Mandryk: Mid-year budget update sees Sask. Party gov't live up to its rhetoric

This budget is now signalling a mature, responsible Saskatchewan Party administration, writes Murray Mandryk. That's a pretty big deal — politically and otherwise.

Seldom do governments live up to their overblown rhetoric, but the “right balance” and “on track” monikers the Saskatchewan Party government bestowed on its own 2019-20 Saskatchewan budget are becoming a cozy fit.

They reflect more than the budget numbers. They are making a bold statement as to where a 12-year-old Sask. Party government is at right now — where it should be. The “right balance” in this budget is now signalling a mature, responsible Sask. Party administration. That’s a pretty big deal, politically and otherwise.

According to the mid-year update for the 2019-20 budget unveiled Thursday, we still have a balanced budget — a $37.4 million surplus that’s $3 million more than the $34 million surplus predicted last March. We’ve come a long way from just two years ago when the 2017-18 “Wallidays” budget echoed a government lost, in distress and wallowing in its third of four consecutive massive deficits.

The government’s mid-year summary noted the $326 million, or 2.2 per cent, increase in expenses since March ($15.4 billion in total) were less than the $329.3 million increase in revenue. It’s a government now living within its means.

Admittedly, a 2.2 per cent revenue increase at mid-year is nothing to sneeze at — certainly better than most public sector workers are doing at the front end of their recent collective bargaining agreements. It’s even a bit problematic when it comes to selling government spin that the carbon tax is killing our economy.

But long gone are the days of 10 to 15 years ago, when both NDP and Sask. Party administrations could rely on near-billion-dollar resource windfalls at mid-year to offset fanciful spending.

While oil and natural gas revenues are now expected to be up slightly ($46 million more than budget predictions) because of a weaker dollar and a better heavy/light crude price differential, the predicted West Texas Intermediate oil price has again fallen to $57.03 (US) a barrel from the $59.75 predicted at budget time. Potash price projections of $504 a tonne are slightly better than the $470 a tonne predicted at budget; sales are now expected to dip to 13.3 million tonnes from 14.1 million tonnes expected at budget time. This is hardly a resource boom.

This balanced budget came through the hard work/discipline of keeping line department spending in check — something that required tough and often politically costly negotiations with public sector unions.

It also came about despite necessary adjustments to account for pension expenses for retirees still subscribing to a defined benefit plan that ended 40 years ago — something that added $228 million to mid-year education costs, alone.

“It’s really an accounting adjustment, but one that can whipsaw the bottom line,” Finance Minister Donna Harpauer told reporters Thursday.

Yet despite this unexpected accounting expense, plus whatever other added unanticipated costs there were for forest fires, floods and crop insurance, the government has been able to maintain its surplus.

This may be one of those almost-never-happens occasions when the actual success is a bigger deal than the government is making it out to be.

As of the 2019-20 mid-year predictions, the provincial public debt will be $21,389,800,000 — still a massive sum but actually $302 million less than the $21,691,900,00 predicted when the budget was released eight months ago. More significantly, borrowing requirements have dipped a massive $985 million from the $3.159 billion in the 2018-19 Saskatchewan budget. This is what happens when you stop running up annual deficits. This is maturity in government.

This all didn’t happen by accident. Finance Ministry officials confirmed Thursday that our reliance on resource revenues in an ever-increasing budget is now 12.3 per cent — half of what it was a decade ago. It’s been a complete budget transformation — one a confident Harpauer said was necessary because Saskatchewan can’t afford to rely on oil windfalls, yet can’t afford to skimp on needed annual expenses for health, where needs and new developments come fast and furious.

While Premier Scott Moe is often tagged as Jason Kenney’s tagalong, at least when it comes to the budget, Saskatchewan is really doing what Alberta needs to do.

The government’s recent budget success may now exceed its own rhetoric. That doesn’t happen very often.

Mandryk is the political columnist for the Regina Leader-Post.