Ex-finance minister questions need to balance budget this year

Former Saskatchewan finance minister Rod Gantefoer says the province should not be looking to balance the budget this year.

Facing a budget deficit of $1.2 billion at last update, Saskatchewan will know the fiscal plan for 2017-18 in just over one month’s time.

Premier Brad Wall and Finance Minister Kevin Doherty have said their aim is to balance the budget.

Gantefoer, who served as Wall’s finance minister from 2007 to 2010, says doing so will be a challenge.

“My gut tells me that it’s not going to be possible in one year, that it might take one or two years to get to balance or a small surplus,” he said.

He’s confident Saskatchewan’s economy, plagued by low resource prices and high spending on infrastructure, will turn around.

Trying to balance the budget in short order, says Gantefoer, is worrisome. “If you’re faster than that, I worry about the medicine killing the patient and it’s going to be too hard for the people to bear, and that is not necessary if you take a long vision for the province,” he says.

Many of the ideas being floated by the province to combat the deficit are aimed at the public sector. Wage freezes, salary roll backs, layoffs and forced unpaid days off are, as Wall and Doherty put it, “on the table.”

Charles Smith, associate professor of political science at University of Saskatchewan’s St. Thomas More College, says there are different things the province could consider to limit the pain of an austerity budget. He suggests the province avoid cutting $1.2 billion in one go.

Jason Childs, an economist at the University of Regina, says the province based its budget on price forecasts that were wrong, because natural resources didn’t recover as expected.

“Realistically, there is going to have to be some pain somewhere. Cuts are going to have to be part of the solution,” he says, adding that tax increases should also be considered to bring in more revenue.