Last year at this time, we criticized the government for failing to build safeguards into the budget that would protect the people of Saskatchewan from the economic instability caused by the United States’ erratic tariff and trade policy under President Trump. Finance Minister Jim Reiter justified the lack of protective measures based on the “fluidity of the tariff situation,” arguing that the uncertainty over the length and breadth of the tariffs made it impossible to build into the budget:
“We do not know whether the tariffs are going to last for three days, three months or three years, nor do we know at what rate these tariffs will be levied over time.”
This year it seems the government has gotten the memo that people are justifiably concerned over the uncertainty and instability that has only seemed to grow since last year’s budget. Hence this year’s budget title, “Protecting Saskatchewan.”
But while the government’s budget repeats its promise of protecting the people of this province, there is very little in the budget that would constitute real protection from the economic insecurity, unaffordability and deterioration of public health care that has so many in this province anxious about their future.
Public health care remains unprotected
While Saskatchewan’s public health care system remains in critical condition, the government geared most of any new health spending to its Patient First plan. That means more public money to for-profit diagnostic and surgical providers. And while there is $637 million for new and expanded health facilities, one wonders who will staff these facilities as our existing hospitals and care centres remain chronically understaffed.
On affordability, many of the measures announced today were just the continuation of policies the government had already announced in its Affordability Act. The government did announce a new $1,000 one-time per household utility arrears recoverable benefit to Social Assistance (SIS) recipients to prevent evictions. While this will no doubt be welcome to SIS recipients, it will only constitute a stop-gap measure if recipients remain in crushing poverty. While the government did raise social assistance rates by two per cent in this budget, that will not even cover the cost of inflation—particularly if world events continue to drive food and fuel costs higher.
Real protection for Saskatchewan’s economy
As a vulnerable resource economy, were the government serious about protecting Saskatchewan from the volatility and shocks of resource commodity prices, it would entertain the idea of creating a Saskatchewan Resource Fund.
A resource fund is where a government commits to bank a certain percentage of non-renewable resource revenues every year. Norway commits 100 per cent of its oil and gas revenue to its resource fund, while Alaska commits 25 per cent of its oil wealth every year. The purpose of the fund can be determined by voters—to deliver a yearly dividend, to fund economic development or to provide steady investment returns year-over-year. Saving a portion of resource revenues each year can also help smooth out expenditures because governments can bank revenues when they are high and draw down these funds when revenues decline in order to prevent these “boom-bust” spending cycles that we as a province have been so prone to. Saskatchewan’s short-lived Fiscal Stabilization or “rainy day” fund was supposed to operate in just such a fashion.
With the U.S. war on Iran expected to drastically increase oil prices into the near future, it would be an opportune moment to create such a resource fund. While we certainly cannot predict the future, we do know that global oil demand will soon reach its nadir. This may come even more quickly than expected, particularly if high oil and gas prices further incentivize countries to seek out greater electrification of their heating and transport. We may have a limited window with which to accumulate enough revenue to ensure a Saskatchewan resource fund could continue to deliver economic benefits after the world transitions away from fossil fuels. As former Premier Brad Wall remarked when asked about the need for a resource revenue saving fund, “I just don’t see how we would want to delay any longer.”
