The first election debate we should have is what to do when the oil money comes back.
It will come back.
Sooner (and hopefully sooner than later) the Saudis and others will see reason to turn off the taps. Oil prices will recover, followed by the Saskatchewan economy, followed by the provincial treasury.
But if we hold true to form, government will keep spending these non-renewable resource dollars in a matter best suited to their re-election.
There’s got to be a better way and there’s no better time to talk about that better way than during the next provincial election campaign to start within days.
But at least we have starting point for such a discussion, via Premier Brad Wall’s exploration of a Saskatchewan version of a heritage or sovereignty fund.
In no small irony, this discussion actually began in the last provincial campaign in 2011, when it was raised by former NDP leader Dwain Lingenfelter.
In a move that was rare for election campaigns and even rarer in the context of the rivalry between the NDP and the Saskatchewan Party, Wall acknowledge that the idea of such a rainy day fund was actually a pretty good one.
As a result, Wall assigned former University of Saskatchewan president Peter MacKinnon a year after the election to research a heritage fund model that might work for this province.
What MacKinnon came up with it Saskatchewan Futures Fund — somewhat modeled after Norway’s supposedly recession-proof sovereignty fund that’s socked away close to one trillion dollars since 1990.
MacKinnon’s proposal was far more modest, suggesting putting into savings all natural resources resource revenues that exceeded the five-year average.
This way, the Saskatchewan government would have a consistent revenue source for not only the lean years we are now experiencing due to the downturn in oil but also a consistent framework for budget revenue upon which it could determine the appropriate level of expenditures.
Alas, that’s a little too idealistic in today’s hardball world of politics.
After MacKinnon’s presentation to cabinet, the Wall government couldn’t even find the suggested $100 million in “seed money” to get the fund going.
And what we saw in the last budget is former finance minister going to the open market to borrow $700 million for capital infrastructure spending — money that will have to be repaid with interest.
It’s also money that could have come from a heritage fund had some past government been wise enough 10 years ago to set aside some cash we collected during the boom years.
So here we sit today — with a billion dollar deficit in 2015-16 when you add that $700 million in borrowing to the $262.2-million shortfall that new Finance Minister Kevin Doherty actually does acknowledge.
We got into this mess in 2015-16 budget because non-renewable resource revenue fell by $388 million from the budget projections 11 months ago and because spending has increased by $100 million because of things like unforeseen forest fire fighting costs.
These numbers are likely to only get worse in the third-quarter update of 2015-16 budget. And at Saskatchewan Urban Municipalities Association (SUMA) convention last month, Wall guaranteed another deficit for 2016-17.
However, nothing offered by the NDP so far suggests they would be any more fiscally responsibility. In fact, NDP has told us nothing about how they would spend own money.
We need more discipline in government spending and that will only come if we force politicians running for office to talk about how these guidelines should be put in place.
The way to put those guidelines in place begins with talking about a Heritage Fund.
That’s what we should be talking about during this election campaign.
In my column two weeks ago I incorrectly stated the cost of the Boundary Dam carbon capture and storage. It is $1.5 billion.
Murray Mandryk has been covering provincial politics for over 22 years.
