Harpauer feels better as budget day approaches

Finance minister hopes economic turn around will increase revenue

Saskatchewan’s finance minister is in a better mood these days, after three months of fiscal turmoil she spent grieving her buried balanced budget.

On Monday, Donna Harpauer will present a budget for 2020-21, finally pinning down how deeply Saskatchewan’s government anticipates sliding into the red.

It seemed in denial as recently as March 10, when Premier Scott Moe was still talking about a balanced budget.

The next week brought acceptance, as Harpauer acknowledged a deficit was inevitable and presented $14.15 billion in spending plans on March 18 without any sense of how to pay for them.

“You almost go through mourning,” she said in an interview Friday.

Harpauer remained in a grave mood through April, when she gave the first sense of the scale of the damage.

The COVID-19 pandemic and rock-bottom oil prices might shave $1.3 billion off government revenue. Or maybe $2.2 billion. The nightmare projection was a staggering $3.3 billion in revenue sucked out of government coffers.

Harpauer didn’t know. The wounds were too fresh, the markets too volatile. But she knows now, more or less.

“We did land on one of those three scenarios, with some confidence, keeping in mind the uncertainty is still really extreme,” she said, noting that oil prices remain “very volatile.”

Harpauer won’t say which scenario her ministry has chosen until a Monday morning briefing followed by a public announcement that afternoon. The closest she would come on Friday was to admit that she’s feeling “better” than she was in mid-april.

But Harpauer is still opting for caution, and plans to chart a steady course without any major “eye catchers” in the last budget before an expected fall election. Monday’s budget will look much like the March spending plans, she assured the Leader-post.

“We are still committed to the expenditures and the increases that we have in what we attempted to table,” she said.

Those estimates devoted $3.74 billion to the Saskatchewan Health Authority and $1.94 billion for school divisions, while setting out $2.7 billion in capital investments.

“I still feel that our structure that we have is solid,” Harpauer added. “What we’re going to need to diligently work on is minor spending.”

That means a few adjustments to account for pandemic response measures. Since the legislature adjourned in March, the government has unveiled a $56-million wage subsidy plan, a $50-million small business emergency support program and a self-isolation support program initially pegged at $10 million but now expected to come in well under budget

Roughly $2 billion in added infrastructure spending will be spread out over two years.

NDP Leader Ryan Meili already dismissed Monday’s budget before it was tabled. He argued that it’s a pre-election subterfuge to hide austerity to come.

“The budget of 2021 is the one that people need to be thinking about and worried about. They’ll try to do a good-news budget as best they can this time,” Meili said.

“The pain will begin if they get another chance.”

Harpauer insisted that she doesn’t believe “slashing and cutting services and programs” is the way to resuscitate an economy. But she has refused to commit to anything beyond the current fiscal year.

She’s hoping to balance the budget by boosting revenue through growth, not by cutting expenditures.

“I feel very confident that this is going to be an economic recovery,” she said. If that occurs, it will spare the government from any “dramatic decisions.”

But Meili has argued that bold decisions are needed to spur growth, including through early investments in home care, classrooms and renewable energy to support families and create jobs.

Harpauer countered that her March estimates already contained record investments in mental health and a “significant increase” for K-12 education. Now is no time to shake that up, she believes.

“We need to work very hard and diligently in minding our spending and being careful, finding efficiencies where we can,” she said. “But nonetheless, we need to build our province and build our economy.

“When those revenues return they will surpass our expenditures.”

She said the period after the next budget will give her a better idea of whether a plan to return to balance will take place over three or four years.

“It will take years. It’s not going to happen in the next budget.”