Making a budget doesn’t mean anything if you don’t stick to it.
The Saskatchewan government told taxpayers that the government would run a $273 million deficit this year, in its March budget.
The deficit is now projected to rise by more than $470 million, according to the mid-year report. The new deficit will be about $744 million.
Finance Minister Jim Reiter is placing the blame of this increased deficit on higher-than-expected crop insurance claims.
It’s Saskatchewan, we aren’t strangers to droughts or crazy weather, and the government needs to be prepared for it. And it should have been extra prepared, because this is the exact same situation the government was in last year.
In 2023, the government’s mid-year report saw the budget go from an expected surplus to a $255-million deficit. And what did the government blame that on
You guessed it, crop insurance.
Budgets are not supposed to be some best-case aspirational document, its supposed to be a realistic prediction of what the government is going to spend during the year. In Saskatchewan, that should include droughts.
And if that means a larger deficit, the government should be up front about it so taxpayers can rightly criticize it at budget time, not eight months and an election later.
If you need to pay to fix a leaky roof, you need to find savings somewhere else. But the government didn’t try to find savings in the rest of the budget to keep it on track either.
Of the 11 main program areas the government spends money on, it’s already overbudget in six areas. In total, the government is spending $746 million more than what the budget documents claim. After taking out the increased crop insurance claims, the government is still overbudget by $361 million.
If the government held the line on all spending except crop insurance the deficit would be $382 million instead. That’s only about a $109-million increase compared to the budget.
The government is also expecting to take in $275 million more revenue than it projected at budget time. If there was no new spending at all, the government would be projecting a small surplus.
The Saskatchewan party’s election platform from only a few months ago promised taxpayers a $367-million deficit this year. This report blows a $400-million hole in that plan.
Based on that platform, the government promised a balanced budget in 2028. The new numbers that mean without the government taking action to control spending, four years from now there will still be a deficit. A deficit means more debt and debt interest payments that taxpayers are forced to pick up the bill for.
This year, the government is wasting about $728 million on debt interest payments. If it existed, the ministry of debt interest would be the fifth largest by spending in the government. The Saskatchewan government spends more money paying for its bad financial decisions than it does on economic development, the environment or transportation.
And then there is the debt. By the end of this year, the debt will be more than $21 billion. That’s a 227 per cent increase compared to a decade ago. Over that same time, the government only balanced two out of its last 10 budgets. That needs to change so the government can start to pay down the debt and stop wasting so much money on debt interest.
The mid-year report shows that the government needs to get the budget back to balance, or at the very least, not make things worse than they already are.
Budgets are supposed to be a plan to keep. The Saskatchewan government needs to stop blowing the budget halfway through the year and come up with a real plan to tackle the deficit and stop saddling taxpayers with more debt and interest payments.