In March, when the spring budget came out, the province said the shortfall would be about $463 million. However, in a first-quarter financial update on Tuesday morning, the government said there was a significant turnaround due to higher revenue from resources. This reflects higher commodity prices for things like potash and oil. Finance Minister Donna Harpower said the improvement means the province can balance the budget, pay down debt and develop an “affordability” plan. As part of this plan, all Saskatchewan residents who are 18 years of age or older and have filed a tax return will receive a $500 check in the fall. Speaking to reporters Tuesday, Harpower said no one on income assistance would be adversely affected by receiving a check, and the federal government would not tax the $500. The provincial government said the plan — designed to help people with rising costs due to inflation — would also exclude gym and fitness memberships and some other recreational activities from the PST extension scheduled for Oct. 1 and would continue the temporary small business tax cut to zero percent.
Controls to cover most of the projected increase in expenditure
The province said the affordability plan has been fully incorporated into the first-quarter forecast, adding that $500 checks to residents will account for $450 million of the projected $508.2 million (2.9 per cent) increase in total costs of the government since issuing the budget. Total spending is now projected at $18.13 billion, he said, while revenue is projected at $19.17 billion — $2.02 billion (11.7 percent) up from the budget. The government said the increase was largely due to a $1.86 billion increase in non-renewable revenue. Tax revenue is projected to increase by $536.5 million from the budget, with higher sales tax revenue reflecting a stronger-than-expected economic recovery, the government said. It also said public debt is projected to be $1.72 billion lower than budgeted. It said the return to a surplus has eliminated the need for operational borrowing and provides an opportunity to retire up to $1 billion in existing debt. “Debt retirement and lower borrowing will save almost $50 million a year in interest charges – savings that will stay in Saskatchewan and be reinvested in Saskatchewan,” Harpower said. Harpower said the province’s economy is strong and growing, adding that private sector forecasts predict Saskatchewan will lead the provinces in economic growth in 2022. He said Saskatchewan’s unemployment rate fell from an average of 7.3 per cent in the first seven months of last year to 5.0 per cent in the first seven months of this year, third lowest among the provinces, adding that nearly 24,000 jobs have been created new jobs in the province during the first seven months of 2022. So far in 2022, Saskatchewan is seeing growth in wholesale trade, international goods exports, manufacturing sales and non-residential construction investment that are among the highest of any province, he said. “Saskatchewan’s economy is now firing on all cylinders,” Harpower said. The government said Saskatchewan will continue to have one of the lowest net debt-to-GDP ratios among the provinces. In the first quarter, net debt as a percentage of GDP is projected to be 15.6 percent, compared with 18.8 percent in the budget, it said. Citing private sector forecasters, the government said Saskatchewan’s real GDP is now expected to grow by 4.7 per cent in 2022, the highest among provinces, and by 2.5 per cent in 2023, the second highest among provinces.
Wide opposition, relief schedule
Opposition NDP finance critic Trent Wotherspoon told reporters there should have been substantial cost-of-living relief for Saskatchewan people in the long run. “There needed to be an investment that met the health care challenge of surgeries and ERs that are too often being closed and … bypassed by this government,” he said. “And for the kids coming back into the classrooms that have been cut and affected in such a dramatic way.” Wotherspoon was also critical of how the $500 payments will be made to Saskatchewan residents. “A single parent with three children will get less than a couple without children,” he said. “The cost of raising children is high in Saskatchewan right now, so it’s definitely not fair on that front.” Wotherspoon said the government should have offered this relief months ago when the Opposition was calling for it. Instead, he said, the government sat with a billion-dollar revenue windfall and waited until just before the Saskatoon-Meewasin by-election. “We didn’t force the runoff,” Harpower told reporters. “The NDP did. And their timing was their choice.” Harpower was also asked why the relief wasn’t announced sooner. “I just didn’t feel comfortable making a relatively large financial commitment with very little data to back it up,” he said. Harpower was also asked why the $450 million earmarked for the checks could not be invested in health care. “In every budget, we have increased spending on health care,” he said. “But if we use $450 million, say, just in the price of oil, and then the price of oil goes down, where are we going to find that $450 million next year?” Harpower said the government cannot buy into the volatility of resource revenues and assume commodity prices will remain so high. “So we’re still going to have to be very, very, very careful about our spending going forward,” he said.
