With all the focus on COVID-19 prevention, release of the Saskatchewan budget barely made a ripple in the sea of news coverage.
Voters and the media could be excused for that oversight. Our attention is on matters of more urgent concern.
Moreover, this wasn‘t really a budget. Budgets require two main parts, expenditures and revenues — how we are going to pay for things.
This one had no revenue section. For three weeks after oil prices collapsed the province refused to postpone the budget or redo revenues with a different oil price estimate.
Once thought to average $60 a barrel, oil prices have sunk to $22 with some heavy oil grades trading at $10.
No matter, the province proceeded with an expenditures-only document.
The expenditures Finance Minister Donna Harpauer tabled in no way reflect a pending election with goodies designed to lure votes. With some arguably unnecessary exceptions in increased spending, the budget was a more of the same document.
Some increase was offered where absolutely needed.
Expenditures increased 3.1 per cent to $14.15 billion. Last year oil and natural gas revenues were expected to rake in $1.8 billion, or about 12 per cent of income.
If current oil prices stay at these levels oil revenues will be a fraction of last year’s take.
Harpauer somehow found $1.3 billion in a cash stash to offset lower oil revenues.
Low oil prices combine with funds being used to offset income losses from self-quarantining measures could still create tsunami proportion deficit waves.
Some will argue the province’s continued spending on highways — upgrading more than 1,000 kilometres — and schools is unnecessary. That money could have been saved. Or less debt would be incurred.
True. But the savings come at the expense of jobs and the income/sales tax revenues associated with jobs.
The highways budget, construction of seven schools, a long term care facility and $22 million dam and waterway works by the Moose Jaw based Water Security Agency could have been postponed.
Spending by the Saskatchewan Government amounts to about 17 per cent of the province’s output, better known as gross domestic product. The provincial government spends one in every $6 spent.
The government chose to continue spending on major projects and maintain employment. After all, Saskatchewan has lost 13,000 construction jobs in five years.
Moose Jaw may be disappointed at exclusion from the new school projects.
Capital spending will increase $93 million over last year with $28 million extra for schools and $83 million more for highways infrastructure.
Interest on the debt of $513 million increases by $23 million and stands at 3.5 per cent of expenditures – a reasonable proportion.
For some observers, attentive to the never experienced COVID-19 circumstances, this accounting of expenditures has no meaning. They reason no one knows what the public cost of combatting this disease will be.
Nor do we know how much expenditures will be reduced by quarantine practices. Or how we pay for it.
Ron Walter can be reached at ronjoy@sasktel.net
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
