Budget heading towards surplus with no new taxes, major service reductions

Finance Minister Donna Harpauer’s first Saskatchewan budget kept the province on track to eliminate the deficit by 2020 with no new taxes. Nor are there any draconian program cuts. A deficit of $365 million is estimated for the year ended March 31, 2019 with a modest $6 million surplus the following year. Revenues will increase by $80 million this year mostly from non-renewable resources, Crown corporation profits and government fees to $14.24 billion. Expenses of $14.61 billion will decline by $200 million with $35 million this year from a two-year “efficiency and attrition” program in the civil service. Savings of $5 million come from ending the rental assistance program in July. Municipal revenue sharing drops $10.7 million for urban municipalities and $4.9 million for rural municipalities. Moose Jaw, with $5.97 million, will have $410,000 less funding. There is no carbon tax in the budget even though the federal government plans to impose a carbon tax if the province does not implement one. Broadening the PST to used light vehicles is one of the few tax changes but exemptions exist for vehicles priced under $5,000 and for inter-family transfers. The expanded tax will raise $95 million. The PST exemption for Energy Star appliances is terminated No provision was made for PST on cannabis due to the uncertain revenue. Job creation plans include a 15 per cent tax credit for value added agriculture investment of $10 million, a 45 per cent tax credit for eligible technology startups and a $700,000 two year program to gather data on gold, base metal and diamond resources. Seventy per cent of the budget is once again devoted to health, education, and social services. Health care spending is up 2.5 per cent to $5.77 billion. New funding includes $11.4 million for mental health services, $16.8 million for operating capacity at the Jim Pattison children’s hospital in Saskatoon, and $14.2 million for the new Saskatchewan Hospital at North Battleford. And $700,000 will increase coverage to 100 per cent for HIV drugs. Education spending of $3.26 billion declines, mostly by $268 million in reduced teachers’ pension liability. School divisions will receive an extra $30 million this year. An added $20.8 million will fund 2,500 more daycare spaces by 2020 under a federal-provincial program. Social services will receive $1.39 billion, an increase of 1.8 per cent. The budget directs $10.4 million to caregivers of disabled persons and $9 million to disabled adults with increased needs. Rural crime reduction got an another $4.9 million. A $2.7 billion infrastructure program involves some local highways such as passing lanes on 100 km of Highway Six and Highway 39 and 800 km of province-wide road upgrades. The public debt will increase by $1.8 billion to over $20 billion. About half the increase comes from the Saskatchewan Builds Capital Plan and the rest from Crown Corporation debt. “The pursuit and ultimate realization of the fiscal plan ensures the long-term sustainability of the services and programs Saskatchewan people value,” said Harpauer. “A plan to balance ensures a stronger Saskatchewan in the future, better positioned for growth and better able to meet the challenges ahead.” Ron Walter can be reached at ronjoy@sasktel.net