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Harpauer bullish on provincial budget

It's an election year in Saskatchewan. And with its latest budget, the Saskatchewan Party could have made all sorts of grand spending gestures in the hopes of winning an easy return to power.

It's an election year in Saskatchewan. And with its latest budget, the Saskatchewan Party could have made all sorts of grand spending gestures in the hopes of winning an easy return to power.
That it did not suggests the current government feels no need to "buy" anyone's votes.
It also shows it has learned the hard lessons of two years ago, when a drastic drop in royalty revenues left the province scrambling to address a massive budget shortfall.
Unveiled last week and dubbed the "Saskatchewan Advantage," the government's budget for 2011-12 is one that Humboldt MLA Donna Harpauer sees as cautiously optimistic.
Revenues and expenditures are both on the rise, but the government has also forecast a surplus, while at the same time lowering taxes and paying down debt.
"I'm very, very proud of this budget for two reasons," she told the Humboldt Journal. "I'm proud because it is a strong budget in writing down debt, there's a tax write-down which helps families, while we maintain and strengthen our services. But also, what this budget did not do is make a bunch of grandiose 'spends' just for purposes of an election."
Projected revenues for the 2011-12 are at $10.79 billion, up about $750 million over last year. Expenditures are at $10.69 billion, up about $555 million over last year's forecast.
Actual 2010-11 numbers have not yet been finalized.
Percentage-wise, the biggest increase this year is in K-12 education spending, with $1.43 billion allotted (up $119 million from 2010-11). But that doesn't factor in a pending new settlement with teachers, who have been working without a contract since last year.
Post-secondary education, training and immigration receives a much more modest increase, of 3.2 per cent, going up $26.4 million to $855.9 million.
Health care also goes up, by 6.2 per cent ($263 million), and is the government's single-biggest area of expense, topping $4.46 billion.
Social services spending increases by eight per cent, or $60 million, to $814.2 million.
On the other hand, spending on highways and roads is down by 5.6 per cent ($22.6 million), to $380.3 million.
Taxes are also down. The personal and spousal income tax basic exemptions will both increase by $1,000, with exemptions for dependent children going up by $500. That means more money in the pockets of Saskatchewan people, Harpauer stressed.
Agricultural, residential and commercial education mill rates have all been decreased. Harpauer noted that, compared to three years ago, farmers will now be paying an average of 80 per cent less in education tax.
"That is a huge amount, and an expense that farmers were finding extremely difficult when the prices of their commodities weren't necessarily going up," she said.
Modest forecasts
As our province is heavily reliant on natural resource revenues, the budget numbers must reflect the forecasts of industry analysts when it comes to what the average price of various commodities will be.
Two years ago, Saskatchewan forecast a very rosy revenue picture that relied on high average prices for both oil and potash. Both those markets tanked in the 2009 recession, however, with potash ultimately selling for less than half the forecast value of $556 per KCl tonne. As a result, the provincial budget that year was close to $1 billion off the mark.
Harpauer said the Sask. Party has learned well from that mistake.
This year's budget is based on an estimated average price of $93 US a barrel for oil for 2011-12, and on an estimated average price of $393 US per KCl tonne of potash. Oil is currently trading at about $108 US a barrel, with potash at about $400-450 per KCl tonne.
The budget also assumes an average growth of 3.6 per cent in the province's gross domestic product - a number that Harpauer said is in line with those of outside analysts.
She feels all those projections are realistic.
"We are very mindful of that year (2009-10) where we had zero sales of potash, and it just wasn't predicted by anybody in the industry," she said. "So we're (aware) of that, and we tried to be quite conservative in our projections."
The budget will also see the government pay down $325 million on the province's accumulated debt, lowering the total accumulated debt to $3.8 billion. That number does not include an estimated $5 billion in debt held by Saskatchewan's crown corporations.
The Growth and Financial Security Fund, our province's "rainy day fund," will increase to $715 million.
Harpauer said criticism of the government's budget by the NDP is based on a gloom-and-doom attitude that our good fortunes simply won't last. She feels her party - though cautious in its approach- is much more positive about Saskatchewan's prospects heading into the future.
"That attitude, that our prosperity won't last, that's not the attitude of the government of the day," she said. "We do think we have a Saskatchewan advantage, and we do think that we're going to continue to grow.
"We have the highest population that we've ever had, which is very exciting; we have more businesses starting than we've ever had; and we have a very strong rainy day fund. And each and every time we can write down that debt, that is interest saved.
"It's prudent management," she added.

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