Saskatchewan facing a billion-dollar deficit

The Saskatchewan government is cutting spending and has imposed a hiring freeze as it wrestles with aballooning deficit of about $1 billion.

REGINA — The Saskatchewan government is cutting spending and has imposed a hiring freeze as it wrestles with a ballooning deficit of about $1 billion.

Finance Minister Kevin Doherty released a fiscal update Tuesday that shows the shortfall is far higher than the $434 million deficit the government projected when it introduced the budget in June.

Low oil and potash prices are having a greater impact on revenue than expected, but corporate income tax, personal income tax, provincial sales tax and fuel tax are also down, he said.

“To start moving the provincial budget back to balance, significant measures are needed with more to follow in next year’s budget,” Doherty said.

The restraint measures include watching public salary expenses, pegged at about $6.3 billion a year, because “if we are going to control government spending, we have to control our labour costs,” he said.

A plan to save $217 million across government includes layoffs and limiting overtime in health care to save $22 million. There are also plans to save another $22 million in health with cuts to programs and what the government calls program delivery changes.

Tax hikes could be considered for next year.

But NDP finance critic Cathy Sproule says something’s wrong with the deficit numbers coming four months after the most recent budget.

“It’s more than doubled, so I think there are some serious problems with the way they’re projecting,” said Sproule.

The larger deficit also means the province is borrowing $800 million just to operate.

“We simply haven’t got the cash this year to pay all of our bills,” said Doherty.

“If you have that kind of revenue fall off, that precipitously, you have to continue to pay the salaries of your nurses and your physicians and your teachers and your social workers and all the different things that government’s involved in, so we need to borrow some money to pay those bills this year.”

Doherty said borrowing to covering day-to-day operating expenses — not just for capital projects — is only a bad move if you have no plans to stop doing it.

He said the province has a plan.

“We have to take strong measures on the spending side,” he said.

“At the same time, when your economy’s going through some challenges, you don’t want to further shock your economy by laying off literally hundreds of teachers or hundreds of nurses or hundreds of social workers or hundreds of government workers.”

The borrowing doesn’t sit well with Todd McKay, prairie director of the Canadian Taxpayers Federation.

“This is a delayed tax hike because we’ve got to pay this money back. We’ve got to pay it back with interest,” said McKay.

The province needs to get a hold on expenses, he said.

“It’s not going to be easy. It’s not fun. But that’s what folks are doing at their kitchen tables and that’s what needs to happen in government.”

Alberta and Manitoba have taken similar steps.

Rachel Notley’s government laid out a plan in August to increase capital spending, and borrow to pay for day-to-day operating expenses while avoiding cuts to front-line staff and services.

The Manitoba government said Monday that it plans to pass a law to control wage increases in the public sector and aims to eliminate dozens of provincial boards and commissions as it tries to bring down a stubborn deficit.

Just Posted

Sunny weather improves farmers’ prospects

A harvester kicking up dust. It’s a picture that will bring a… Continue reading

Rural transit pilot project being considered

Penhold, Innisfail and Red Deer County councils to decide whether to go ahead with project

Red Deer fire station up for sale

Home sweet home at Fire Station 4

Most surveyed Innisfail residents give urban chickens the thumbs up

Town of Innisfail will discuss whether to allow backyard chickens on Monday

‘Mom I’m in trouble:’ Canadian, Brit face 10 years in jail for alleged graffiti

GRANDE PRAIRIE, Alta. — The mother of a Canadian who was arrested… Continue reading

Coyote on the prowl near Penhold

This coyote was out on the prowl in a field just west… Continue reading

Sky’s the limit as Calgary opens testing area for drones and new technologies

CALGARY — The sky’s the limit as the city of Calgary opens… Continue reading

Hi Mickey, ‘Bye Mickey: 6 Disney parks on 2 coasts in 1 day

ORLANDO, Fla. — Heather and Clark Ensminger breathed sighs of relief when… Continue reading

Court weighs ‘Apprentice’ hopeful’s suit versus Trump

NEW YORK — President Donald Trump’s lawyers hope to persuade an appeals… Continue reading

StarKist admits fixing tuna prices, faces $100 million fine

SAN FRANCISCO — StarKist Co. agreed to plead guilty to a felony… Continue reading

Annual pace of inflation slows to 2.2 per cent in September: Statistics Canada

OTTAWA — The annual pace of inflation slowed more than expected in… Continue reading

Jury finds Calgary couple guilty in 2013 death of toddler son

CALGARY — A jury has convicted a Calgary couple in the death… Continue reading

Most Read