Mandryk: Budget shows Saskatchewan losing to Alberta

By Murray Mandryk

Saskatchewan’s most recent budget has quickly become a reminder of a long-standing, hard-to-accept reality for this province:

We are not as well off as Alberta.

This envy of our 1905 confederation twin has largely been dormant for the past decade and a half in which Saskatchewan was growing at a pace similar to what Alberta has always experienced for roughly the same reason: Oil and other natural resource wealth.

But after seeing Saskatchewan grow by more than 100,000 people in the early 2000s — a rate of growth unseen in this province in 90 years — Saskatchewan is suddenly falling into an all-too-familiar pattern.

Recent Statistics Canada numbers show Saskatchewan to be dead last in growth (Prince Edward Island is now attracting more people than this province) while Alberta continues to grow.

Worse, Saskatchewan is again losing people to Alberta (as it always seems to have done) when numbers suggest we should be doing okay.

After all, while Saskatchewan has taken a significant economic hit in the past couple of years of the pandemic, more-dependent-on-oil Alberta took an even bigger hit.

One might think the two provinces would be about the same position as we move back into a period of $100-plus-US per barrel oil … or that Saskatchewan should be in an even better position than Alberta.

We have a lot more farmland, and Farm Credit Canada is reporting a 7.4-per-cent increase in the value of Saskatchewan farmland in 2021 — more than even 5.4-per-cent increase in 2020 and the 6.2-per-cent increase in 2019.

With the war in Ukraine, the value of wheat production, oilseeds, and pulse crops are also likely to rise dramatically this year. And the spate of canola crushing plants and other agriculture-related projects will add to our economy.

This is great news for provincial budgets that have clearly floundered during the pandemic.

We can already expect a $500-million increase in non-renewable resource revenue to $2.9 billion in 2022-23 compared with what was forecasted for the fiscal year that just ended.

The most recent budget also shows that potash revenues alone —something that Alberta doesn’t have — will nearly quadruple to $1.5 billion in 2022-23 compared with $420 million in 2021-22.

Yet the big story emerging from the Saskatchewan budget seems to be tax increases — specifically, the Saskatchewan Party’s decision to apply this province’s six-per-cent provincial sales tax (a PST that Alberta still doesn’t have) to everything from concert and football and hockey game tickets to gym and fitness club membership fees.

In explaining her choices, Finance Minister Donna Harpauer said the Saskatchewan Party government considered using the list to which the federal goods and services tax GST) already applies “solely for simplicity instead of massive confusion.”

However, Saskatchewan’s Finance Minister emphasized that taxes on concerts, football games, gyms, and anything else would not be her first preference.

“I would love to remove the PST entirely and be Alberta, quite frankly,” Harpauer said. “Unfortunately, in Saskatchewan, one dollar a barrel of oil (increase) is $14 million (in budget revenue). In Alberta, one barrel of oil is $500 million.

“So we are more reliant on taxes than Alberta is.”

In a nutshell, Harpauer neatly summed up both Saskatchewan’s current budgeting problem … and its long-standing one in relation to losing people to Alberta.

“We have to stabilize our budget,” she said. “We’ve seen in the past when resource revenues plummet and you’ve become too reliant on those revenues, then you are looking at scrambling and (dipping into) savings or cuts which truly doesn’t serve us well.”

One can argue that poor spending choices are also a big part of the problem.

But the bottom line very much seems to be as it’s always been — we are not as fortunate as Alberta because of oil.

This is still the biggest difference between the two provinces.