Mandryk: Big deficit is bad news for a government that can’t make tough choices

If you aren’t eager to tell people they have to wear masks or get vaccine passports, will you raise their taxes or crop insurance premiums?

Author of the article:

Murray Mandryk

Finance Minister Donna Harpauer provided a 2021-22 mid-year budget update with a lot more bad news.
Finance Minister Donna Harpauer provided a 2021-22 mid-year budget update with a lot more bad news. Photo by TROY FLEECE /Regina Leader-Post

While COVID-19 has surely contributed to the 2021-22 provincial budget’s weakened finances, what’s more worrisome is how it has exposed this Saskatchewan Party government as one that struggles with the really, really tough choices.

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Right now, Saskatchewan’s current finances are screaming at us that tough choices need to be made. Sure, it will be ugly if the Sask. Party government makes these tough choices, but it will be even uglier if it doesn’t.

According to Finance Minister Donna Harpauer’s 2021-22 mid-year budget projections released Monday, the deficit has soared to a record $2.71 billion — a $97-million increase from the April budget that wasn’t exactly rosy to begin with.

We’re now spending $19.6 billion in 2021-22  — about $2.5 billion more than budgeted in April and a whopping $4 billion more than initially budgeted for 2020-21 when COVID-19 first hit.

The good news is the $16.7 billion in mid-year revenue represents a nearly $2.4-billion increase from both the April budget forecast and what we raked in the 2020-21 fiscal year. However, it should also be noted that $543 million is from federal transfers for the drought payments and COVID-19 supports, so not all of this is an economic bounce back.

A big deficit was inevitable this year. And unlike her less responsible predecessors who ran deficits when they didn’t have to, it’s hard to fault Harpauer for her spending choices.

Largely due to COVID-19, health expenses are projected to increase by nearly a quarter billion dollars  — a total that likely doesn’t capture all the added costs to the Saskatchewan Drug Plan.

However, as the finance minister noted Monday, the biggest problem was an added $1.8 billion in crop insurance claims that skyrocketed the program’s total indemnity forecast to $2.4 billion.

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Add another $292.5 million in support for livestock producers and another $100 million for fighting wildfires and Harpauer faces issues of Biblical proportions … fire, drought, pestilence and plague.

One should have sympathy for a government so smited, but it’s harder to do so when it keeps ignoring the science — often, for reasons that have little to do with anything other than political opportunity and gain.

For example, asked Monday whether the cost of drought-related crop insurance is due to climate change, Harpauer said “it’s up to the scientists to say.” That seems to be an area in which she and the government prefer to remain in denial.

Harpauer was quick to note droughts in the late 1980s and in 2002 and added her government had little interest in planning for another crop insurance hammering in 2022 caused by drought because when it comes to back-to-back droughts, “historically that hasn’t been the case.”

It’s not particularly helpful at this point to ignore the obvious correlation between what we saw in the fields and in the forests this past summer and the cost-reality of global warming. Worse, though, is to ignore the immediate financial reality we face.

With 29 per cent of all insurable acres receiving crop insurance payouts, Harpauer freely acknowledged costs are likely to keep going up.

Drought or no drought this coming year, crop insurance premiums are simply going to have to be addressed. No insurance program — not even a heavily government subsidized one — can simply shrug off an added $2 billion in annual claims.

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That will be a tough decision from a government that proved it was not very good at making tough decisions during the best of times. The last time it actually presented a budget that made choices was in 2017 under Brad Wall, who took a significant popularity hit.

But since Scott Moe’s arrival in 2018, the government’s willingness to implement tough, unpopular-but-necessary policy has been almost non-existent — the exception being, the initial COVID-19 restrictions. (And Saskatchewan was the first province to drop those.)

Really, if you aren’t eager to tell people they have to wear masks or get vaccine passports, will you raise their taxes or crop insurance premiums to deal with a record $27.8-billion public debt? 

What we have seen during COVID-19 doesn’t exactly bode well for tough budget choices ahead.

Mandryk is the political columnist for the Regina Leader-Post and the Saskatoon StarPhoenix.

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