Sask. needs faster action on deficit reduction

Other provinces have figured it out,

Smaller deficits tomorrow.

That's the promise of the Saskatchewan government to taxpayers. Instead of taking action to reduce its deficit spending now, politicians are promising to do it eventually. The last time we heard this promise, it plunged the federal government further into debt. And that ultimately left Canada unprepared for the current pandemic crisis.

Finance Minister Donna Harpauer blames the pandemic crisis for her decision to delay. Surely other provinces have also had to increase their deficit spending, right?

Not quite.

Across Canada, most provinces are taking action to shrink their deficits and provide a path to balance. Even with increased spending in education and health care, most governments took action to lower their deficits this year.

In Alberta, the deficit is down by $2 billion. Manitoba's decision to freeze spending on certain sectors resulted in a smaller deficit this year at $1.59 billion. Nova Scotia's government reduced its deficit by 21 per cent and it plans to deliver a balanced budget two years before Saskatchewan.

Even the country's hardest-hit provinces have managed to reduce its deficit. Quebec has the highest cases of COVID-19 per capita in the country at 3,877 cases for every 100,000 people, but it reduced last year's deficit of $15 billion to $12.3 billion for 2021-22. Ontario with the highest total number of COVID -19 cases and hospitalizations, also reduced its deficit for 2021-22 by $5 billion from last year.

Unfortunately for taxpayers, Saskatchewan's latest budget is out of step with most provinces. That spending is up in education and health care should surprise no one. Unexpected expenses, like the additional $433 million in pension adjustments as well as unpredictable crop insurance costs, are part of the story. But the government's decision to raise spending in 10 out of 11 sectors has left taxpayers scratching their heads. This decision to spend without freezing or cutting spending in other sectors has resulted in a whopping $2.6-billion deficit for 2021-22.

Other provinces have illustrated that they can reduce deficits by prioritizing resources into a few key sectors. It is possible to tackle the pandemic and reduce the deficit.

Instead of doing that, Saskatchewan is punting deficit reduction for another day.

Starting the road to balance now prepares Saskatchewan for any unexpected crises. If there's anything that the pandemic has taught us, it's that we have to prepare for bumps in the road ahead.

Saskatchewan's higher deficit spending will plunge the province deeper in the red. By the end of 2022, the taxpayer-supported debt will reach $17.9 billion. Taxpayers will be on the hook for

$25 billion by 2025, leaving Saskatchewan with less room should another crisis hit.

But Harpauer assured taxpayers that the Saskatchewan government “continues to manage its debt responsibly and its net-debt-to-gdp ratio is among the lowest in the country.”

Five years ago, federal politicians tried to assure Canadians with the same sentiment. The federal Liberals would also claim that they could manage debt as long as interest rates and debt-togdp ratios were low.

Today, Canada's trillion-dollar federal debt accounts for over 49 per cent of our entire economy. Five years' worth of promising smaller deficits and a pandemic later, we now know that was the wrong approach.

Procrastinating on reducing the deficits has already cost taxpayers $755 million on interest payments. And what if interest rates go up?

Saskatchewan's taxpayers can't bet the family farm on a promise.

Politicians who insist on delaying tough decisions until tomorrow instead of taking immediate action will inevitably find themselves unprepared for the next crisis.

Unfortunately for taxpayers, it is a costly mistake that governments keep making.