Pandemic hangs over Sask. spending plans
Saskatchewan’s legislature shut down on Wednesday after the government revealed a $14.15-billion spending plan with no estimate of how much the COVID -19 pandemic will cost the health system.
The spending estimates will not be passed by the legislature. Only 19 MLAS showed up to an afternoon sitting. They voted unanimously to adjourn until further notice and filed out of the darkened chamber.
But Premier Scott Moe argued that the estimates are a reliable guidepost to what cabinet will spend through special warrant — with one potentially enormous exception.
“Most of that investment, I think, is relatively solid, with the exception of what happens with COVID -19,” said Moe.
“I don’t know what that number will be in Saskatchewan,” he added. “But whatever it is, that funding will be there.”
It’s so far unclear how much revenue the government will bring in to pay for it, though the finance ministry did tout a $1.3-billion “contingency” of liquid assets that will keep the government solvent.
Finance Minister Donna Harpauer was unwilling to provide any clue, even to the nearest billion, about how much the pandemic will cost it in lost taxes and resource royalties.
“It’s absolutely impossible and very unreliable to come forward with any data at this point in time that’s realistic or won’t change very quickly,” she said.
Harpauer acknowledged that the province “will go into a deficit position because of this situation,” but resisted the notion of raising taxes or cutting spending to fill the gap. For the coming fiscal year, she believes the economy will need stimulus — not austerity.
“At this time, I don’t think it is a wise decision to try to backfill this catastrophic situation with raising taxes and shocking the economy even more,” said Harpauer.
“I’m very confident, within the next fiscal year, we wouldn’t be revisiting the tax for any increases.”
But Harpauer accepted that the economic fallout from COVID-19 will likely be “very long term.” She wouldn’t commit to holding off on tough measures over the next budget cycle if the crisis continues.
“I’m not going to go down that road,” she said.
The spending estimates for 2020-21 include a 3.8-per-cent boost to health spending, which will reach $5.77 billion, including a $3.74-billion grant to the Saskatchewan Health Authority.
It also includes $2.57 billion for the education system and $2.7 billion in capital spending for both ministries and Crown corporations.
Harpauer signalled that the government will “certainly” spend at least that much.
But NDP Leader Ryan Meili called for a plan that is proportionate to the gravity of the challenges facing the province. He accused the government of wasting everyone’s time with estimates that bear no semblance to what’s needed in the face of the pandemic.
“They’re on completely different planets,” said Meili. “They’re not related to one another. What’s going to be needed at this time is a major injection both into the health system and into the economy in general — into people’s pockets. None of that is in that document, which is not a surprise.”
The federal government did provide such an injection on Wednesday, unveiling $27 billion in direct support for Canadians and $55 billion in other measures to help prop up a flagging economy.
Meili demanded a plan about how much the provincial government will pay, and criticized Moe for providing nothing more than “blank cheque” for the health system.
“Give us a very clear description. How many dollars? How many doctors? How many nurses? How many beds? How many ventilators? How many swabs? Give us all of the information, based on what you know.
“Yes, we will give what it takes is so vague that it avoids any accountability and I think makes it much more difficult for them to actually deliver.”
Moe resisted any argument that his government has been too slow in preparing for the crisis he’s now facing.
“There’s criticisms that we maybe haven’t moved fast enough, maybe have moved too quickly in other cases. We’re just trying to make the very best decisions that we can to protect Saskatchewan families,” he said.
“With respect to the action that we’ve taken in this province, I think it’s been entirely timely. I think it’s been appropriate. If anything it’s been ahead, if you consider where we are on the curve.”
Asked how he’s coping with the pressure of fast-moving events, Moe said “this one’s an important one for our province, it most certainly is.”
On Wednesday alone, the Canadian benchmark for oil fell by about a quarter to bellow US$10. Each dollar it falls, averaged over a year, shaves $16 million off provincial revenue. Stock markets tumbled again.
Harpauer told reporters that the last weeks have been trying for her as she watched markets tumble and saw what was supposed to be a balanced budget slip away into oblivion.
She wouldn’t describe her precise reaction.
“I can’t use that language in this room,” she said.