Comments on the closing of the fall session of the Saskatchewan Legislative Assembly December 3, 2009
After sitting through the fall session I am more concerned than ever about the future ability of our provincial government to manage tax payer’s money, plan and support what should be a growing economy, and protect vulnerable people from the affects of both community growth, and government spending cuts.
This was a session that pointed out clearly the Wall Government’s mismanagement of the province’s financial resources and highlighted the fact that Brad Wall inherited a provincial treasury worth $2.3 billion and in just two years took Saskatchewan to a $1 billion deficit.
For the provincial treasury, it’s been “boom to bust” in just two short years. How did Saskatchewan get in this predicament? Two words come to mind, mismanagement and incompetence.
While there was virtually no substantive legislation introduced for debate and certainly not much of that was passed, there was an acknowledgement that the Wall government was going to have to break a lot of its election promises because of their financial mismanagement.
Let’s not forget the budget introduced in March ’09 called for 20% of provincial revenues to come from Potash sales. This was forecast to be $1.8 billion, but the return for the province turned out to be just slightly more than $100 million. Regardless of the failure of the government to budget properly, other revenues (such as the PST) continued to roll in and the government continued to spend (it planned to spend 32% more in 2009/10 than in 2008/09) as if it had no revenue challenges. Now, in the last few months of the year, the Wall government is trying to correct its mistakes, and as a result they are going to break promises, cut services and programs, and put off capital spending for a period of time that nobody can adequately predict.
For example, it now appears that municipalities will not get the revenue sharing funding they were promised meaning that local property tax will have to increase. It appears that school boards will not get the funding they were promised which will likely lead to rural school closures, a reduction in classroom programs, and perhaps no support for increased teachers salaries which are due to be put into place for 2010. It appears that the continuation of education property tax relief will not be forthcoming meaning that homeowners expecting a reduction in their education portion of property tax will not see this, and therefore they will be facing what is really a property tax increase.
And, let’s not forget that the Children’s Hospital will not proceed as planned, and 13 long-term care homes for seniors in rural Saskatchewan, including one planned for Meadow Lake will also not proceed as planned. Other projects such as the replacement of Saskatchewan Hospital will only proc3eed as “funds become available” and as such are considered in jeopardy given that funds will likely not become available for some years to come.
A University of Saskatchewan Economics Profession, Eric Howe, known for his conservative views was quoted in late November saying: “If you look just three years ago, the provincial government in Saskatchewan had revenue of about eight billion dollars and nonetheless had a surplus of nearly one billion dollars. Now, in 2009 even with the low values of potash revenues the Saskatchewan provincial government has a revenue of ten billion dollars … and is running the second largest deficit in the history of the province … I don’t accept at all that there is a problem here, in terms of there not being enough money.”
In reality, expenditures in Saskatchewan are up for the 2009/10 fiscal year by 32%. At a time when revenues actually increased year over year, despite the potash blunder, spending increased at a much greater rate than revenues and the Wall government finds that it has had to run a deficit, skim more money out of the province’s savings account and its Crown Corporations, and cut or defer capital spending programs all over the province. It is this type of mismanagement and incompetence that did in the Devine Conservative government in 1991.
All in all, this was a disastrous session for the Wall government and the people of Saskatchewan. Thanks to questioning from the opposition New Democrats it was clearly established that before year end the Wall government will make $293 million worth of cuts to programs, services and infrastructure. This will affect thousands of families who will now pay the price for Wall’s reckless budgeting and out of control spending.
This is also just the tip of the iceberg as this government must now go into meetings to devise next year’s budget. They have already identified a spending problem that will continue into next year, they have identified a lot of expensive projects that they have deferred into next year, and they don’t have any idea of what revenue will be available to them. This situation is unprecedented. It can only mean more broken promises, more cuts, and even fewer services and programs for Saskatchewan people.
Entries (RSS)