Due to ongoing economic pressures, especially in the oil sector, the Saskatchewan government announced it will run deficits for the next two budgets.
Premier Brad Wall made the announcement in front of hundreds of delegates from all over the province who were gathered at the Queensbury Convention Centre in Regina for the Saskatchewan Urban Municipalities Association (SUMA) convention.
“Our government has serious revenue shortfalls,” Wall conceded in his address.
The 2015-2016 year will dip into the red. The 2016-2017 fiscal year is expected to carry a deficit as well before returning to balance, Wall said, provided the SaskParty is re-elected after voters go to the polls in early April.
Calling the move a last resort, Wall said he did not want to make further cuts to any programs. He also said he didn’t want to hit residents in their wallets with higher taxes either.
“I just don’t want to increase taxes on an economy that has had its energy sector challenges. I don’t think that the timing for that is right,” he said.
The premier also ruled out a carbon tax on the grounds many high emitters also double as big employers.
Wall would not disclose the depth of the deficit but said it would be modest. He said he couldn’t give a figure yet, but he did expect one to be revealed in the third quarter report in a matter of weeks. The report will also include a four-year projection, with a better idea what the deficit could look like for the next fiscal year as well, he added.
NDP OPPOSITION SAYS PUBLIC IS BEING KEPT IN THE DARK
NDP deputy leader Trent Wotherspoon said he thinks the public is being kept in the dark about the current state of the province’s finances.
“It’s just not acceptable for the government to launch Saskatchewan people into a major financial hole, asking them to pick up the tab,” he said.
Wotherspoon said the NDP is opposed to deficits. When asked whether the party would run one, he said he hopes they wouldn’t have to, but said they don’t have a clear picture of the true financial hole Saskatchewan is in.
“This government’s struggled to get the job done during the best of times. We’ve come through a better part of a decade-long boom in resource revenues and we have a government that didn’t save a dime during that period,” he said.
Wotherspoon said there’s plenty of spending by the SaskParty that could be reallocated to other priorities, citing consultants and the LEAN program as taking up valuable dollars.
Despite the successive deficits, the premier said he would keep the municipal revenue sharing agreement the same at one per cent of the provincial sales tax, garnering applause from the crowd at SUMA.
The SUMA convention is on until Wednesday.