You could almost hear the sound of the Saskatchewan economy retracting in response to recent comments by Premier Brad Wall.
Wall, whose government has often noted how it has governed through some of the best times in Saskatchewan’s history, is suddenly scrambling as their most recent budget lies drowned in red ink, and things looking little better for 2017.
As a result Wall recently pointed to wages as one of the biggest issues the government faces in terms of budgeting, noting they account for some 60 per cent of spending.
“At some point, I think we have to determine in the long-term interest of the province, do we engage in layoffs or rollbacks,” Wall was quoted as saying.
Now Wall was right in the past saying they have held office through the best of times. Agriculture was robust. Oil was high. Potash sales were steady. The population eclipsed one million.
The problem has been that when it came to budgets, Wall and company have always seemed a touch off the mark. They missed potash sale declines. They got caught by the collapse of oil.
The result they siphoned off rainy day funds, proceeded with projects like the seeming debacle of the Regina bypass, and Wall’s Taj Mahal football stadium.
And now the red ink is deep, a billion dollars deep, and the government is scrambling.
There have been rumours of a sales tax on restaurant food. Health boards are seeing less dollars. Now wage rollbacks for provincial workers are hinted at.
Those are the sort of moves that have the potential to help the books, and stagnate the economy already sluggish in step with the rest of the world.
When you have a pay cheque you budget based on it. See that cheque trimmed, and families are left scrambling. You can’t stop paying telephone, power, natural gas, water, taxes and yes food and home payments.
So you don’t go to the movies. You reduce meals out. You reduce the stay at a provincial park this summer. The children don’t get new skates. Stores suffer. The economy grinds slower.
But it potentially gets worse.
If the government reels in wages, the private sector will be completely willing to follow suit, even if they do not need too. They can readily point a finger at Wall, and pocket the savings.
And that leaves employees, public and private, heading into 2017 in fear of their paycheques and job futures, and that generally means pulling back on discretionary spending, and that is not good news for small business.
It could be a fear-filled new year depending on just what Wall and company do in their next budget.
