The provincial deficit has ballooned to $1.2 billion, and Premier Brad Wall says he is leaving nothing off the table in how to address it.
Tax increases, health care and education job cuts and wage rollbacks were all on the table, the premier indicated in his address to the Saskatchewan Urban Municipalities Association convention in Saskatoon on Monday. But Wall also indicated the deficit situation would be dealt with, if not this year then in the immediate future.
Wall painted a bleak picture of the province’s finances. Overall, non-renewable resource revenues had gone down eight per cent for this fiscal year, the premier noted. No relief was in sight for resource revenue for oil, uranium or potash, and the premier said that has begun to make an impact on general revenue as well from income taxes and PST.
Meanwhile, crop insurance claims due to the late harvest were “up a quarter-billion dollars over what was last reported, in the last budget,” said the premier.
“All of this gives me the unhappy duty to inform you and through you to the people of the province that the deficit right now is about $1.2 billion,” said Wall. “So the question becomes for all of us, how will we meet this challenge? How will we deal with this deficit?”
Wall said the government had run on a plan for a balanced budget and were still working towards that goal.
“But even as we strive for that goal you need to know that I am wary and we are wary as a government of shocking an economy that’s showing signs of renewal, or of gutting public service that has come to create a quality of life that’s part of the Saskatchewan advantage that we have been building over the last number of years,” said the premier.
“But you need to know that as we deal with the fiscal imbalance, that everything is on the table.”
Already, ministries have been asked to scale back and programs have been deferred or suspended, the premier indicated. The basic expectation is to freeze the total human resources cost of government, the premier said.
Wall told delegates that one scenario includes tax increases along with significant job cuts to 4,900 health care workers, as well as layoffs in education and in supports for vulnerable citizens.
The government has also considered a rollback of public sector wages, in addition to a freeze, he said. “Our hope is we can work together to achieve the cost containment that we need,” said Wall.
As for municipal revenue sharing, because of the drop in PST revenue Wall said municipalities would be getting less. “You know that already,” said Wall.
He also said revenue sharing had more than doubled since his government came to office. The premier suggested changes could come to the way PST is collected.
“We exempt a lot of things from PST in the province. We’re asking if that’s proper going forward, especially given the fiscal situation we’re in.”
In speaking to reporters afterwards, Wall made clear the budget situation would be addressed, whether it was this year or in the near future.
“Either way, we’re not going to procrastinate. We’re not going to do what other jurisdictions are doing, and what happened in the past in this country where provinces and the federal government said ‘ah, we’ll balance it somewhere down the road,’ and didn’t set a specific goal and didn’t have a basic plan to get to balance. And we all saw the results of that.”
For their partners in SUMA, “we have to let them know that revenue sharing is on the table, and grants in lieu are on the table,” said Wall.
The premier later added, “We’re not going to punt on this. We’re not kicking the can down the road. We’re seeking to balance this year, and if it’s not this year it has to be a very short term, very clear, transparent way to get there because, well, we all know what happens if you procrastinate on deficits.”
In speaking to reporters, SUMA interim president Randy Goulden said municipalities were expecting a 5.1 per cent decrease in municipal revenue sharing. She also emphasized there was a great deal of concern about further decreases and the impact that would have on municipal budgets.
“There is nowhere to go, there is nowhere to download,” said Goulden.
“We cannot run deficits, we cannot budget for deficits, that’s the law. So we can either increase our property taxes and fees and services, or we decrease services to our citizens that live in this province.”
Opposition leader Trent Wotherspoon heard Wall’s address from inside TCU Place. In speaking to reporters afterwards, Wotherspoon held nothing back, accusing the premier of lying.
“It’s disgraceful. The premier of Saskatchewan lied to Saskatchewan people outright time and time again in the lead up through an election and beyond, and that’s just not on,” said Wotherspoon.
“This is a premier who hasn’t been honest, and who [has] masked and hid his incredible mismanagement and the train wreck that he’s been creating. A premier who couldn’t save a dime during the best years, leaving us so vulnerable here today.”
Wotherspoon accused Wall of leaving municipalities, school boards and health care workers “hanging in the lurch.” The NDP leader also pointed to “mismanaged” projects such as the Regina bypass, which “went from $400 million to over $2 billion, and the money is flowing to a company from France, if you can imagine.”
“What are the facts? Open up the books,” said Wotherspoon. “What can we trust from the Premier? Not much.”
