Saskatchewan's auditor says a multi-million dollar fuel tax exemption for farmers, which has been in place for 30 years, does not have a clearly-defined purpose.

Judy Ferguson released her office's latest report today, where it was tabled in the Legislature.

In it, the auditor notes the government forgoes $3.9 billion through a variety of tax expenditure programs — including the fuel tax exemption, which applies to farmers, fishers and trappers and those who heat their homes with fuel, primarily in northern Saskatchewan.

It's never been defined as to why we need this program. - Saskatchewan Auditor Judy Ferguson

The report says there is a clear goal for the home heating exemption — valued at $33.1 million last year — which is to make the cost of heating one's home more equal between those who are able to use natural gas and those who must use diesel.

However, it says there is no real goal for the gas tax exemption for farmers, which was worth $121 million in 2015-16, other than reducing their taxes.

"The problem is, is that it's never been defined as to why we need this program," Ferguson said.

Government reviewing rebate

Ferguson notes a lot has changed in the three decades since the exemption was introduced, including agricultural income support programs — and yet even when the program is reviewed by government, it does not ask whether it is still required.

Saskatchewan's auditor, Judy Ferguson, says the government has never clearly defined the goal of its fuel tax exemption for farmers. (Mike Zartler/CBC) "You know, 'how does this program fit within that broader array, and do we still need it?' And we found that they didn't ask that tough question. And we think they should," Ferguson told reporters.

The government says it is reviewing it now, along with all of its revenues and expenditures.

"It is on our radar screen with respect to taking a look at it, as all of our tax expenditures, or tax exemptions are," Finance Minister Kevin Doherty said.

"I'm very mindful of what the auditor has said with respect to understanding whether those tax exemptions still are required, or serve the purpose that they were intended for, and it's part of our review during this coming fiscal year," he said.



