NDP continues steady march into province's private sector
Author:
David Maclean
2003/08/03
The province's Our Future is Wide Open campaign, plagued by cost overruns, accusations of partisanship and questions about its effectiveness, is intended to tell the world that Saskatchewan is open for business. Unfortunately, this message is drown out by the government's steady march into every damp crevasse in the province's economy.
On July 11, Saskatchewan's Mother-of-all-Crowns Sasktel announced a $1.75 million partnership with private call center operator Interactive Tracking Systems Inc. No less than five days later, the Saskatchewan government announced a $3 million investment in Calgary-based Pangaea Systems - also a call center operator. As always, the purpose of the investments is to lure jobs to Saskatchewan, although it's tough to pin down just how many.
These are merely the latest acquisitions in a long line of government interventions going back decades. Our government, either directly, or indirectly through crowns, owns stakes in potato storage facilities, call centers, breweries, fertilizer producers, pulp mills, organic farms, financial firms and generic food companies. Trust us, the list goes on and on.
Just days after these "investments" were announced, it was revealed yet another government investment had gone sour. Over the last few years, government has poured $6 million into Mind's Eye Pictures - A Regina-based film production company. So eager was the government to build a movie business in Saskatchewan, they actually subsidized construction of a state-of-the-art soundstage. And guess who's the primary tenant of this white elephant -- that's right -- Mind's Eye Pictures.
So, for an $18 million investment ($12 million for the soundstage) taxpayers are left with a bankrupt movie company, and a soundstage that stands mostly empty. If this isn't nauseating enough, the excuses being offered up by Mind's Eye will make you want to seek out the nearest toilet or hospital emergency room. Mind's Eye is claiming that "the events of September 11" have hurt their industry. Kind of tough to buy that, considering Winnipeg is having a banner year for film production - closing in on $100 million in total investment.
Above and beyond the government's dismal performance in private investment, there are greater repercussions for Saskatchewan's economy. There's no question that outside investors see they will be competing against government and choose not to invest in Saskatchewan. There's no competition fiercer than taxpayer-backed crown corporations. Existing in an environment completely devoid of accountability and with virtually unlimited access to tax dollars, crown corporations can out-muscle almost any private sector player.
Economists describe the difference between crown corporations and private operations in terms of budget constraints. Crown corporations budget constraints are considered "soft," as they can sustain losses for a longer period of time because it's impossible for a government to run out of tax dollars. Governments can raise taxes as often as they like. Private sector operators facing "hard" budget constraints, after taking sustained losses, will face bankruptcy due to loss of capital.
July's call center announcements represent $4.75 million tax dollars going toward the immediate creation of 35 or so jobs - almost $136,000 per job. Let's not forget that this is DEFICIT spending - the government's debt grew by hundreds of millions this year.
The province's steady march into the private sector is one of the biggest reasons businesses avoid Saskatchewan like the plague, why our population continues decline, and why our rural areas are in crisis. It's time for government to get out of the business of being in business and let entrepreneurs flourish in "Wide Open" Saskatchewan.