The provincial budget recently tabled by the Wall Government is one of the best in Canada. Despite Saskatchewan's edge over most other provincial budgets, there still is plenty of room for improvement.

Consider that despite running massive deficits this year, British Columbia, Alberta, Manitoba and Ontario will continue on spending away as if they had money printing machines at their disposal. The four provinces will increase spending by 2.3 per cent, 6.4 per cent, 5.3 per cent and 7 per cent respectively this year. At the federal level, spending is up 4.7 per cent over last year’s level.

Clearly, it’s difficult for governments to control spending when times are tough.

When one compares the Wall government’s 0.001 per cent spending increase to its peers, it’s an incredible feat; one that will certainly upset cap-in-hand special interest groups.

Speaking of which, one of the government’s bolder budget measures is a plan to lay off 1,800 employees over the next four years. This has led union leaders to fear monger over cuts to services. Yet, that completely ignores the fact that a reduction in staff does not necessarily mean reduced services. Introducing new technology and changing the incentive structure behind a particular service are just a couple ways customer service levels for citizens can remain unchanged or actually improve despite reducing costs.

Along with spending reductions to many departments, the government is also bringing down the axe on its TV station, SCN. This will save over $5 million per year. The decision is long overdue considering vast improvements to satellite and cable technology over the past couple decades. Further, the emergence of the internet and its ability to spread educational and government information will ensure loyal viewers can still learn about government activities.

The budget wasn’t completely full of cuts, the department of health and post secondary institutions will see increases this year. Considering those are services which Saskatchewanians regularly indicate as priorities, few would criticize that decision. However, we’ll have to wait and see how well the increases in funding are utilized.

In terms of the budget’s downside, critics have rightly pointed out the budget is not balanced. Yes, despite what the government has been using our tax dollars to communicate to us, the budget is in fact a deficit, no matter how you cut it. On a “core” basis, which does not include crown corporations and other arms length divisions, the budget has a $174 million hole. That hole will be plugged by pulling massive ‘dividends’ out of the province’s crowns and by using a $194 million withdrawal from the province’s rainy day fund. However, if you include all those arms length divisions and crown corporations, we’re looking at a $622 million deficit.

Considering expenditures are $10.1 billion, up from “only” $8.6 billion in 2007-08, there’s plenty of room to cut back and get the deficit under control. It will probably require more tough decisions, but keeping the debt under control will pay off in the long run.

Mr. Wall has certainly taken a good first step, but there’s more work to do.

By: Colin Craig
Posted: March 30, 2010
Topic: Saskatchewan

Contact the regional director Colin Craig for further information.

Type: Commentary

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