Pros and Cons: Examining the case to potentially sell SaskTel
Should we sell SaskTel? That’s the million-dollar question for the potentially billion-dollar transaction following the appointment of Dustin Duncan as the Minister Responsible for SaskTel on Tuesday.
Premier Brad Wall said because the Saskatchewan Party did not campaign on selling SaskTel in the recent provincial election, they can’t make the decision to sell without consulting the public.
However, if the right offer came along, a referendum could be held on the decision.
“We would have in this case, Dustin Duncan, if it’s the right deal, he would be advocating for it I’d expect,” Premier Brad Wall said.
One of the conditions Wall listed was a significant amount of money that could wipe out the province’s operating debt.
But Jason Childs, an associate professor of economics at the University of Regina, said losing the valuable SaskTel to eliminate debt is the wrong way of approaching a cash-flow problem.
“Selling your car, which is going to generate value going forward, to pay off your student loan is probably a bad idea,” Childs said.
“You don’t want to be selling assets to deal with a short-term cash flow problem, if you can avoid it.”
Childs said eliminating the debt could benefit taxpayers, because the province wouldn’t have to worry about paying interest.
However, he added using a one-time payment to eliminate debt wouldn’t get to the bottom of other financial issues. That strategy would just buy the province more time.
In his response on Tuesday, Premier Wall outlined some other key factors that would need to be covered in an offer for SaskTel. He said the ideal offer would take care of jobs in Regina and improve service and coverage.
Childs said public demands like this would likely drive down the value of an offer on SaskTel.
“Now you say we’re going to protect all the Regina jobs, that knocks off several hundred million dollars in value, and we’re going to protect rural service. That knocks off another couple hundred million in value,” he said.
These deductions come before the price of a provincial referendum, which would be another major expense.
The presence of former Health Minister Dustin Duncan has associate professor at the University of Regina, Jim Farney, taking Wall’s talk of a SaskTel sale seriously.
“To move [Duncan] out of the single biggest ministry and put him in something that’s usually second place is a signal for some big changes to be expected,” Farney said.
“And that sale is the big thing on the horizon.”
Duncan is no stranger to selling government assets.
In 2010, when he was Minister of Tourism, Parks, Culture, and Sport, Duncan oversaw the $350,000 sale of the Saskatchewan Communications Network to Bluepoint Investments.
During his time in cabinet he’s emerged as one of the four most competent ministers, according to Farney.
Duncan served as health minister for four years, and in that time oversaw the Lean Program, launch of private-pay MRI’s, and appointed the panel that will provide recommendations for “transformational change” in the health sector.
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