Saskatchewan finance minister cautions provincial budget will be tight

REGINA – It’s a snug fit that could be seen as a metaphor for a provincial budget that is expected to be tight.

Saskatchewan Finance Minister Ken Krawetz stuck with tradition by showing off a pair of shiny new black shoes for budget day – but he needed a shoe horn to get into them.

“When you develop a budget over a long period of time, there are many decisions that have to be made and priorities of government need to be weighed,” Krawetz said Tuesday as he put on the new shoes.

“It’s not an easy task. It is difficult to come up with a balanced budget.”

But to keep the books in the black, Krawetz warned “tough choices” have been made.

Krawetz will table a budget Wednesday that has to deal with falling revenues from non-renewable resources, such as oil and gas or potash. Oil revenue is $278.2 million lower than expected in the current budget, while potash revenue is down $307.8 million.

It’s a resource revenue squeeze that has already been felt in neighbouring Alberta. The Alberta government delivered a budget March 7 that anticipates a $2 billion deficit.

The Saskatchewan government started running radio ads earlier this month warning people about the budget. In the commercials, Premier Brad Wall talks about “growing deficits and crushing debt” in other provinces and countries. He talks about trying to balance the books in Saskatchewan.

Political watchers say the ads are about managing expectations.

Daniel Beland, professor and research chair with the Johnson-Shoyama Graduate School of Public Policy at the University of Saskatchewan, says “there will be some pain in the budget.”

But Beland says “it won’t be like the shock that many Albertans really faced…with their provincial budget.”

“It won’t be as bad as Alberta, that we already know, because the fiscal situation is better,” said Beland.

“Some people are really fearful and I think some bad news is coming for at least some people. But because of these ads and especially because of what happened in Alberta, some people may think, ‘Oh, it could have been much worse or it could have been worse,”‘ Beland added.

Michael Atkinson, executive director and professor with the Johnson-Shoyama Graduate School of Public Policy, says the province doesn’t want to be accused of low-balling non-renewable resource revenue, but he believes it will be more cautious with its projections.

“The difficulty of predicting revenues in a province like this one, which is so reliant on natural resources, is particularly acute,” said Atkinson.

“Budgeting in this environment is not easy and governments, especially governments committed to balanced budgets and reduction of deficits, will be very conservative with respect to their revenue projections.”

Atkinson says to some degree, the province will get a bounce from increased revenue from income tax.

The Opposition NDP said it wants to see more spaces for long-term care in the budget and more for kindergarten to Grade 12 education.

“There’s a tremendous strain on students and our classrooms,” said finance critic Trent Wotherspoon.

“We have students that are learning in hallways rights now. We have class sizes that are growing in ways that don’t support students learning.”

The NDP had its own take on the tradition of new budget day footwear and showed off a pair of tap shoes. Wotherspoon says Krawetz has been dancing around issues – talking about the good economy while running ads warning about the budget.

Krawetz acknowledges not everyone will be happy.

“There are some people who will look at a budget no matter what it is and will say, ‘This is horrible’ and there will be others that will say, ‘This is beautiful.’ So, overall I don’t expect that to be any different,” said Krawetz.