Finance minister’s juggling act a mixture of reality, fantasy

This financial exercise of releasing spending estimates with no revenue plan attached to it was nothing more than a fairy tale, but with markets crashing amid a global pandemic, at least we had Donna Harpauer with at least one foot standing firmly on the

Saskatchewan Finance Minister Donna Harpauer decided to forego the tradition of purchasing new shoes for this “budget.”

Given that, at best, it was never anything more than a half-budget expenditure statement anyway, maybe it would have been better if she showed up Wednesday, à la Cinderella, in just one slipper.

This financial exercise was never anything more than a fairy tale — more Brothers Grimm than Disney. But take some solace that if Harpauer did have one foot in the glass slipper, at least the other one seemed firmly planted on the ground.

The fantasy aspect begins with calling it a budget, given that a real budget has accounting for both expenditures and revenues and Harpauer provided none of the latter. There was some vague notion that the 3.1 per cent increase in overall government spending will somewhat be offset by a $1.3 billion “contingency fund” in “liquid cash reserves,” which, by definition, doesn’t really mean cash on hand at all.

Finance ministry officials did acknowledge on paper that public debt in 2020-21 will increase a whopping $1.36 billion to $22.74 billion after a significant capital spending spree. Asked for even the roughest possible estimate of what the revenue situation might be when an actual budget comes down later, an official explained:

“If I were to give you the answer to that at 8 a.m., it would have changed by now.” That was at 10 a.m. In the two hours since the opening of markets, the West

Texas Intermediate price of oil had fallen 26 per cent to US$22 a barrel from $30 a barrel the day before.

The 2020-21 Saskatchewan budget is going to be in deficit, and perhaps massively so — a situation that could easily rival 2017 and, frighteningly, could potentially rival the deficit of the Progressive Conservative government in 1991 (the last budget in the province that was not passed by the legislature) that sent the province into a tailspin that landed us near insolvency.

In one especially sombre moment at her news conference on Wednesday, the always effervescent Harpauer offered this sobering thought in answer to a question about the realistic possibility that the supposed $1.3 billion reserve will not be enough: “It’s not a huge concern right now, but if it were in that position, we wouldn’t be the first province.”

It was this at-least-one-booton-the-ground Harpauer for whom we should be somewhat grateful.

Yes, what passed for a “budget” on Wednesday is largely a fairy tale, and that the government didn’t even go through the pretence this was “budget bill” — presenting it as a statement at 1:30 p.m., shortly after more bad news of COVID-19 outbreaks emerged — says everything. By the time the legislative sitting resumes — quite likely, months away — a whole new budget will be needed. Hopefully, it will be delivered under far better circumstances.

“The government is taking the unusual step of tabling the spending estimates without revenue forecasts for the coming year because of the ongoing COVID-19 pandemic,” Harpauer said of her plan to spend $14.15 billion in the next year — a plan that she insists her government will stick to, even if it isn’t right now offering so much as a clue as to how we are going to pay for it all.

That expenditure plan would amount to a 3.1 per cent increase from last year’s 2019-20 budget that will include $2.7 billion in capital investment in Crown Corporations and a government proper that will spend $5.77 billion for health care — that’s $211 million, or 3.8 per cent, more than last year.

Unfortunately, there seem to be no solid figures for what will be dedicated to fight COVID-19 because of the fluidity of the situation. (“We’ll spend what we need to spend,” officials said.)

However, there were other important health spending commitments, including $435 million for mental health and addictions ($12 million more than last year). Part of that money will go to establish “specialized crystal meth in-patient treatment services in Estevan,” which is badly needed in this province.

There simply isn’t specific money to address classroom overcrowding and composition at the heart of the current Saskatchewan Teachers’ Federation (STF) job action, but there is a plan to spend $42.1 million more on school operations and $34.8 million on school capital. As per usual, this Sask. Party government is trying to solve problems by simply putting up more buildings, but no one can argue that a new joint-use school in Regina’s Harbour Landing as well as joint-use consolidation of the St. Peter’s, St. Michael and Imperial elementary schools aren’t needed.

Harpauer stressed that her government — pandemic crisis or not — won’t shy away from building, and that could be a good thing. When we come out on the other side of this crisis, we will very much need economic activity — especially given the revenue government coffers are now taking, not just from oil but also sales and liquor taxes.

A provincial sales tax rebate on new home construction — as much as 42 per cent of a $350,000 home — will also be offered as economic stimulus.

Normally, such a move by any government would be a source of outrage — especially in an election year and especially from a government that had been playing games with an early election and even using the arrival of COVID-19 as an excuse. For this, history will not look on Premier Scott Moe’s handling of this crisis kindly.

But perhaps Moe and his government can make amends. One way of doing so would certainly be to demonstrate firm leadership, like Harpauer did Wednesday: Asked why the PST wasn’t extended further, Harpauer said it was “all we could afford” at this time.

Asked about tax hikes to pay for all of this, the finance minister replied: “At this time, I don’t think it would be a wise decision to backfill a catastrophic situation by raising taxes and shocking the economy.”

Asked about how she’s been reacting to the oil price drop, Harpauer lightly replied that we “can’t print the words” she used.

Clearly, she’s no fairy princess, but we don’t need one right now. Nor will some fairy godmother bail us out.

We need someone with at least one foot on the ground.

Mandryk is the political columnist for the Regina Leader-post and Saskatoon Starphoenix.

If I were to give you the answer to that at 8 a.m., it would have changed by now.