PINDER: Saskatchewan's less-is-more budget

Notwithstanding its $273 million deficit, last week's Saskatchewan provincial budget — placed in a forty-year context — was a considerable achievement for Donna Harpauer, the province's venerable Minister of Finance. It was also a victory for Premier Scott Moe, who stood tall in resisting the determination of the teacher’s union to encroach upon management and board responsibilities. An issue not well understood or supported, California and Chicago teacher unions, with broadened collective agreements, have influenced disturbing outcomes in those states that the premier wisely resists in Saskatchewan. It would have been tempting for the premier to yield; many do give in to what is perceived as popular in the moment.The union, having achieved significant remuneration enhancements for Saskatchewan teachers, should now declare victory rather than continue job actions targetting students.Not that everybody is happy. Harpauer's budget — her last, she says — received anticipated criticism from the Opposition. However, it also received surprisingly balanced coverage, given the usual anti-Saskatchewan Party bias of the Star Phoenix and Leader Post newspapers.Above all, it is important to note how volatile are commodity revenues in Saskatchewan's resource-based economy, especially this being an election year — due on or before October 28 this year.A little historical context...The strong commodity market of the 1970s enabled the NDP government of Premier Alan Blakeney to invest surplus cash to augment his precious “family of crown corporations." The provincial government acquired about half the potash mines, established oil and gas and uranium upstream companies and made other unwise intrusions into the traditional private sector.A very bright intellectual, Blakeney was 'exhibit A' of those who believe, but cannot achieve, better government management of the market than free citizens making their own decisions. He also made a huge mistake in establishing a land bank for his socialist paradise, anathema to the immigrant farm families who fled communist regimes and have never forgotten this NDP policy.In the early 1980s, Professor of Agricultural Economics, Grant Devine, won his historic majority. An articulate proponent of free market principles, the deep and decade long recession challenged his exuberance. Frustrated by the economic malaise, the Conservative government became quite activist and unwisely piled up unprecedented levels of debt.But his government did privatize several of the resource companies acquired at the top of the market by the previous government, thereby forever changing the structure of the province. Then, comprised by mostly small businesses and large crowns and cooperatives, Saskatchewan now attracts investor capital, public companies and shares its resources around the world.Like Blakeney, the Devine government was turfed after two terms and replaced by Roy Romanow. The headline issue was the proposed disposition of SaskEnergy, a crown corporation which still transports and distributes natural gas. The reason for government ownership is still unclear when its sale could reduce both debt and opposition harangues.The very bent balance sheet of the province limited the possibilities of the new NDP government. In fact, responsibly cutting spending was one of Romanow’s most significant contributions to future of the province. Much of the political damage was cleverly mitigated by forming health districts throughout the province, each with separate boards and management teams, handing over the responsibility for health-care cost cuts to them. Smart politics, but also adding further bureaucracy to the already inefficient system.Romanow was followed by perhaps one of the underrated premiers, Lorne Calvert. He continued the NDP reign with moderate policies and established a royalty structure for the energy sector, which remains largely intact.Eventually the discredited Conservative and hated Liberals combined to form the Saskatchewan Party in 1997. It then went on to lose a winnable election. However, at the next election in 2007, with Brad Wall as leader, the Saskatchewan Party began what has become its 17-year tenure.Premier Brad Wall is the most talented natural politician that I have ever observed or encountered: he connects with everyone. An excellent communicator with a sense of humor, he legitimized the Saskatchewan Party and convinced Saskatchewan people of a more promising future. Like Blakeney, he also overspent during another period of commodity strength, consequently required to deliver a difficult budget before stepping down during his third term.This leads us to the current administration led by Premier Scott Moe. All you need to know about him is that at the announcement of his candidacy for the leadership, 21 other MLAs stood at his side. The party, under his leadership, won a big majority and until the medical and political ravages of COVID-19, Moe enjoyed the same popularity as Brad Wall.This gets us back to the recent fiscal budget. Having forecast a surplus last year, low potash, grain and energy prices delivered a small deficit. The NDP and its acolytes in the media have been demanding more spending while reproaching the government for suffering another deficit. Given the unsolvable cost pressures of our broken health care system, the teacher’s union strike threats and job action and similar social problems as elsewhere, the government increased spending more than it likely prefers.But supported by rural Saskatchewan, this election budget will likely be enough of a compromise to survive a resurgent NDP party in the October election. The level of debt is the second lowest among the provinces, hardly a losing election issue. Also, the Fraser Institute reported today that almost alone among Canada's provinces, Saskatchewan's government used up a smaller amount of the province's GDP in 2022 than it did 15 years earlier, in 2007 — down from 37.7% to 32.8%.The history above, including budgets, offers some observations, mostly applicable throughout the country.The sanctimonious and self-congratulatory parliamentarians who unanimously voted to establish a universal, single-payer, government operated and perceived free health care system in the early 1960s made a colossal mistake. With care-intensive ageing boomers now denied timely access to the system they funded for decades, Canada has created an entitlement mindset and at the same time an unsustainable health care system, dominated by unions and lacking the discipline of free markets and trained professionals.It is hardly just Saskatchewan that continues to spend on health-care, addressing inadequacies while crowding out other legitimate needs. Today’s voter wants more services than the country can afford (we all love the free-model) while demanding lower taxes. Politicians are not magicians — eventually someone pays for “free” stuff.Finally, let us celebrate the career of Finance Minister Donna Harpauer, who recently announced it was her last budget. She has responsibly served the province for 17 years, the last seven as deputy premier and minister of finance. The minister is soft spoken, humble, forthright as well as very effective and diligent in the important and challenging role in commodity-based Saskatchewan.Minister Harpauer, our gratitude and anticipation of your next adventure.

PINDER: Saskatchewan's less-is-more budget

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