A budget built on some risky assumptions

It's a fair question to ask, whether or not the Saskatchewan Party government is capable of balancing the books anymore.

Since 2015, Saskatchewan's budget has only been in balance once, when revenues unexpectedly improved to the tune of $2 billion, the result of higher commodity prices from Russia's invasion of Ukraine.

But the surplus of 2022 is long gone, with provincial finances deteriorating by

$1.5 billion from budget in 2023, propped up ironically by provincial carbon pricing revenues from Output Based Performance Standards on electricity.

This year will see a deficit of $273 million, but this is based on the budget's assumptions that an aging demographic will not increase labour shortages, that no major global economies will enter into recessions, and, most importantly, that Saskatchewan will not have a drought.

All of these assumptions are unlikely to pan out.

The Saskatchewan Water Security Agency released a report last month suggesting that “without above-normal run-off, drought conditions are expected to persist or even worsen this spring across most of the province.”

In 2023, Saskatchewan's budget saw a $1.1-billion increase in agriculture expenses due to drought. That already makes the deficit in 2024 a $1.3-billion disaster-in-waiting.

To make matters worse, PST revenues are projected to increase by a whopping 10.4 per cent, which is unlikely to come true unless the government's risky assumptions pull off a miracle.

The budget does include much-needed funding for health care and education, but given the track record of the Saskatchewan Party in election years, one must question whether this funding is here to stay, and the Saskatchewan Teachers' Federation has already suggested that this budget will see per-student funding in Saskatchewan plummet to dead last in the country.

Total provincial debt has tripled since 2015, and nearly doubled under the tenure of Premier Scott Moe. This, despite a health-care system in shambles, education continuously underfunded and taxes hiked and expanded.

It seems there isn't much the government can get right, and the people of Saskatchewan have to be asking where the money has gone.

In 2016, the Saskatchewan Party repealed its balanced budget law, the Growth and Financial Security Act. The act, perhaps most importantly, included a requirement for the Treasury Board to conduct an annual review of expenditures as to economy, efficiency and effectiveness.

Ministries may still review expenditures today, but it is clear, given just how much Saskatchewan spends on subsidies and incentives without much to show for it in the way of growth, that these reviews have been unable to assess the economic return on spent dollars.

By no means was Saskatchewan's balanced budget law perfect, but for years it encouraged a more responsible approach to finances in the province.

If a similar version were introduced today that accommodated the business cycle, that specifically mandated an assessment on the economic returns of public dollars, and that required the public release of the findings of these reviews, Saskatchewan would be able to see significant savings, spur economic growth and balance the books sustainably.

If surpluses were deposited in the act's fiscal sustainability fund instead of in the general revenue fund, the province could further reduce net debt and provide a stable source of wealth to draw upon.

It's time Saskatchewan had a government that was serious about fixing public finances, because on all fronts, from taxes to spending to debt, this government gets a failing grade.