If you’re confused by the Wall government’s debate with the provincial auditor about whether or not the budget is balanced, here is a plain English breakdown.

To simplify the situation imagine the provincial government as a department store and inside it is a small restaurant that the store owns. However, for accounting purposes the restaurant’s revenue and expenditures are counted separately from the store.

Think of the department store as being like all the provincial government’s departments (eg. environment, highways, etc.) and the restaurant like the provincial government’s arm’s length organizations (eg. school boards, health regions and crown corporations, etc.)

For years, both major political parties in Saskatchewan have focused on how well the department store is doing. In provincial budget-speak, they focus on what’s known as the “General Revenue Fund.”

When in power, both the NDP and Sask Party are guilty of taking profits from the restaurant and putting them into the department store to make the department store…err province’s finances, look better than they actually are.

It’s one of those things where politicians condemn the practice if they’re in opposition, but defend it if they’re in government. Thus, you can take the Saskatchewan’s NDP’s current indignation with a grain of salt. You could also assume if the Saskatchewan Party was in opposition right now, they would be scolding the NDP for doing the same thing.

While there has been a historical focus on the department store’s bottom line, (the General Revenue Fund), accounting rules have changed over the years and auditors have focused more and more on the big picture; they look at what’s happening when you include the department store and the restaurant. This outlook is called the “summary” budget. According to the auditor’s office, the government’s summary financial statements are “reliable” and they ran a small surplus in 2012-13.

As the government continues to publicly focus on the General Revenue Fund, the auditor has criticized them, rightly so, as the numbers don’t properly include a number of factors, such as ballooning pension costs.

However, even with a focus on the overall, summary budget, there is still the ability for the government’s books to look better than they actually are. To understand why, ask yourself if your SGI premiums should be used to pay for a teacher’s salary or buying a politician a new desk?

Most people would probably say “no.” SGI’s mandate, since it continues to have a monopoly (and that’s another debate), should be to offer auto insurance at the lowest price. While SGI should be allowed to accumulate a small reserve, if it does see large profits, those dollars should be returned to Saskatchewan motorists through lower insurance rates or a rebate cheque.

However, that’s not happening right now. SGI and other crowns regularly have their profits raided and they are used for covering other provincial government expenses; things like teachers’ salaries, new furniture for politicians and whatever else the government spends money on.

That’s why the Canadian Taxpayers Federation, a donation-based taxpayers watchdog organization, has advocated for the government to balance its General Revenue Fund and summary budget without taking money from crowns like SGI, Sasktel and SaskPower.

In the mean time, it’s clear, the government needs to change its focus, but the opposition’s howls should not be too loud. Their track record isn’t any better.

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