The Saskatchewan government is cutting spending and has implemented a hiring freeze as it tries to bring down a ballooning deficit of about $1 billion.
Finance Minister Kevin Doherty has released a mid-year budget update that shows a $400-million drop in revenue from the June budget.
Doherty says low oil and potash prices are having a greater impact on revenue than expected, but corporate income tax, personal income tax, provincial sales tax and fuel tax are also down.
In an effort to get back to balance, Doherty said that Saskatchewan will be looking to what other provinces are doing in a way to boost in this revenue.
“Whether that’s tax exemptions, whether that’s taxes they’ve implemented in other provinces that perhaps we don’t, whether that’s increasing existing taxes, all of those things are on the table,” Doherty said.
READ MORE: Revenue drop means Saskatchewan deficit creeps closer to $1B: finance minister
In an effort to get the province back to balance, the province will be implementing $217 million of in-year restraint measures across all branches.
“The fact of the matter is if you’re going to reduce spending in the province people are going to be affected,” Doherty said.
This includes $63.9 million in health. Workforce management measures will focus on limiting overtime, re-shifting positions, and may include layoffs. This move is expected to make up $22.2 million in saving.
A further $22.3 million in reductions to various grants and programs will also take place. This includes a $500,000 cut to provincial funding for STARS Air Ambulance.
Other restraints include $9.2 million in social services, $8.7 million for education, and $11.7 million in advanced education.
Doherty said those measures will be brought in now and more will follow in next year’s budget.
Additionally, Doherty announced the province will have to borrow an additional $500 million to cover operating costs, driving the provincial operating debt to $4.6 billion.
This is on top of $300 million in borrowing that was previously announced in order to run the government.
Doherty said this borrowing is necessary, and they have a plan to pay the money back.
“You don’t want to shock your economy by laying off literally hundreds of teachers, or hundreds of nurses, or hundreds of social workers, or hundreds of government workers to get you back to that period of time where you’re back in balance,” he said.
Todd MacKay with the Canadian Taxpayers Federation argued that the government should have been taking action to address our current financial situation a year ago.
“We are where we are. They’ve gotta work hard, and they’ve gotta make progress, and they’ve got to get back to balance, because at the end of the day we have to pay this money back with interest,” MacKay said.
Across the aisle, Finance Critic Cathy Sproule said this reinforced the NDPs argument over the Saskatchewan Party’s mismanagement of the government.
“We didn’t get a budget before the election, when it came out in June they were $434 million projecting in deficit, now it’s over a billion dollars,” Sproule said.
“That’s more than double what they projected so something’s wrong.”
The government had projected a deficit of $434 million when it introduced the budget back in June.
With files from the Canadian Press
Comments