The Saskatchewan government will have a $1.3-billion cash surplus under a projected $14.15-billion spending plan that was submitted to the legislature on Wednesday, as the province shifts to higher spending on health care, education and infrastructure for 2020-21.
The budget estimates, crafted by Finance Minister Donna Harpauer, aim to serve as a stimulus package since a formal budget won’t be released until the summer or fall.
The government did not release its revenue estimates since they’re no longer relevant as the province is set to lose money in taxes and oil due to the effect the coronavirus pandemic has had on the economy.
Despite anticipated losses in revenue, the government is hopeful certain stimulus measures can maintain Saskatchewan’s economy.
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“This is an unprecedented and challenging time in our province. Our government’s first priority is the health and safety of Saskatchewan people,” Harpauer said.
“This is precisely why we need to proceed with these expenditures now, providing stability and much-needed new spending at the start of the fiscal year.”
Harpauer’s budget estimates reflect $1 billion in new capital spending, bringing total capital spending for 2020-21 to $2.7 billion.
The estimates also boost last year’s expenditures by 3.1 per cent, including $5.7 billion for health care, $3.74 billion of which will go to the Saskatchewan Health Authority.
The province is tackling a worsening addictions crisis by creating specialized crystal meth inpatient treatment services in Estevan, and enhancing addictions and mental health services, including those for children and youth.
The government is hopeful infrastructure projects will keep people employed at a time when the economy is facing a downturn.
The government is kick-starting an ambitious plan to update 10,000 kilometres of roadways within 10 years, 1,000 kilometres of which will be completed this year. The province also announced seven new schools for the province.
Harpauer’s budget estimates also introduced new incentives to support the building of homes and pipelines, including a PST rebate of up to 42 per cent on new home construction.
As for new sources of revenue, the government will start collecting provincial sales tax on out-of-province e-commerce platforms.
The spending plan will push the province’s public debt to $22.2 billion, an increase of over $1 billion from last year. Harpauer made the decision to take on more debt in 2020-21 so the government could have more cash as it grapples with the effects of COVID-19.
“I made the decision two years ago that we needed to maintain a liquidity level, and maintain it… so we’re not wondering how we’re going to make payroll,” Harpauer said.
Around $200 million, which was scheduled to pay off debt, was transferred to the province’s cash surplus for the 2020-21 estimates.
“We’re well-positioned to manage through this challenging time and provide additional resources… if required,” Harpauer said.
The finance minister anticipates that when the budget is finally presented later this year, it will have a deficit, a decision supported by Premier Scott Moe.
“We’re giving that security to Saskatchewan people,” Harpauer said. “We’re not raising taxes and we’re still going to be strong in our commitment to this province.”
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