(Update) 2017 Saskatchewan Budget: Impact on Group Life and Disability Insurance

Notice to readers

The following information is no longer applicable. Saskatchewan Provincial sales tax no longer applies to any of the public service group insurance or supplementary death benefit premiums.

For information on refunds, contact the Public Service Pay Centre or your departmental compensation services.

Date:

To:

Compensation Managers; Heads of Human Resources; Participating Separate Employers

Purpose

The purpose of this notice is to provide you with information on the recent amendment to the Saskatchewan Insurance Act requiring provincial sales tax to be applied to insurance and supplementary death benefit premiums.

Background

The Government of Saskatchewan released an Information Notice announcing that effective August 1, 2017, provincial sales tax will apply to insurance premiums.

Federal public service employees who both reside and work in Saskatchewan will have to pay provincial sales tax on premiums for the following group insurance benefit plans:

  • Public Service Health Care Plan
  • Public Service Dental Care Plan
  • Pensioners’ Dental Services Plan
  • Public Service Management Insurance Plan, which includes the Long-Term Disability Insurance Plan
  • Disability Insurance Plan
  • Royal Canadian Mounted Police Life and Disability Insurance Plans

In addition, federal public service employees who reside in Saskatchewan will have to pay provincial sales tax on Supplementary Death Benefit Plan premiums. Please note that employees residing in Saskatchewan but working outside of the province will also have to pay the sales tax.

In accordance with the Summary of Reciprocal Taxation Agreements with Provinces and Territories, the employer share of premiums associated with these plans is not taxable, except for the following organizations:

  • those listed in Schedule I of the Federal-Provincial Fiscal Arrangements Act (FPFAA)
  • those listed in Part I and II of Schedule III to the Financial Administration Act as being included in Schedule I of the FPFAA, if not already listed

Each organization participating in the above-mentioned public service group benefit plan(s) is responsible to assess whether sales tax on the employer portion is required and to arrange to have that tax paid to the province in accordance with provincial policy.

Employees on leave without pay

Employees who are paying the full cost of the above benefits due to a leave without pay situation are required to pay sales tax on the entire amount of the premium.

We encourage you to share this information with your employees.

Should you have any questions regarding this notice, please contact the Pensions and Benefits Sector at pbs-spas@tbs-sct.gc.ca.

Caroline Curran
Assistant Deputy Minister
Pensions and Benefits Sector

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