’s going to be like anything else – we’ll get used to it. And then it’ll become a forgotten thing and we’ll find something else to complain about.”
The tax was initially supposed to have been implemented on July 01, but was moved back a month.
“The insurance industry associations have asked us for more time to implement this change and we want to ensure a smooth implementation,” Finance Minister Kevin Doherty said in May.
“We’ve listened and have agreed to move the effective date back one month as well as update the application of PST to ensure it is applied fairly across the industry,” he said.
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CLHIA calls Saskatchewan’s plan to tax life insurance premiums unfair
