Cam Skoropat harbours no illusions about changes to the provincial sales tax system introduced last month by the Saskatchewan government, which he expects will make houses across the province more expensive. 

Skoropat owns Saskatoon-based Lexis Homes, which erects between 10 and 15 houses each year. While the exact effects of the PST changes are still “a little bit vague,” the overwhelming majority of the extra costs will be downloaded onto customers, he said.

“It just makes it that much more difficult for everyone to afford something new.”

The additional costs will likely compound difficulties created by tighter mortgage rules introduced last year by the Canada Mortgage and Housing Corp., he added.

Finance Minister Kevin Doherty has said the one-point provincial sales tax increase and the elimination of a PST exemption on construction labour were intended to broaden the tax base and cut into a $1.2 billion deficit.

The PST changes have met near-unanimous opposition from the province’s construction companies, who did $2 billion worth of work last year.

According to a survey released Wednesday by the Canadian Federation of Independent Business (CFIB), 92 per cent of Saskatchewan construction companies that responded to its survey believe the changes will hurt their businesses, compared to 79 per cent of all companies that responded.

Saskatchewan Construction Association (SCA) president Mark Cooper, who lobbied hard against what has been called “a tax on growth” ahead of the 2017-18 austerity budget released March 22, said he is “not at all” surprised by the industry’s reaction.

Higher construction costs — the association estimates the increase for most projects will be three to five per cent — will be passed on to customers, and they could curb further investment, the effects of which will radiate through the broader economy, he said. 

“I expect we will see a bit of an economic slowdown, and I absolutely expect that we will see construction jobs lost, at an even more concerning pace than we have seen in the last couple of years,” Cooper said, referring to the 4,600 construction jobs lost last year.

Chris Le Fevre, a B.C. developer behind several projects in Saskatoon, said while passing on the costs is most builders’ “perfect wish,” it is unrealistic given the province’s already high construction costs and the erosion of customers’ ability to pay.

“When that’s the case, cost changes of the nature which we’re talking about are going to end up having to be absorbed by the builder. So will it affect their business in a negative way? Yes it will.”