Doherty builds in $300 million ‘cushion’

For the first time in the history of the Saskatchewan Party government, there is a contingency fund built into the budget.

The 2017-18 budget, released last Wednesday, shows the province is setting aside $300 million in justin-case money.

Consider it an in-year rainy day fund. It allows the government a bit of wiggle room should certain costs end up being higher than expected.

And that’s exactly what happens year after year. Budgets, after all, are simply a plan on how to spend money.

“Those are forecasts based on what we think may happen this year,” said Finance Minister Kevin Doherty.

Sometimes not everything goes according to plan.

“Most governments have a contingency line in there,” said Doherty.

“We’re just trying to build in some cushion there.”

In November — five months after the 2016-17 budget was made — the province approved $161 million in additional spending.

That money was used to cover the cost of increased usage of social services, correctional facilities and health care, to make repairs at post-secondary institutions as well as to help pay for disaster assistance and crop insurance.

Then, in February, the province approved another $132 million to cover costs of a government pension plan and to pay a bill due on the Regina Bypass. There was also a need for more crop insurance money.

In all, the province had to spend about $294 million more in the last fiscal year than it had planned on in the budget.

“We’ve never actually seen them be on budget. I think (the contingency fund) gives them some room to be off,” said Cathy Sproule, NDP finance critic.

This year, the province is aiming to avoid being off budget by having the $300 million in place, but some of the programs the province under-budgeted for last year are getting even less money this year.

Post-secondary institutions are getting five per cent less, as are correctional facilities.

The Provincial Disaster Assistance Program (PDAP), which helps people recover from disasters, is getting the same amount of money it got last year.

Fire safety funding is down $1 million this year and there’s less money being allocated for crop insurance.

Doherty says funding for line items such as PDAP, crop insurance and fire safety are based on five-year averages.

“Every now and then, you’re going to have a huge situation like we had in the La Ronge area a couple years ago (with fires),” he said, adding there are dollars available now if the province has those kind of circumstances.

Other areas that were underbudgeted last year are getting an increase in funding to prevent the need for in-year budget adjustments from happening again.

That’s largely the case in social services, which saw the biggest overall spending increase in the budget.

The three most used social benefit programs received about 12 per cent more in funding, while usage over the past year has increased by only about 10 per cent.

Meanwhile, there could be another need altogether for the $300 million contingency fund. The province’s budget shows it plans to save $250 million by reducing public sector wages by 3.5 per cent, but that rollback must first be agreed to by the unions involved.

So far, unions have shown little appetite for doing so. That means the province may need a $250 million cushion if the reduction doesn’t happen.

This year, for the first time in 10 years of Sask. Party budgets, that cushion exists.

We’ve never actually seen them be on budget. I think (the contingency fund) gives them some room to be off.