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Sometimes It's No Fun Being Right

Author: Richard Truscott 2002/09/02
For several years now the Canadian Taxpayers Federation (CTF) and other observers have been warning the Saskatchewan government that it needs to get its spending priorities in order. Those warnings went unheeded by Premier Lorne Calvert, who launched his tenure with an inaugural spending spree that added $484 million to the cost of government. While the tax base, the economy, and the population have remained relatively stagnant, spending has increased by 31% in the past five years, including Calvert's inaugural jump of 9%.

The Premier was also warned by the Provincial Auditor, among others, to be wary of accounting practices that removed spending from the public eye and control of the legislature, or that served no purpose but window dressing. These were the kind of accounting practices that the Tories employed to disastrous effect in the 1980s. These warnings also went unheeded, most recently in the spring budget, where the "Education Infrastructure Financing Corporation" was created to move $90 million in spending out of the public light and into the bureaucratic dark.

While the warnings sounded, the only calls that Calvert heard were from interest groups, unions, and the bureaucracy asking for more spending. As for the warnings, the government plugged their ears with wads of money borrowed from the Fiscal Stabilization Fund (FSF) which allowed them to claim that "the budget was balanced". The FSF is almost gone as a consequence of this borrowing, but in a very real way the FSF was never really there. It was, and is, an accounting maneuver and a cover name to disguise borrowing and smooth over operating deficits. It's a "Media Spin Control Fund" so let's call it what it is.

The wheels came off the spin machine on the August long weekend, when the Public Accounts were finally made public. Finance Minister Eric Cline barely managed to keep General Revenue "balanced" last year by borrowing $280 million from the Media Spin Control Fund. This year the government will borrow at least $306 million from the Fund. This will empty the fund and presumably require the invention of another fictional fund. Add it up, and over two years the government was forced to borrow about $600 million to keep General Revenue Fund "balanced" (what exactly "balanced" means in today's Saskatchewan, is not clear).

But you can't fool all the people all the time, and a lot of people refused to buy the spin about the budget being balanced. The Enron-ization of public finances is a scandal, but the real shocker is the $483 million DEFICIT in Saskatchewan's public sector - the first such deficit since 1994. Just last year the public sector books showed a $461 million SURPLUS. This is a billion-dollar U-turn, and it is disastrous.

So where does that leave the people and government of Saskatchewan The government is in a serious deficit situation for the first time in many years. Program spending continues to increase, and not just in "emergency" areas like crop insurance or fighting forest fires. Last year 23 of 32 government bodies increased operating expenses, indicating little regard for priorities.

It's almost enough to make a person miss the Roy Romanow years. For all the flaws and tax increases of his government, he did managed to right the ship after the Tories botched turn at the wheel, and started to put the province's finances on a more even keel. But when Captain Calvert took over he immediately steered for the rocks. This is not what the people of Saskatchewan signed on for in the last election, including the government's supporters. It's time for Calvert to face a public vote.

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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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