Saturday July 26, 2014




Not a lot of great rural news in budget

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Budgets are seldom remembered for what’s not in them … although that sure seems to be the theme of the 2014-15 budget.

What was not in the budget was any property tax increase to pay for infrastructure, as foolishly suggested by Premier Brad Wall in pre-budget talk.

What also wasn’t in the budget was the much-speculated increase tax on credit unions.

Had the province altered the current arrangement in which credit unions pay the small business tax rate of just two per cent on only their first $500,000, it would have cost them more than $7 million a year. With so many credit unions located in rural Saskatchewan, this would have been a hit to our smaller communities in particular.

One might also suggest that there wasn’t as much revenue in the budget as one might have hoped. Projected government revenue of $14.07 billion for 2014-15 is a .7-per-cent decrease from last year and a huge departure from what Saskatchewan has enjoyed for a decade now.

This is largely due to nearly a $400-million drop in net income from other government business enterprises, but the real culprit is taxation revenue (increasing only $212 million to $6.8 billion) and non-renewable resource revenue (increasingly only $142 million to nearly $2.7 billion).

The latter two numbers don’t bode well for rural Saskatchewan fueled by the agriculture economy (which contributes mightily to income and sales tax revenue) and oil, natural gas and potash production (which provides the bulk of our nature resource revenue from royalties).

Also, average oil prices of $98 US a barrel are predicted to dip slightly for the next five years and only increase to $96 a barrel by 2018. The same goes for potash, averaging $345 a tonne in 2013. It will only recover to $287 a tonne by 2018.

Wheat at $257-a-tonne average in 2013 is also expected to slide and only recover to $264 a tonne by 2018. And canola at $542 a tonne last year will take an even more dramatic dip and is only expected to recover to $537 a tonne by 2018.

These are less less-than-hopeful signs for the rural economy. So are budget prognostications of an $800-million increase in public debt to $11.8 billion in 2014. Also missing is any sign of a a solid debt reduction strategy.

As for all the fuss and bother last year over nursing homes, there’s just not much new in this budget.

And, certainly, there is no expectation of a contribution to the Saskatchewan Futures Fund — largely because resource revenues will remain below the five-year average.

So was this a budget of failed expectations? Well, that’s not necessarily completely the case for rural Saskatchewan.

The Sask. Party government will continue its aggressive infrastructure strategy including $2 billion in Crown corporation capital projects. Among those projects will be $355 million to expand SaskTel’s wireless network, $300 million for SaskEnergy’s pipeline expansion and $1.2 billion for SaskPower — much of which will go to clean coal projects in southern Saskatchewan. This is good news for rural people and the rural economy.

There will also be $887 million more spent on government capital infrastructure. That will include: hospital renewals in Moose Jaw, Prince Albert and North Battleford; renovations to St. Brieux School, construction of schools in Langenburg and Gravelbourg and design of new schools for Martensville and Warman, and; $4.5 million to Yorkton’s Parkland Regional College and another $1 million to Weyburn’s SouthEast Regional College.

Highways will receive $405 million that will include the twinning of Hwy. 16 from Saskatoon to Clavet and Hwy. 39 from Estevan to Beinfeit, plus work on Hwy, 7’s passing lanes from Delisle to Rosetown.

And while the $371-million agriculture budget is less than last year, there will be $7.5 million more for research and marketing. This is nearly a 10-per-cent increase — in excess of the average budget increase.

It is budget that seems more defined by what’s not in it, but there are a few goodies for rural folks.

Murray Mandryk has been covering provincial politics for over 22 years.


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