REGINA: The Canadian Taxpayers Federation is calling for tax relief and spending reductions in light of a new report from the provincial auditor.

The report, entitled "Understanding the Finances of Government," shows the province recorded an $844 million surplus for the 2004-05 fiscal year - resulting in an $800 million decrease in provincial debt.

"This debt repayment is great news for taxpayers," said MacLean. "Government debt is little more than a tax increase for our children and grandchildren. The problem is the province is forecasting an increase in government debt this year and in the future. This is unacceptable given that revenues are extraordinarily high right now."

Surplus revenues only temporary
The report indicates that the majority of the surplus consisted of a one-time transfer from the federal government and increases in non-renewable resource revenues. Federal transfers were nearly $2 billion last year -- an increase of $700 million from the previous year. Non-renewable resource revenues increased by $333 million.

"If Saskatchewan had not received a one-time equalization payout and oil prices stayed the same year-over-year, the provincial auditor would be a reporting a $244 million deficit," added MacLean. "Despite this large surplus, our provincial finances are on very thin ice, and when the handouts from Ottawa dry up and oil prices return to normal, we could be piling up Devine-style deficits. The provincial budget is a house of cards."

Spending is sky-rocketing
The report reveals that since 2001 government spending has increased by 26 per cent while Saskatchewan's population has modestly declined.

"The reality is we need to control spending," said MacLean. "The auditor's report clearly shows that Saskatchewan is completely reliant on federal handouts and windfall oil revenues. If we are going to provide desperately-needed school and income tax relief, we are going to have to make better choices."