Breathe deep. This is going to hurt a bit.
It’s not something you want to hear from your doctor… or your finance minister at a time when he’s just announced the $400 million provincial deficit has just leapt to $1 billion.
We are all about to feel the pain.
No, rural Saskatchewan, your name didn’t come up specifically.
One even suspects that governance structure for things like rural municipalities will be maintained, notwithstanding that the Saskatchewan Party government has made it known that local school and health boards are clearly targets for reduction.
It’s strange given that the province only has 28 school boards compared with 111 in 1992. By comparison, there are 296 rural municipalities, which is only three less than the 299 RMs we had in 1992.
But by no stretch of the imagination does that mean that rural Saskatchewan will emerge unscathed.
Can the government continue to fund RMs or towns and smaller cities at the current level? Might we see a considerable shift in property taxes?
Will rural school boards have to seriously look at the teaching complement? Will busing for rural kids continue?
And might we be in for another round of rural and smaller city hospital cuts?
All of these questions are now in play in the wake of current finance minister Kevin Doherty’s 2016 to 2017 mid-year budget update that sees the deficit grow to $805.6 million from the $434.2 million predicted in June, which is up by $371.4 million.
Add a $235.5 million deficit at the Workers' Compensation Board (largely due to a $281-million rebate to businesses in June) and the total summary deficit becomes $1.0421 billion.
That makes for a billion-dollar annual deficit the likes of which we haven’t seen since the Grant Devine Progressive Conservative government of the 1980s when billion-dollar annual deficits were the norm.
And most of rural Saskatchewan remembers the pain that came after the 1992 and 1993 budgets when the Roy Romanow NDP government closed 52 rural hospitals.
Certainly, it would be tough for anyone not to remember those days, given that the Saskatchewan Party has spent the past nine years reminding voters about the rural school and hospital closings.
The difference this time is that Premier Brad Wall and his Saskatchewan Party will not have the luxury of blaming past administrations for current problems.
This is Wall’s and Doherty’s mess to fix over the next four years.
And make no mistake that we are in a mess. Doherty announced last week he had to borrow $500 million just to pay for the operational costs (line department expenses for schools, hospitals, roads, salaries, etc.) in this year’s budget.
That means $500 million directly added to the debt, right to the general revenue fund “credit card” debt that now soars to $4.6 billion from $4.1 billion.
Of course, it’s not all bad news.
Credit Doherty for already keeping departmental spending in line. And (except for potash prices), resource revenues like oil do seem to showing signs of recovery.
Sure, tax revenue was down $400 million from the budget largely due to sales and income tax revenue.
But with a growing population paying taxes, tax revenue could easily recover in coming years.
The bad news is the problem is in the here and now.
"To start moving the province back to balance, significant restraint measures are needed," Doherty said.
That includes a hiring freeze, tougher wage negotiation, and, yes, tax increases that the Saskatchewan Party said it wouldn’t impose.
Even taxes like the $121-million farm fuel tax exemption – one the provincial auditor has questioned – or the PST exemptions on fertilizer, seed, machinery repair, etc. could be on the table.
Breathe deep, rural Saskatchewan.
