Wednesday August 20, 2014

EDITORIAL - Budget likely to have few surprises


So we are a week away from the unveiling of the 2014-15 Saskatchewan Budget.

It might be the most under-anticipated budget in the province’s history.

To be perfectly blunt, it is a document which has become so structured by constraints regarding finance that it can offer little in the way of surprises, or for that matter new impact on the province and its people.

There are three major costs facing the province, and in more general terms, all provincial governments; health, education and debt serving.

In Saskatchewan in particular health care is a sacred cow. We might have a more right leaning government in power at present with the Saskatchewan Party, but Premier Brad Wall is smart enough not to take on changing the health care system in too dramatic a fashion, less he opens the door to a resurgence of support for the New Democrats.

In the end, ideologies aside, health care is a huge drain of provincial coffers, and one that will not easily be wrestled into anything resembling a spending downturn. That is simply a reality in a province with people spread over such a large land mass, and a population with a significant number of people reaching the age where they rely on health care services more.

Education is an area which is also difficult to reduce costs for.

Making sure young people are educated and trained to fill the jobs associated with an increasingly more diverse economy is essential in terms of the province’s future.

It is what keeps our young here. It is what allows our economy to grow.

Debt too is a cost with little wiggle room. When you owe money, payments and interest must be paid, even if it takes a huge bite of the budget.

What is left for the government to tinker with is a small portion of spending covering everything from agriculture, to highways, to social services. While such services are of course important, how they roll out has a limited impact on the overall budget.

With major costs pretty well established, the government has limited room to impact things with its budget.

That is even more true when you know going in the budget will be declared a balanced one.

While a balanced budget is generally seen as a wise fiscal management decision, it does by its nature takes away another tool from government in regards to influencing the course the province takes.

There is also a realization going into this budget that fiscally the year ahead is not likely to be as strong as the one just past.

Potash revenues have been off even mid-range expectations for the past three years, and little suggests a rebound is imminent.

Grain and oilseed prices are not likely to match the past year, and realistically we cannot expect a second bumper crop either, so that will mean agriculture contributes less to the economy and government coffers.

Revenues for the province will be under some added pressure, and again that means less opportunity for the province to impact things with its budget.

It all suggests next Wednesday’s budget will be one of holding the course, with fingers crossed the economy does not backslide so much as to ruin whatever numbers the Saskatchewan Party plugs in to keep the budget balanced without dipping into our pockets for added tax revenues.




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