The first provincial budget to be handed down by finance minister Donna Harpauer is forecasting a deficit of $365 million for 2018-19.
However, the province is projecting a return to balance in 2019-20 of $6 million, with higher surpluses of $108 million projected in 2020-21 and $212 million in 2021-22.
“Our government has a plan, and that plan is on track,” Harpauer said to reporters in an embargoed news conference prior to release of the budget.
“One year ago, our government charted a three year course to reduce Saskatchewan’s dependency on resource revenue and to balance the budget by 2019. This year’s budget keeps that plan on track by controlling government spending, by making important investments in health care, education and social services for Saskatchewan people, and by keeping our economy strong.”
Revenue is forecast at $14.24 billion in this budget, up about $80 million from last year—largely due to higher non-renewable resource revenue, net income from Government Business Enterprises, and other own-source revenue. Revenue from taxation is forecast to be lower—largely due to lower personal and corporate income tax revenue, offset by higher revenue from the Provincial Sales Tax. Expense is forecast at $14.61 billion in this budget, down $200 million or 1.4 per cent from last year.
Harpauer noted non-renewable resource revenue now accounts for 10 per cent of the province’s total revenue, down from 32 per cent in 2008-09.
“One of the main goals of our three-year budget plan was to reduce Saskatchewan’s reliance on resource revenues, and that plan is on track,” Harpauer said.
There are some significant announcements from the 2018 budget. One a SaskEnergy municipal surcharge that will be collected on behalf of all urban municipalities at a rate of five per cent and which will appear on SaskEnergy customer bills. Municipalities can choose to opt-out of this program.
Prior to this year, 109 Saskatchewan urban municipalities had received the municipal surcharge. This change extends it to all municipalities.
There is no change to the existing SaskPower surcharge, however. As for Grants-in-Lieu of Property Tax, SaskPower and SaskEnergy will pay grants-in-lieu of property taxes on owned real-estate assets in Saskatchewan such as office buildings but exclude generation, transmission, and distribution facilities, as well as pipelines and land.
In education, more money is going to the school divisions, fulfilling a campaign promise by Premier Scott Moe during his successful SaskParty leadership campaign.
“This budget also fulfills the Premier’s commitment to increase education funding by $30 million,” Harpauer said. Saskatchewan’s 27 school divisions receive $1.87 billion in school operating funding for the 2018-19 school year, up 1.6 per cent.
“This will allow school divisions to continue to support students in the classroom by maintaining or hiring up to 400 teachers and other in-school professionals.”
The budget also provides nearly $77 million in child care funding, which Harpauer says will support over 16,000 existing licensed child care spaces in Saskatchewan and help create 2,500 more spaces by 2020.
Library operating funding, a sore point of last year’s budget, has been maintained at $11 million for this year.
The post-secondary education budget is up 1.5 percent to $729 million, with operating grants maintained at last year’s levels. $34 million in direct financial supports to students has also been allocated, and the Graduate Retention Program is being retained.
In health care, $5.77 billion is being invested, up almost 2.5 per cent.
This includes $3.5 billion for Saskatchewan Health Authority operating funding, up almost $72 million. $19 million in administration costs is being saved by amalgamation of the 12 health authorities and is being redirected to front-line services.
Among spending highlights under health care is a $16.8 million increase for physician and operating capacity for Jim Pattison Children’s Hospital, and $14.2 million in new funding for operating and accommodations costs at Saskatchewan Hospital North Battleford.
Also related to Sask Hospital, there is $34 million in this year’s budget to complete construction of that 284-bed psychiatric care facility. According to the budget document, the new hospital is scheduled to open in the fall of this year and replaces the current facility that is over 100 years old.
Also in the budget, the province is investing $700,000 this year for universal 100 per cent coverage of HIV drugs for Saskatchewan people and for additional HIV supports.
A new program to ensure babies born in Saskatchewan hospitals are screened for hearing loss will see $520,000 invested.
$2.8 million is earmarked for individualized funding for children with Autism Spectrum Disorder, with initial funding of $4,000 per child under age six to be provided this year.
The social services and assistance budget will increase by $25 million to $1.38 billion. Over $10 million of this amount goes to those in communities who provide direct daily care to adults with intellectual disabilities or mental health challenges, to direct supports to families and for daily care for children in need of protection. A new group home in La Ronge for adults with intellectual disabilities is being funded.
As of July 1, 2018, the Saskatchewan Rental Housing Supplement will suspend intake of new applications, and a new rental support program will be co-developed by Social Services with the federal government as part of the National Housing Strategy. No one currently receiving the supplements will see any change. Theree is a window of 12 weeks for those to apply and meet eligibility requirements to receive the supplement.
On the crime reduction front, funding is being provided for the Protection and Response Team launched last year. The budget includes $4.9 million in new funding from SGI for enhancements to the Rural Crime Strategy, and includes funding for 30 additional police positions for phase two of the province’s Combined Traffic Safety Services Unit. The Ministry of Corrections and Policing is also providing a continued annual funding of $1 million to address other recommendations from the Caucus Committee on Crime.
Highway spending is set at $924 million in the budget. About $51 million will be invested in major safety projects, including two sets of passing lanes on Highway 4 between North Battleford and Cochin. $330 million is being allocated for work on Phase II of the Regina Bypass, to be completed in 2019.
Of note, tax rates will not be going up with this budget.
“That means all provincial tax rates, including provincial sales tax, income tax and education property tax remain the same. And of course this budget contains no carbon tax,” said Harpauer.
There are some changes coming to the PST on a few items:
For used light vehicles the PST exemption is being removed effective April 11, aligning Saskatchewan with all other jurisdictions in Canada which have a sales tax.
The trade-in allowance, allowing a deduction for the value of a trade-in when determining PST, is being reinstated. PST will only be paid on the difference in price between the trade-in and the purchased vehicle.
PST will also not be charged for used vehicles gifted between qualifying family members; PST will also not be applied to the private sale of used vehicles with a purchase price of up to $5,000 which is unique to Saskatchewan.
The PST exemption for Energy Star appliances is being discontinued; the government is saying energy cost savings already provide a strong incentive for consumers to buy these appliances.
The government is also dialing back on their previously announced plans to reduce personal income tax rates.
Those rates, which were reduced by half a point in 2017’s budget, will stay the same for the time being, pausing the rate reduction plan announced last year. The indexation of the income tax system is also paused for this year.
The budget does not incorporate revenue from the sale of cannabis this year. According to the budget, this is in part because it is still unclear exactly when legalization will occur, and because the size of the cannabis market and the anticipated retail price are difficult to predict, making it challenging to forecast revenue.
The government is also maintaining a commitment to controlling spending and compensation costs. A goal of $70 million in savings has been set for the next two years: $35 million in this budget and $35 million next year, through efficiencies and attrition.
“This budget sets the stage for a new decade of growth by keeping Saskatchewan’s finances and our economy on track,” Harpauer said.
At the very start of her budget address in the legislature, Harpauer spoke briefly about the Humboldt Broncos bus tragedy that impacted her riding directly, and asked for a moment of silence.
