Reversing budget moves sends wrong signal: prof

Professor says moves can be viewed as poor planning and lack of confidence

The provincial government’s decisions to reverse multiple cuts announced in its 2017-18 austerity budget, despite Finance Minister Kevin Doherty’s assurance that it was not prepared to do so, is sending the wrong signals to the electorate, warns a University of Regina political science professor.

One week after partially walking back on its decision to strip $36 million in grants from cities and towns, Doherty said the government would not walk back any other cuts. However, it has since restored millions of dollars in funding for libraries, funerals and hearing aids. Last month, it changed course on how provincial sales tax is applied to construction projects.

“It’s never a good idea for governments to do that because it makes them look like they don’t know what they’re doing — that they hadn’t done sufficient planning or hadn’t done effective consultation, and don’t have confidence in their own plan,” University of Regina political science professor Ken Rasmussen said Thursday in an interview.

Rasmussen and University of Saskatchewan political studies professor Joe Garcea agree government reversals were likely motivated by public outcry and poor planning, and represent an attempt to repair its reputation. Despite being in power for a decade, the Sask. Party government had very little experience with the “politics of downsizing,” Rasmussen noted.

The Sask. Party government’s popularity has plummeted since the budget was released on March 22. A Mainstreet/Postmedia poll conducted in May found that support for the Sask. Party has dropped 24 points over the last year, while a more recent Angus Reid Institute online survey concluded that the government was down 16 points compared to the same time last year.

Rasmussen said that “in some ways the damage was done and it is really unlikely (reversing cuts) is going to undo it,” while Garcea said the government’s future depends on the health of the provincial economy: “If it gets better, this budget will be forgotten and in fact they might even be rewarded for it. But if things don’t improve … they’re likely to be punished for it.”

Doherty was unavailable for an interview Thursday. Government spokesman James Parker said in an emailed statement that the province “continues to listen to the people of Saskatchewan and, where necessary, we have made a small number of adjustments to the budget decisions announced March 22 — in consultation with affected stakeholders.”

“The overall rationale for decisions taken as part the 2017-18 Budget has not changed,” Parker said in the statement. “By controlling and reducing spending, and by modernizing and expanding the tax base, our government is ensuring that the economy remains strong and that we are in a position to return the budget to balance in three years.”

The 2017-18 budget, which aims to halve a $1.3-billion deficit stemming from collapsing oil and potash prices and, according to former finance minister Ken Krawetz, a reluctance to raise taxes, has been widely criticized since its introduction. The government responded by reversing several of the most controversial cuts.

The government refused to back down on its controversial decision to shutter the Saskatchewan Transportation Co., but admitted that slashing $4.8 million in funding for libraries and about $600,000 earmarked for funeral services for the indigent were “mistakes.” Last month, it extended access for some children to a now-scrapped $3-million hearing aid plan.

On June 30, the province partially reversed a decision to apply PST to all construction services. Construction firms can now buy lumber, plywood and fasteners without paying PST, and the threshold above which PST is applied to cost increases on renovation projects started before April 1 has been raised to 25 per cent from 10 per cent.

The Saskatchewan Construction Association (SCA) lobbied hard against the application of PST to construction before the budget was released, describing it as a tax on growth, but SCA manager John Lax said Thursday that the Ministry of Finance was open to ideas and the changes introduced last month will be “huge” for the province’s construction companies.

It’s never a good idea for governments to (reverse a budget decision) because it makes them look like they don’t know what they’re doing.