The Saskatchewan Urban Municipalities Association convention was held in Regina this past week and the biggest news to come out of it was confirmation by Premier Brad Wall that the provincial government would run a deficit.
That news came in Wall’s speech to the SUMA delegates Monday at Queensbury Convention Centre.
In his speech the premier pointed to “tough and short term, emphasis on the short term” fiscal challenges.
“Our government has serious revenue shortfalls,” said Wall. The premier said his government has already been making “difficult decisions.”
“There isn’t much room left, frankly, for cuts,” said Wall. He said those would manifest in areas like health care and education, and withdrawing from infrastructure spending.
“It’s an option, but we don’t think, I don’t think, given that we are dealing with a temporary issue, that that’s the right move for the province at this time.”
Premier Wall also made clear he would not move from the current municipal revenue sharing.
“We’ve got that one per cent formula, we’re going to keep that one per cent formula.”
Premier Wall said there were two choices “that go completely against the DNA of this current government of Saskatchewan.”
One choice was to raise taxes, with Wall referring to education and carbon taxes.
“The problem, though, ladies and gentlemen, is that a lot of those high emitters are high employers. What would be the impact of any tax increase on the economy right now?” said Wall.
“That leaves us with the last unpalatable choice, and that’s to run a deficit for a short period of time.”
Wall announced the government “planned to run a modest deficit” in 2015-16, and because of continued weakness in the energy sector, in 2016-17 as well.
“This is a last resort,” said Wall, who pledged to SUMA delegates to return to balanced budgets by 2017-18.
Not surprisingly, the opposition New Democrats voiced outrage over the announcement. In a news release from the NDP caucus this week, the opposition claimed it breaks the province’s balanced budget law, called The Growth and Financial Security Act. The news release accused Wall of refusing to disclose details and NDP leader Cam Broten called for MLAs to return to the legislature to “deal with the financial mess.”
“Saskatchewan people deserve so much better than a premier who is running massive deficits but still making, and hiding, bad spending choices,” said Broten.
