Provincial budget deficit $434 million; no tax increases
Posted on June 2, 2016 by Maple CreekBy Taylor MacPherson
Brad Wall and the Sask Party tabled their provincial budget Wednesday afternoon.
What Finance Minister Kevin Doherty referred to as a “controlled” budget was revealed to be a deficit of $434 million. In February, Doherty had estimated that the deficit would be just $259 million.
Spending for the upcoming fiscal year totalled $14.46 billion, while revenue projections sit at $14.02 billion.
The deficit was caused by the falling prices of the province’s non-renewable resources, specifically oil, gas and potash, which has cost the province over $1 billion in revenue. In contrast, the 2015-16 budget tabled last March included a $107 million surplus, based on growth in the potash industry.
While taxes will not be going up (in keeping with a Sask Party election promise), the government has been forced to make significant spending cuts, including closing the Buffalo Narrows Community Correctional Centre, increasing the cost of perscription drug plans and slashing funding for urban parks.
Tax credits for families with children who participate in cultural, regional and sports activities have also been cut as a saving measure.
“We didn’t think it would be prudent at this point in time, given the situation in the economy, to pull back spending dramatically,” said Doherty, who asserted more dramatic cuts “would result in perhaps the layoff of individuals that work in government or our third-party sectors, closing down facilities.”
Despite the cost-saving cuts, the new budget makes significant investment in provincial infrastructure. The province will be borrowing $1 billion for capital projects and making a total of $1.7 billion in investments, including repairs or upgrades for 1,300km of Saskatchewan highways.
“This government understands that investing in our highway infrastructure and continuing to support trade and transport has been and will continue to be the key to keeping our economy strong,” said Shantel Lipp, president of the Saskatchewan Heavy Construction Association.
In addition, the budget includes a $20 million boost intended to shorten surgery wait times, and creates a position for a special commissioner to be appointed to reduce the number of health regions in the province and improve service efficiency.
$272 million will be passed on to municipalities under the revenue-sharing agreement, and $390 million has been alloted to agriculture.
Doherty told the press he hopes the new budget will “keep Saskatchewan strong by keeping taxes low, controlling operational spending and by continuing to make key investments in government services and infrastructure.”
The opposition NDP were quick to criticize the new budget, particularly the modest increases to funding in education and healthcare.
“The tiny increases allotted,” says NDP Finance Critic Cathy Sproule, “are not nearly enough to even maintain programs at their current levels. As a result school divisions and health regions will need to make difficult decisions in the coming months.”
The Sask Party also faced criticism for their liberal use of the province’s rainy day funds, which have dwindled from $1 billion six years ago to just $190 million in the last budget.
“This government drained it,” said Sproule, who accused Wall of “dipping into the fund when times were good.”
Sproule was also critical of the lack of job creation initiatives in the budget, and the cuts to Aboriginal-focused programs, such as the community justice and alternative measures program and the Aboriginal court worker program.
“To make cuts and otherwise ignore these areas defies reality,” said Sproule in an official release. “[The Sask Party] should apologize to Saskatchewan people for refusing to be honest before the election and reconsider this budget.”
Premier Brad Wall fired back at the NDP during Question Period, arguing that the 21 tax hikes enacted under the New Democrats “might explain the current seating arrangement.”
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