Saskatchewan dives back into deficit

Author: Gage Haubrich 2024/03/31

The Saskatchewan government is beginning to look a lot like the Roughriders. And not in a good way.

For the last decade, every year we hope the Riders will break their Grey Cup drought, but then all we end up with is disappointment.

That’s the same song and dance the government is giving Saskatchewan taxpayers with its latest budget.

Back in March 2023, Finance Minister Donna Harpauer stood up in the Saskatchewan Legislature and announced a $1 billion surplus and decreasing debt. Now one year later, that surplus has vanished, and the government announced a new $273 million deficit for 2024-25.

The government is claiming the budget will be balanced next year, albeit on a knife’s edge with a predicted surplus of only $18.5 million, but it’s getting increasingly difficult for Saskatchewan taxpayers to believe it.

Last year, the government promised this year’s budget would be balanced too.

The most frustrating part is the government didn’t lift a finger to find any savings. Out of the 11 main spending lines, the government is only spending less on one element of the budget this year compared to last year.

This is a whole of government problem. This year, government revenue is increasing by less than one per cent over last year’s budget while spending is increasing by 7.9 per cent. It doesn’t take an economics degree to realize that math doesn’t work out.

And the math hasn’t worked out for a long time. Out of the government’s last ten budgets, only one has been balanced, and that was on the back of a massive resource revenue windfall, not because of any fiscal prudence from provincial politicians.

Failing to find savings and continuing to run deficits has consequences for taxpayers. By the end of the year, the debt will be $21.1 billion, or $17,309 per Saskatchewanian. The budget also projects the debt will continue to rise in the future. By 2028, the debt will reach $28 billion.

Now that’s a big number, but the worst number is the amount in interest payments the government is paying on that debt. This year, the government is going to waste $728 million on interest payments. That’s more than $60 million per month.

That $728 million can’t be used for tax relief or services, it’s wasted on interest payments because the government continually fails to balance the budget. Put another way, that $728 million could be used to hire more than 7,000 nurses or teachers, but instead it’s sent east to line the pocket of some Bay Street banker in Toronto.

Former premier Brad wall dreamed of a debt-free Saskatchewan and recognized the cost interest payments have on taxpayers. In 2008 he said: “Every single dollar you send to a bank to pay interest on debt, you lose an opportunity to do something else.” That’s still true today. And Saskatchewan gets further and further from that debt-free dream every time the government fails to balance the budget.

The one bright spot in this budget is the government deciding to freeze the small business tax rate at one per cent instead of doubling it to two per cent. But a freeze isn’t enough. The government needs to cut the small business tax altogether to help businesses stay afloat.

The budget also offers no new tax relief to cash-strapped Saskatchewanians. The opposition NDP has been calling for the government to slash its 15 cent per litre fuel tax. In a province like Saskatchewan, where long drives are the norm, that relief would have gone a long way to help families make ends meet.

The government could have used this budget as an opportunity to get spending under control and start reducing debt. Instead, Saskatchewan is diving back into deficit, hurting taxpayers who are now on the hook for even more debt and interest payments while providing them zero tax relief.

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