Tuesday’s cabinet shake-up in Saskatchewan resulted in several portfolio changes, but one of the most talked about was moving Dustin Duncan out of health and appointing him responsible for SaskTel and SaskEnergy.
READ MORE: Premier Brad Wall announces cabinet shuffle with four new ministers
The move was seen as a signal that the sale of Sasktel , a Crown corporation, could be imminent. Premier Brad Wall spoke to the media this week using hypothetical scenarios, saying “if” the province received an offer that would eliminate operating debt – he would want Duncan to lead the sale.
Also setting off alarms: the recent sale of Manitoba Telecorp company to Bell Canada for $3.9 billion dollars.
Jason Childs, a University of Regina economics professor, sat down on Global News Morning today to shed light on what it all means.
Q: Put some context into this conversation for us
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A: The context we’re in, is a fiscal mess . We have a huge fiscal shortfall and we’re seeing the revenue drivers in the province, particularly commodity prices in oil and potash, being much lower than would’ve been anticipated two or three years ago, so we’ve got to close that fiscal gap somehow.
And you know, you can cut spending, you can raise taxes or you can sell off assets. And it looks like selling assets may well be on the table.
Q: What would the sale of SaskTel mean for consumers, just looking at their bill?
A: When you look across the country at different markets where Bell is dominant, Rogers is dominant, you’re seeing much much higher prices for voice and data plan; somewhere around the hundred dollar mark for your standard 5 gig voice and data plan.
In Saskatchewan that’s running about 65, 70 dollars. So you’re going to see your bills go up, if the sale goes ahead and gets sold to Bell or Rogers or Telus (one of the other big players) I don’t see how your bills aren’t going to go up.
Q: So what about the referendum that is to come before this . Is that a stalling measure or can we empower ourselves with this?
A: Well I think given the legislation around referendum … in this province it’s something we can empower ourselves with, and if people really don’t think they want this to happen, they can get out and vote.
The other thing you can do is vote with your feet. If you really think telecoms in this province should be Crown or publicly owned and you’re not on SaskTel, switch. If you think they should be privately run and you’re on SaskTel, switch out. Switch to Rogers or Bell, you have a choice, use it. Vote with your feet, people pay attention to that.
Q: What’s the benefit of keeping it?
A: There are a couple of benefits, one, you got to look at the consumer side. On the consumer side, you’ve got pretty good service, service that you wouldn’t necessarily see particularly in rural areas and remote areas from the private corporations. We’ve got good service, they’ve done a really good job of keeping up to date, there’s a little bit of a lag in adoption but not huge, and the prices are relatively low. From a consumer side, there’s not a lot of benefit to selling.
As shareholders, because everyone who pays taxes in this province is a shareholder, effectively, at SaskTel, we may not be getting full value, because we are seeing those lower prices to consumers, we’re not getting full value for our shares that we own in SaskTel, so that’s a side of it as well.
And when you’re looking at SaskTel and saying, “what’s the future hold for this company and what’s the future hold for telecoms generally?” selling now may not be a bad decision. If you think the asset’s going to be worth very little in the future, but it’s worth a lot right now, you want to sell now.
Q: So political economics then… Brad Wall…what could this mean for his future?
A: This could burn some political capital for him. This could be expensive for him politically. Saskatchewan residents are very attached to SaskTel and the remaining Crowns, and selling them is going to cost a lot, and it may or may not be the best decision.
I urge them to take it slow, and take it very deliberately.
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