Saskatchewan Premier Brad Wall is warning the province’s rural leaders to expect tough decisions in next week’s budget, as officials tackle a roughly $1.2 billion deficit that may extend into the short-term future.
Wall delivered the message on Tuesday morning at the annual Saskatchewan Association of Rural Municipalities (SARM) convention. His roughly 35-minute long address to the group was a two-sided story, that’s become familiar in the province.
“The economy is stronger today … but revenues to the government are weak,” Wall told the crowd of roughly 2,000 delegates.
“It’s true that while our economy strengthens, the revenues [are not].”
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Wall said that municipalities shouldn’t expect provincial funding levels to increase or even stay put when the budget is released next Wednesday. He again indicated that everything is being considered to tackle the deficit, including farm-related tax exemptions and the province’s municipal revenue sharing structure.
“We’re hoping that all of our municipal partners are undertaking the same sort of efforts to curb costs,” Wall told reporters after his address.
“It’s important that they’re looking at their own expenses very, very carefully.”
SARM president Ray Orb said his members hope the current municipal revenue sharing formula remains intact. In 2016-17 rural municipalities received 28.25 per cent of the $271.6 million pot.
“The property tax base is the fall back, so of course when the revenue sharing or any kind of program decreases for the province, you have to go back to the rate payers,” Orb said to reporters after Wall’s address.
“We’ve got the formula where it is now. I think that is fair and we hope that formula continues.”
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Wall also used Tuesday’s address to strongly hint that his government will implement a managed deficit approach, which would aim to eliminate the roughly $1.2 billion shortfall over a few years, instead of all at once.
The premier told the crowd that his goal was still to balance the books this year, but insisted that his government must not be “reckless” by shocking the economy with deep cuts.
“We’re not going to … follow along with some other jurisdictions where they have just eliminated the goal all together to get to balance,” Wall said.
“If we do have a longer term approach to getting to balance it won’t be very long. It will be a matter of years and it will be easily measurable.”
The province blames much of the budget deficit on consecutive years of low revenues due to soft resource markets.
Wall said delegates should expect to see a shift “toward taxes that aren’t reliant on resource revenue” and “a shift from taxes on income and investment and jobs to taxes on consumption” in next week’s budget.
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