Mandryk: Plan to get budget back on track could be derailed

You could almost hear Finance Minister Donna Harpauer whispering, “I think I can. I think I can.

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The theme of Saskatchewan’s 2022-23 budget is to get the province’s finances back on track, which could help do just that…provided we don’t see another derailment.

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This happens with alarming frequency in the flat, bald prairies where annual provincial budgets often succumb to bad weather or the volatility of commodity prices for natural resources.

Ironically, the “Back on Track” budget was introduced during a week when these tankers and grain tankers temporarily stopped crossing Saskatchewan.

First, however, commend the Saskatchewan Party government for at least trying to slow the runaway freight train that is the province’s public debt without leaving more blood on the tracks of beleaguered taxpayers or those who desperately need government support.

Yet while the projected deficit of $463 million is one-fifth of the $2.2 billion deficit in 2021-22, public debt exceeds $30 billion this fiscal year – of which $9 billion is government debt. operation of the general revenue fund which will cause us to steal up to $622 million in interest payment charges.

After projected new deficits of $384 million in 2023-24, $321 million in 2024-25, and $165 million in 2025-26, public debt will exceed $35 million by 2027. This light at the end of the deficit/debt tunnel is still very seems to be the proverbial train.

At least we weren’t hit by the brutal locomotive that was the 2017 budget which dealt with a billion dollar deficit the previous year by raising the provincial sales tax by one percentage point and reducing services, including closing Saskatchewan Transportation Company bus service.

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However, the 6% PST will apply to “sporting events, concerts, museums, fairs, gym memberships and golf rights” after October 1. Each cigarette will cost 2 cents more (now 29 cents provincial tax per cancer stick). ).

Revenue will be $17.2 billion in the coming fiscal year and is largely driven by truckloads of oil and potash. This is good news in that all non-renewable resource revenues are 119% higher than last year, but bad news in that the budget’s reliance on these volatile resources doubles to 16.9% of all government revenue.

For now, the spoils of war in Ukraine and the subsequent boycott of Russia and Belarus mean about $420 million more in potash royalties and nearly $77 million more in resource surcharges. . Oil is pegged at a plausible average price of US$75.75 a barrel (West Texas Intermediate) – modest compared to Wednesday’s price of $114 a barrel.

This will be on top of approximately $104 million more in PST revenue from expanded taxes and improved economy. These revenues are needed to offset a $230 million drop in combined corporate and personal income tax revenues that is the hangover from the pandemic downturn and last year’s drought that has led to a 47% reduction in agricultural production.

All this allows the government to spend $17.6 billion in 2022-23, including a peak of $3.2 billion in capital spending. However, it should be noted that these are previously announced public sector infrastructure projects. Saskatchewan. The party administration has acknowledged that the $13.6 billion in private sector investment, including canola crushing plants, potash mines and forestry and mining, will do more to create jobs. (about 12,000 in construction) than the government.

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It also allows the government to focus on program spending, including “funding for thousands more surgeries, to reduce waiting times” and “a dedicated agency to recruit doctors, nurses and other medical professionals” – 3.5 million dollars for the recruitment of doctors and 1.5 million dollars. for the recruitment of nurses mainly intended for the Philippines.

A 2022-23 budget with a significantly lower deficit that meets health care needs without massive tax increases or cuts? You could almost hear Finance Minister Donna Harpauer whispers, “I think I can. I believe I can.”

But perhaps we should think again before declaring this budget a complete success.

Beyond this potential revenue derailment, the budget cargo is not as valuable as the government claims.

For example, 2022-23 health spending is only $288 million more than last year’s original budget and only $3.5 million more than what we ended up spending.

That added $21.6 million for the surgical plan seems like a lot, but Sask. The Party government under Brad Wall actually spent $200 million over five years for this purpose. Likewise, Harpauer acknowledged that we may have to wait until the middle of the year in October to see if the $95 million set aside for COVID-19 concerns will be enough to deal with a health system in lack of staff.

But this may be the beginning of stable and reliable rail services.

Hopefully we are not on a dead end.

Mandryk is the political columnist for the Regina Leader-Post and the Saskatoon StarPhoenix.

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