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Budget mess may take some time to fix

Posted on February 14, 2017 by Maple Creek

By Murray Mandryk

What seems clear is that none of us will escape the wrath of the 2017-18 budget.

But based on the noises Premier Brad Wall is now making, some of us will be hit harder than    others.

Is this fair? Maybe Wall would be well advised to take things a bit slower.

Speaking to the Saskatchewan Urban Municipalities Association (SUMA) meeting last week, Wall informed mayors and councillors that he had the “unhappy duty” of announcing a $1.2-billion deficit for the current budget.

“[A] non-essential hiring freeze has been in place now in government for some time and we’ve made some progress, but we’re not anywhere near close to having dealt with this gap,”  Wall said.

That gap in the form of a growing 2016-17 deficit, it started out as $434-million deficit when the budget was introduced in June and grew to $1.04 billion by the mid-year update in November. Now, it’s $1.2 billion, triple what was initially predicted.

Wall told SUMA delegates his Saskatchewan Party government “will have no success in bringing order to our finances if we cannot contain our payroll costs.”

“Our very base case, our minimum expectation, is that we will freeze the total (human resources) cost of government for this year and potentially for a few years down the road,” Wall said.

The Premier added one middle-of-road scenario presented by his budget planners to achieve balance in the 2017-18 fiscal year would see the elimination of 4,900 health care jobs, layoffs in education, reduced support for vulnerable people and some form of tax increases.

If that’s a middle of the road scenario, one would hate to see the worst case.

But more to the point, one has to question whether it’s all that wise for Wall to attempt to re-balance the budget in just one year if it means firing one in 10 health care providers across the province.

For starters, the problem the past couple years hasn’t been runaway public sector salaries, as Wall seems to be suggesting.

While a couple contract settlements in the early years of the Wall government were extraordinary, a 36-plus-per-cent increase for registered nurses over four years comes to mind, credit should go to the Sask. Party for actually keeping public sector wages in line.

In fact, the wage settlements Wall is asking employees to forego, the Canadian Office and Professional Employees (COPE) union representing SGI employees say the government has suggested they roll back their already negotiated two per cent 2017 increase, are less than the annual increases MLAs have been receiving.

The truth be told, the problem for the Wall government the past two years is less about wage increases and more about the $1.7 billion government has borrowed from the open market to keep up with its aggressive building agenda.

Surely then, public capital spending is where we should start.

Admittedly, Wall is right that resource revenues, his government’s good fortune for its first seven years in office, has also been the recent problem.
“For three years, we’ve been battered and bruised and buffeted by a stubbornly long down cycle in commodity prices,” Wall said. “It’s been a perfect storm for Saskatchewan.

“And that storm is still blowing a little bit. We’re not out of it yet by any means.”

But if it took the Saskatchewan government a few years to get into its current mess, is it wise to try and dig the province out overnight?

Taking out Wall’s problems, now our problems, on public sector employees isn’t the best way.

A one-year solution may be quicker, but it wouldn’t be the fairest solution nor perhaps the smartest one in the long run.

Now may be time for Wall to think in the longer term.

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