Mandryk: A tough budget made easier to take

By Murray Mandryk

Getting the provincial budget right is no easy task in the best of years.

Suffice to say, the past two years of an economic downturn driven by the pandemic and accompanied by last year’s drought that saw a 47-per-cent drop in crop production last year have not been the best of years.

It’s been really hard for the Saskatchewan Party government to get the past couple of budgets completely right.

The massive $2.2-billion monster deficit in 2021-22 likely tells you all you really need to know about how badly this budget has gone off the rails — something the government seemingly acknowledged in its 2022-23 budget that is themed back-on-track.

Unlike what’s been happening on the CP Rail lines, let’s hope this train keeps running.

Perhaps the best news in the budget is the concerted effort to put the brakes on the runaway public debt.

Finance Minister Donna Harpauer’s plan calls for a $463-million deficit in 2022-23 — one-fifth the 2021-22.

However, it won’t be enough to prevent public debt from soaring past $30 billion this year. Moreover, this year’s deficit will be followed by a $384-million deficit in 2023-24, a $321-million deficit in 2024-25 and a $165-million deficit in 2025-26, further hiking public debt past past $35 million by 2027.

Worse, we will be paying $622 million on the $9-billion operational debt — the interest we are paying the cumulative costs of past deficits, and other borrowing that we have to shell out before any of the bills are paid.

But unlike 2017, when the Sask. Party government slashed programs like the Saskatchewan Transportation Company bus service and implemented major tax hikes like a one-percentage point provincial sales tax increase; Harpauer opted for a gentler approach after two tough years for all of us.

Rather than a general PST increase, the Harpauer expanded the PST to previously exempt items in which we are now paying the federal goods and services tax like “sporting events, concerts, museums, fairs, gym memberships and golf green fees.” However, such changes won’t come into Oct. 1 — after golf season and before the Grey Cup — to allow various organizations to have time to make adjustments.

The government also hiked sin taxes — two cents a cigarette for that have 29 cents provincial taxes.

However, what’s really driving the increase in 2022-23 government revenue —$17.2 billion this fiscal year is our good old natural resources that have been the staple of the Saskatchewan economy for years.

A boycott of Russia and Belarus potash resulting from the invasion of Ukraine will result in $420-million more in potash royalties this year. Oil now trading at $115 US a barrel will result in $77-million more in resource surcharge that might even go higher, given that the government is only counting oil to average $75.75 US a barrel in the coming year.

The upside of the commodity windfall is that it helps get us out of a worse budget deficit. The downside is that this budget makes us further depend on such natural resources that only accounted for about eight per cent of total government revenue last year. This year, resource revenues will account for about 16 per cent of revenues.

Better news is a recovering economy means an added $104-million more in PST revenue.

This likely afforded Harpauer the option of spending more —

$17.6 billion in total in 2022-23 - $3.2-billion of which is capital project spending.

However, the government is largely counting on $13.6 billion in private sector investment to drive the economy.

That is allowing the government to focus on program funding to reduce surgical wait times and to recruit nurses.

Many won’t see it as doing enough.

But coming out of two tough years, the budget is doing a surprising amount.