The provincial government issued a news release on the cusp of New Year’s reiterating the outline of the Saskatchewan Affordability Act.

The Deputy Premier and Finance Minister said that every year our government adjusts the provincial income tax brackets and basic tax credits to protect Saskatchewan citizens from the rising cost of inflation, which is also known as indexation. Jim Reiter explained that it provides safeguards against the inflationary pressures that would otherwise push taxpayers into higher tax brackets and reduce the actual value of tax credits.

The level of indexation in 2025 will be 2.7 per cent, which matches the annual average national inflation rate from October 2023 to September 2024. In 2025, Saskatchewan residents will see $40.5 million in annual tax savings from indexation. Reiter says, “A family of four will not pay any Saskatchewan income tax on the first $63,200 of their income, the highest tax-free threshold for a family of four in Canada,”

Indexation was also incorporated into The Saskatchewan Affordability Act which reduced personal income tax in Saskatchewan by increasing rates for the basic personal, spousal and child exemptions, as well as the seniors supplement, by $500 a year for the next four years on top of annual indexation adjustments.