Saskatchewan deals with a ‘difficult budget’

Saskatchewan’s provincial budget for 2017-18 was revealed on March 22. Yorkton MLA Greg Ottenbreit says it was a difficult budget, as the province had to recover from a billion dollar deficit in the last year. The goal was to reduce spending in the next year.

One of the big changes for the new budget was the expanding of the PST, which Ottenbreit describes as a modernization of the province’s tax system. PST now applies to more things, including children’s clothing, restaurant meals, construction and insurance. It has also gone up, from five per cent to six per cent.

“We have relied heavily on resource revenue over the past ten years. Some years that has turned out well for us but for the past three years we have had continual decreases in resource revenue of well over a billion dollars.”

The goal was to move away from income tax and towards consumption tax, Ottenbreit says, and that was the goal of the budget, including reducing income tax and corporate tax to offset the PST increase.

“We know that if we’re going to move away from resource revenues, we are going to move to a stable source of income to fund these different services, we have to move to an income that is predicable. The PST is one of those areas.”

The Saskatchewan Transit Corporation (STC) was also cut in the budget, with the bus service scheduled to be shut down at the end of May. Ottenbreit says that they deserve credit for the many initiatives that they undertook to try to increase ridership, but that with the continuing decrease in the amount of passenger and package traffic, they could not keep funding it.

“The utilization continually dropped and dropped and dropped, to the point where we were subsidizing it by about $10 million a year. Looking at the forecast, the fleet was needing replacement, and the subsidy kept needing an increase because ridership was dropping, to the point that we are looking at anywhere from $85-100 million over the next five years to keep it running.”

Ottenbreit argues that the major routes will be picked up by other providers, and he believes that people will find alternate ways to move around the province, arguing that many people just get rides for medical appointments, for example.

“I think if we take our time and look at different options, not all of the gaps may be filled but the majority of them may be filled... Although people see it as a benefit, they aren’t really utilizing it that much, they are looking at other options.”

There have been large cuts to the amount of funding provided to post-secondary education, but Ottenbreit says that their goal should be to operate more efficiently.

“We’re finding efficiencies within government, and we expect the same within our third party partners, whether it’s post-secondary education or others, and do their best to not pass those expenses on to students or the users of their services.”

Many small programs were cut, like Culture on the Go – an $800,000 program annually – or the Community Rink Affordability Grant, which gave $2,500 to small town rinks to maintain ice surfaces. While some of the choices might seem like killing smaller programs, Ottenbreit argues that they add up, and that the government needs to focus on core services instead.

“There are a lot of good things that you like to support when times are good, but when the finances start getting tight you have to start re-analyzing where your priorities are. As we were going through the budget process, we had to get back to the core services of government and the core services of health and the other ministries. Do we want to have things suffer? Do we want to invest in bussing to the tune of $100 million a year or do we want to turn that money back in and invest in health and education and things like that? That’s when we have to look at core services and priorities.”

He points to investments into health, social services and the Saskatchewan Cancer Agency as where the government is focusing on the core services. The highways budget is still one of the largest that the province has ever had, for example, and the health budget also saw an increase, though a relatively small one.

Ottenbreit believes government should be run the same way as a home or business, and he believes that, while unpopular, the budget is a reflection of that philosophy.

“When things get a bit tighter, you have to make decisions... That’s the case here, we are having to pull back some of the extras and some of the things that might not be part of the core services  of government.”