Job cuts to offset PST losses

Moe to reduce civil service by 5% to make up for shortfall in tax

The partial reinstatement of provincial sales tax (PST) exemptions for insurance in Saskatchewan will be paid for through workforce reductions in government.

Announced Monday, the removal of the PST on agricultural, life and health insurance will cost the province $65 million in projected revenue this fiscal year and $120 million in the upcoming one.

To offset that loss in revenue, Premier Scott Moe’s Saskatchewan Party government will aim to reduce the size of the government workforce by five per cent.

This is what Moe campaigned on during his recent party leadership bid: to reinstate the PST exemptions in health, agricultural and life insurance and pay for it through a five-per-cent reduction in government. Neither Finance Minister Donna Harpauer nor Moe mentioned the workforce reduction on Monday when they announced the PST change, but when asked about it directly Tuesday, they confirmed the plan as campaigned on remained intact.

“That is still our plan,” said Moe, adding it fits with his broader goal of getting the province back to a balanced budget by March 2019.

Asked Monday where the replacement funding for the forgone PST revenue would come from, Harpauer told reporters “the deliberations are happening now on the budget going forward” and that a third-quarter update being released Friday will “demonstrate how we’re going to manage this lack of income ... as well as the measures we’ll have to stay on track.”

On Tuesday those measures becameslightly clearer, when she said, “We’re going to do another rollout focus on workforce adjustment.”

She said workforce reduction plans are “always where we’d look first” to find savings, and that it is “an ongoing exercise that governments should take, otherwise if you don’t mindfully watch the growth of government and don’t pay attention to it, that’s how governments grow and become very burdensome under their own weight.”

A financial update on Friday is expected to further detail the province’s plan to offset the loss of PST revenue.

NDP finance critic Cathy Sproule

That’s how governments grow and become very burdensome under their own weight.

said government cuts lead to fewer services and that is “not something our economy can withstand.”

She cast doubt on the ability of Moe’s government to balance the budget on its schedule.

“For me, it’s further evidence of scrambling and incompetence, they don’t really know — they’re making it up on the fly,” she said.

Saskatchewan Government and General Employees’ Union (SGEU) president Bob Bymoen said the province reducing the public sector workforce “sounds like the same old playbook” because the Sask. Party government continually replaces those jobs with costly private sector contractors, so the “cost of running government keeps going up.”