StatsCan casts new light on deficit source

It probably will come as no surprise to most of you to find out that Saskatchewan is facing a structural deficit.

It may be somewhat surprising, however, to find out the budget was also in deficit in 2014-15, according to Statistics Canada. That would mean six of Premier Brad Wall’s nine budgets (after the June 1 presentation) will have been deficit budgets.

It may also be news to Wall — now talking about the need for “some transformational change” in 2016-17 — to learn that the way out of his structural deficit may not be the route he is plotting.

For example, our $5.6-billion health budget is about in line with what all other Canadian governments spend, on a per-capital basis. However, when it comes to education and social services spending, we overspend compared with the rest of Canada. And lawand-order spending is now our fastest-growing cost.

This telling information comes from a huge undertaking by Statistics Canada to reconcile revenue and spending for all federal, provincial and local governments.

The importance of finally having this apples-to-apples comparison cannot be understated, said Doug Elliott, Saskatchewan’s foremost statistician.

“It removes the double counting that can occur when funds flow from one level of government to another,” Elliott wrote in the most recent edition of his publication, SaskTrends Monitor.

This consolidation of revenues and expenditures from the provincial government, municipal governments, school boards and hospital regions also puts a lot of Saskatchewan’s old economic assumptions in a new light. Consider Elliott’s observations in SaskTrends Monitor:

“(All public) Revenues and expenditures (for the province) are approximately $18 billion per year” — compared to the roughly $14 billion cited in the annual provincial budget.

“Over the last five years, revenues and expenditures have increased more quickly than the rate of inflation.”

“(Saskatchewan) has the second-highest public sector spending per capita (Newfoundland was highest).” Although Elliott further noted this doesn’t mean we suffer from a fat bureaucracy because our spending on “public services” — commonly referred to as civil servants, rather than front-line teachers, nurses, doctors and social workers — is well below the national average.

In an interview, Elliott said proportionally high per-capita spending in Saskatchewan — even after eight years of a conservative-minded provincial government — wasn’t all that surprising. “I think in Saskatchewan, we’ve always had this NDP big-government mindset,” he said, adding that government here still has to serve sparsely populated rural and northern areas.

What was perhaps more surprising was seeing health as cost-efficient as it was, Elliott said, noting the average $4,737 we spend each year on the health-care needs of each citizen is barely above the national average.

Given the government’s emphasis on the John Black and Associates lean health efficiencies, one further wonders if Wall’s government has been barking up the wrong tree. According to Statistics Canada numbers, other areas have been in far more dire need of addressing.

Elliott cited the $3,571 per person/year spent on education — more than $1,000 more than other Canadians spend — as not only the most surprising, but also the most troubling. Saskatchewan has some of the lowest high school graduation rates and worst post-secondary graduate retention rates in the country.

“Something is not working right,” the statistician said.

In fact, the size of the gap in our spending on per-capita education must raise some questions about the need for two universities, as many technical institutions as we have or the separate and public school systems, he said.

But perhaps most disheartening is the $2,824 per person spent in Saskatchewan on “social protection” like social services — far and away the biggest difference from the rest of Canada, where the average is about $1,700.

Elliott also ties this to the $1,005 per person/year spent in Saskatchewan on “public safety,” including policing, justice and incarceration. Saskatchewan public safety costs increased by 6.6 per cent from 2010 to in 2015. We now spend $600 per person/ year more than the national average.

So what seems obvious from the numbers is savings aren’t necessarily going to be found in health.

They need to be found in education and social services — the root cause of so many other problems.