The province’s expenses will total an estimated $14.1 billion for the 2020-21 fiscal year, an increase of 3.1 per cent.
Finance Minister Donna Harpauer presented a pared-down version of the provincial budget Wednesday, announcing expenses but not projecting any revenue for the year. The government said it could not accurately predict what its revenue would look like given uncertainty in the global economy related to both a crash in oil prices and COVID-19.
“We considered (delaying the budget) but have decided to proceed with the budget estimates so that vital spending in health care and education and in other areas can proceed,” she said.
“This will provide stability and much-needed new spending at the start of the fiscal year.”
The spending estimates include a record $5.77 billion for health care, an increase of $211 million or 3.8 per cent, from last year. That includes $3.74 billion for the Saskatchewan Health Authority, an increase of $140.6 million. Health funding also includes $434.5 million for mental health and addictions supports and services, including a $12 million targeted increase.
Health spending also includes an additional $20 million to address surgical wait times and pay for about 3,700 additional surgeries.
Of the more than $300 million in estimated spending for the Prince Albert Victoria Hospital expansion, only $15 million will be included in this year’s budget. That covers planning, design and procurement activities. Harpauer confirmed that shovels will not be in the ground this year.
Prince Albert Mayor Greg Dionne said he wasn’t surprised by the move. He said the hospital is still coming, and this is just the next step.
He declined to comment further.
An additional $2 million will cover a new CT scanner in Melfort.
The Ministry of Education also saw an increase. That department will see an increase of $86 million or 3.5 per cent to bring it to $2.57 million. School divisions will receive $1.94 billion in operating funding, a $42 million increase. That addresses enrolment growth, inflation and collective bargaining.
There is no additional funding in the education budget to address increased class size and composition.
Saskatchewan also announced a new oil infrastructure investment program to support new and expanded pipelines and terminals through a transferrable royalty credit equal to 20 per cent of the approved project expenditures.
They also announced a new PST rebate for home construction that will provide up to 42 per cent of PST paid on the purchase of a newly constructed home. The intent is to support home builders as well as families looking to buy a new home. The rebate will exclude the cost of land, which is not subject to PST. It will be applied for the period of April 1, 2020, through April 1, 2023.
Harpauer said the province is in a good position to weather the upcoming economic and health concerns from the spread of COVID-19. The province has $1.3 billion in liquidity in the form of short-term investments that can be converted to cash.
“We are well-positioned to manage through this challenging time and provide additional resources to address the health and economic challenges of COVID-19 as required,” Harpauer said.
“our estimates deliver significant increases in health care funding,” she continued. “Our government is also delivering significant capital funding to provide a needed stimulus for the economy. The province is in a strong fiscal position to provide further resources required for the health and safety of Saskatchewan people through this crisis.”
Harpauer touted the estimates’ increased contributions to community-based organizations.
“One of the big lifts is to community-based organizations that do a lot of yeoman’s work,” she said. “They may be doing even more through this situation because they’re in the community. They’re the supports that we have there.”
A full breakdown of which community-based organizations would be receiving increases, and by how much, wasn’t provided.
The province is deferring $200 million in a planned operating debt paydown in order to have a higher cash buffer to access during the COVID-19 pandemic. it prevents the province from having to resort to borrowing to pay for emergency costs.
The province’s main income sources are taxes, federal government transfers and resource revenues, she said. While some of those may be reduced — such as taxation — the government will still have revenue.
“I would say contingency is how I would categorize (the buffer),” she said. ‘We do have regular income flowing in. I would say there is flexibility on certain tax payments at this time so if there is a shortfall or delay we’ve got the cash to make payroll.”
Harpauer said on March 8 she was watching as markets tanked.
“Our surplus was thin last year. I didn’t every anticipate this. I don’t think anyone did,” she said.
“I watched the markets and I can’t use that language in this room.”
While previous pressures, such as the oil price crash of a few years ago were spread out over the course of the year, Harpauer said she’s concerned about how long this uncertainty will last.
