Finance Ministers Rod Gantefoer and Jim Flaherty should recall the catch phrase "Just say no." It was taken to heart in the early 90’s when many governments said no to never-ending deficits. Saskatchewan’s NDP took dramatic measures to get the province back in the black, including hospital closures. In 1998, Paul Martin delivered Ottawa’s first balanced budget in 28 years, largely by curtailing spending. Since then, deficit budgets have been taboo.

Yet as times change, so does policy. Current financial turbulence has brought the "D" word back into vogue. Some claim that current conditions call for high government spending and "temporary" deficit budgets. Saskatchewan taxpayers should have none of it.

For one, we’re in better shape than most. In early October, Canada ’s banking system was ranked number one in a survey conducted by the World Economic Forum. And the industrialization of China and India should mean steady demand for the resources Saskatchewan has to offer.

Because the rise and fall of the dollar usually follows the price of oil, Saskatchewan is alright either way. For every $1 drop in the price of a barrel of oil, the province loses $18.4 million. However, every cent the Canadian dollar loses against the U.S. means $30 million more for the province. "Trouble is only temporary, please do not adjust your set."

Second, the unprecedented worldwide expenditure of tax dollars (with much more borrowed) is failing. Have bad loans disappeared? In fact the opposite has happened.

Markets do not respond well to governments unpredictably lurching from one taxpayer-funded “solution” to the next. The only certainty stemming from government “stimulus packages” in the U.S. and elsewhere is a devalued currency, higher taxes and more debt handed to future generations.

Third, balanced budgets were achieved in the 90s and can be achieved today. There may not have been a sub-prime mortgage fiasco at that time, but there was a burden of debt more staggering than today’s.

In fiscal 1990, federal debt was two-thirds the size of the economy, as defined by gross domestic product. All though the early 90s, one-third of Ottawa’s budgets went to debt service charges, and 18.7 percent of Saskatchewan’s budget went to debt interest in 1993.

Debt servicing still takes roughly 30 percent of federal budgets and six percent of provincial ones. Canada ’s federal debt sits at $457 billion despite last year’s $33 billion in interest payments and $10.2 billion spent on the principal.

Although the province’s debt will drop to $4.2 billion by spring 2009, another $9 billion debt remains in Crown corporations and unfunded public pension liabilities.

Given this, can debt repayment be abandoned for any amount of time? Ten billion per year off the federal debt still means 46 years of payments, and staggering interest charges.

A balanced budget is the very least that should be done.

The public wants spending restraint, not extravagance. An Ipsos-Reid poll released October 28 showed that 82 percent of Canadians favoured federal spending cuts over deficits (43 per cent) or tax hikes (17 per cent).

Taxpayers can forgive the federal Conservatives if they don’t follow through with their ridiculous June to September $19-billion vote-buying spree.

Saskatchewan’s mid-year financial report revealed the province will spend $507 million more this year than was budgeted in the spring. Having considered this, and the wider economic climate, Gantefoer reached a conclusion: “I have to get a lot better at saying no.”

Let’s hope Gantefoer follows through and Flaherty does the same.

Lee Harding,
Sask. Director