The government can’t waste this massive windfall.

The price of oil is surging. That means that the provincial government is likely to end up with a massive resource revenue windfall this year.

That’s a blessing for the Saskatchewan government that just released a budget that increases the provincial debt by $3.4 billion and wastes more than $1 billion on debt interest payments.

For every dollar increase in oil prices, the provincial government collects roughly $16 million in extra revenue. With oil now trading up to $95 per barrel, the provincial government could receive about $560 million more this year from oil revenues. At $75 a barrel, the government will take in about $245 million extra.

This surge in revenue means the government could cut its borrowing this year by up to 17 per cent without lifting a finger. The key is for the government to show discipline instead of immediately spending the money.

Surely, this time, the Saskatchewan government will learn this obvious lesson: Resource revenue windfalls don’t last forever.

The last big windfall for the government came in 2021. In that year, the government brought in 25 per cent higher revenue than the year before, largely due to increased natural resource revenues.

The average revenue increase was about one per cent in the five years prior.

But in 2021, the government increased spending by 25 per cent.

If the government had showed fiscal discipline and held the line at the previous year’s spending, which was the highest in the history of the province, the government would have paid down the debt by $2.5 billion instead of increasing the debt by $1.4 billion.

That surplus could have paid off more than 14 per cent of the province’s entire debt in one year. Instead, the government permanently ratcheted up spending.

The government was blessed with another 14 per cent revenue increase in 2022. If the government hadn’t ratcheted up spending in 2021 and only increased it by population growth and inflation, the province could have paid down the debt by $4.4 billion that year.

That could have paid off an additional 28 per cent of the province’s debt.

That’s the power of fiscal discipline.

When you get a bonus at work, you shouldn’t count on that extra money every month. You should use it to pay bills or make an extra mortgage payment, not take out a loan on a new boat.

The government needs to treat this windfall the same way. Then it needs to go further and look for savings to stop the debt from increasing at all this year.

The overspending needs to stop. Taxpayers can’t afford it. But that can only happen if the government stops treating resource booms as a raise and realizes that it’s just a one-time bonus.

The government needs to use this and any future windfalls to reduce borrowing and pay down the debt.

And in the future, the government should set up a resource revenues heritage fund to safeguard Saskatchewan’s financial future.

Here’s how it works: The government takes some of the resource revenue money that it gets every year and puts it into a fund that politicians can’t touch and invests it.

The government can then earn interest off the revenue and use that to spend even long after the province’s resources have run dry.

Alaska and Norway have had heritage funds for years and are reaping the benefits. Every Alaska resident got $1,000 last year from the investments of its heritage fund. Norway’s heritage fund covers about 20 per cent of its government’s budget with its earnings.

That can happen in Saskatchewan. But only if the government chooses to treat resource revenues as a long-term asset instead of a short-term spending opportunity.

When the first-quarter update is released and is forecasting an increase in non-renewable resource revenue, that extra revenue can’t come with extra spending.

That’s the test that will show if the government cares about delivering for taxpayers.

Saskatchewan can’t afford to blow another resource boom.