Minister says new budget will stay the course
The Saskatchewan government is not expected to roll back any more changes to the provincial sales tax, which increased revenues by around $800 million last fiscal year, when it tables its next budget.
“This budget, we’re going to be walking a very tight line to bring the budget back to balance,” Finance Minister Donna Harpauer, who will table the budget on March 20, told reporters Wednesday.
During his speech Monday, Premier Scott Moe suggested that municipalities, which are set to receive a $10-million bump in revenue sharing next year, would be among the only groups getting raises next year.
Harpauer said the three-year plan to eliminate a $1.2-billion deficit by introducing more consumption taxes is important to “maintain and sustain” funding for education, social services and health care.
Two years ago, the province increased the PST to six per cent from five per cent and eliminated a host of exemptions on items such as construction contracts, a move that has proved controversial.
Those changes are expected to net the province around $2.2 billion for the current fiscal year, up from $2 billion in 2017-18.
Saskatchewan has shed more than 2,000 construction jobs over the last 24 months, according to Statistics Canada.
Saskatchewan NDP Leader Ryan Meili said that is a direct result of the PST changes.
“It increases the cost of the project,” Harpauer admitted, noting that her information suggests the average cost of a construction project has gone up 2.9 per cent since the changes came into force.
“There’s no doubt that it makes a difference.
“However, there has been a slowdown in construction projects so that brings down the tendering as well … So there are advantages and disadvantages to having a very hot market.”
The government will also “hopefully” be able to balance the budget without adding to operating debt, Harpauer said, referring to what she has said was among the hardest choices made in the last budget cycle.
Saskatchewan public debt is forecast to hit $19.7 billion this year, about $6.1 billion of which is operating debt and $4.1 billion is capital project debt. Another $9 billion is owed by Crown corporations.
“We view borrowing for capital and infrastructure as good debt, if there’s such a thing as good debt, but my caution is we want to get away from borrowing for operation,” Harpauer said.
While the province has never owed more money, the finance minister noted that it has one of the best ratios of debt to gross domestic product in the country, suggesting it is “a very good position.”
Harpauer spoke to reporters following the “bear pit” at the Saskatchewan Urban Municipalities Association annual convention, during which the premier and cabinet field questions for more than an hour.
The convention has long been regarded as an opportunity for the province to make preliminary announcements, such as municipal revenue sharing formula changes, and float trial balloons ahead of the budget.
While details about what the document will contain are scarce — Harpauer wouldn’t say if any major infrastructure projects are on the horizon — highway intersection reviews are expected to be a priority.
The province committed $700,000 to review hundreds of intersections this year, a response to the Humboldt Broncos bus crash. The new money is part of what Highways Minister Lori Carr said is a five-year project.
“We’re not going to be putting overpasses all across the province, but we have a lot of intersections we can make improvements to — turning lanes, whatever that might be,” Carr told reporters.
Meili said he would like to see a “smart budget” that “looks at investing in the right places.” Consumption taxes and cuts to education, health care and social services have and will continue to hurt people, he said.
During the bear pit session, cabinet ministers answered questions on a wide range of topics, including highway intersections, rail crossings, transportation, expanded roles for nurses, carbon capture and nuclear power. The 75-minute discussion was moderated by Moose Jaw Mayor Fraser Tolmie, who got the biggest laugh of the morning when he cracked a joke about “Moe money” in response to a suggestion the province handle carbon tax rebates.
The session also featured a large stuffed moose head, which was provided for the occasion by Saskatoon Mayor Charlie Clark. Moose Jaw is embroiled in a bitter competition with a Norwegian town over which municipality has the larger moose statue