“I think this is going to be very long term and we don’t know what (the effect) is going to be.”
Harpauer said the government is committed to sticking to the spending announced Wednesday and it doesn’t expect to raise or lower taxes during this budget cycle. She also said having some idea of what being spent this year is essential.
“Uncertainty is not good,” she said.
“(Without a budget) we’d be frozen to last year’s expenditures. It’s important for the construction industry to know what projects would be available. It’s important for people to know there are increases in health care. It’s going to be important for community-based organizations to know they’re going to get an increase in funding. Life is going on even though it’s not business as usual.
“I’m certain we’re going to spend that (estimated) money. We’re going to go into a deficit position because of this situation I think it’s going to be more critical than ever to keep our economy as strong as we can and that’s going forward with incentives. Every single tax affects the economy in some manner. I’m confident in the next fiscal year we wouldn’t be revisiting the tax for any increases or decreases.”
Meili calls half-budget “not necessary”
Despite putting the legislation forward, it won’t actually be tabled or passed in the legislature. The legislative session has adjourned to help slow the spread of COVID-19. The funds, instead, will be spent through special warrants passed by Cabinet. The document is merely a guideline of what the province will spend.
“Most of that investment, I think, is relatively solid, with the exception of what happens with COVID-19,” said Premier Scott Moe.
“I don’t know what that number will be in Saskatchewan,” he added. “But whatever it is, that funding will be there.”
As the budget document wasn’t passed and was drafted back in February, long before the current situation evolved into what it is, NDP leader Ryan Meili didn’t see why the half budget was necessary at all.
“It never made sense to introduce a budget. It makes even less sense to introduce half of a budget. This is in so many ways divorced from today’s reality,” he said.
“They’re on completely different planets. what’s going to be needed is a major injection. None of that is in that document.”
The government’s promise that whatever is needed will be there is vague and unhelpful, Meili said.
“It avoids any accountability and I think makes it much more difficult for them to actually deliver.”
Even a high-level estimate of the worst case would be better, he argued. He said the provincial government could look at federal projections that indicate anywhere from 30 to 70 per cent of the population could become infected. It could then spread that over a two or six month period — depending on how effective social distancing is — to have an idea of what could be needed.
“Even if you look at some of the gross numbers, that gives you some sense of the different scenarios,” he said.
The document distracts from what’s needed, he argued. Since it won’t be tabled, but allocated through Cabinet, the entire exercise was “not necessary,” he said.
“What we should be focused on is our response to COVID-19.”
For Meili, that looks like immediate measures to put money in people’s pockets, including direct payment to low and middle- income families and supports for parents struggling to access child care. It looks like ensuring no one loses a home or has utilities cut off because they can’t pay. He also argued for supports for small businesses, such as wage supports and industry or regional supports.
“We need to make sure anyone who is infected or is taking time off has not just the guarantee to not lose their employment, but has paid leave,” he said.
“Having that money circulate through the economy is so essential.”
The federal government did provide such an injection on Wednesday, unveiling $27 billion in direct support for Canadians and $55 billion in other measures to help prop up a flagging economy.
Meili demanded a plan about how much the provincial government will pay, and criticized Moe for providing nothing more than “blank cheque” for the health system.
“Give us a very clear description. How many dollars? How many doctors? How many nurses? How many beds? How many ventilators? How many swabs? Give us all of the information, based on what you know.”
Meili, though, did agree that Saskatchewan was in a good place to be able to react, adjust and make it through the pandemic.
“We have many things going for us. This is our chance to get things right,” he said.
“It’s important to know we do have room,” he said of the $1.3 billion in cash Harpauer touted.
“This is a time to draw on past success and invest in the people of Saskatchewan and not be shy about it.”
He also said that while the province has been more communicative in the past few days, he wishes he had daily briefings and that the NDP was included as Saskatchewan tries to ward off the worst of COVID-19.
“There’s… a great deal we can do to help.”
— with Leader-Post files from Arthur White-Crummey.