Sask. academics speak on political, economic implications of provincial budget

Saskatchewan's 2022-23 budget, released Wednesday, has garnered plenty of reaction. After the budget's release, CBC's Sam Maciag sat down with two Regina-based academics to get their impressions.

Jim Farney is director and an associate professor at the Johnson-Shoyama Graduate School of Public Policy and Jason Childs is an associate professor of economics at the University of Regina.

The interview has been edited for clarity. 

Maciag: Are there any clear winners in this budget? 

Farney: I don't think there is any big single winner. If you think of the economic times we've just come through, [it's] a remarkably get-back-to-the-steady-state-path budget. Thinking of it politically though, I think the government has pulled off a really interesting trick.

They're a Conservative government, they've got some populist leanings, but they've managed to put together a budget and a long-term plan in which Saskatchewan is open to export our resources globally, and it's working really well this year, and we're open to international immigration and it's solving some key policy problems for us. That is a really big strategic picture thing they have won on this year.

The budget is forecasting oil at about $75 U.S. per barrel. We saw Alberta forecast oil at $70. What is the risk-reward here? 

Childs: Oil prices today were around $110 a barrel. There is money we were not putting in the budget that we're leaving potentially on the table and could be spent later or used to pay down debt. So that's the upside risk. We've got money that might come in that we haven't allocated to anything.

The downside risk, I don't really see prices being much below the forecast in the coming year.

PST is being added to tickets, sporting events and gym memberships. At a time when people are paying more for everything, won't this feel like piling on?

Farney: I think people are going to notice it. If you go back six or seven years, when they added PST to used cars, there was quite a bit of outcry.

The Canadian Federation of Independent Business was criticizing the government [Wednesday] for the planned increase to small business taxes as well. So there are tax increases. They are being criticized for them.

But politically, I think it's safe ground. They are going to annoy some folks. But the people who are annoyed by tax increases are unlikely to vote NDP. I don't think that's a really credible switch. So and they're relatively minor. We're going to notice some people grumble about them, but it's not some sort of massive new tax.

There is some more spending in terms of education and social services, but not a lot in terms of actual increases. Where does this leave those struggling to make ends meet? 

Childs: There's not a lot of help at that end of the spectrum and there's not a lot of new money in the budget. So inflation is going to erode the real dollars that we're seeing spent here.

We're seeing actually in some of these items, a decline in the real dollars available. Education's in that ballpark and that's going to create probably some labour strife, as people and workers start to ask for wage increases that keep up with inflation, but it's not in the budget. That's going to be a problem for the next little while. 

The province has noted it wants to take over the federal carbon tax and that a report on its plan of action won't happen until fall of this year. What's the strategy here?

Farney: I'm not clear how much room they'll have to do something really different. Folks have talked about a New Brunswick-style plan where you pay the tax and then it's immediately rebated, and the feds have said, no, we won't let you go there.

I don't know how much different they'll get it, but it will be branded as a Saskatchewan plan and there'll be some different carve-outs for agriculture, perhaps. But I don't think we're going to see anything fundamentally different from the federal requirements. 

LISTEN | Finance Minister Donna Harpauer spoke about her government's budget with host Stefani Langenegger on the Morning Edition: 

What are the financial implications for taxpayers? 

Childs: Each household in Saskatchewan is contributing about $750 a year in carbon tax, and that's going to rise on April 1. We're getting, through tax returns, a lot of that back. It's variable by where you live and how much you earn. So what the dollars and cents are going to be if we can move to a Saskatchewan plan depends on how they go about making it revenue neutral or if they make it revenue neutral at all.

We have to wait and see what the plan actually looks like and who's going to be the recipient of the funds. 

Where does this all leave the Saskatchewan NDP?

Farney: They had two big lines of criticism of the budget. One was the affordability piece, which is a real concern and it's important right now, but it's a really slippery political issue to figure out who owns it. Because you've got Peter Poilievre, for example, federally, trying to say, I own that issue with a different set of solutions.

The other side is the more conventional stuff that [Childs] was talking about, that spending on programs doesn't keep up with need. The social service increase of $30 a month is a great example. I think they'll land punches on that. But they have been for 15 years now and not gaining ground.

The finance minister says she is sticking to a plan to return to balance by 2026-27. Based on what you saw this last fiscal year and then looking at this budget, is it doable? 

Childs: Absolutely. It's doable. It's in the numbers. I mean, we could be back to balance if oil prices stay where they are. We're very close there, too. For example, last year we would have seen a balanced budget if agriculture spending hadn't spiked due to the drought.

We're within striking distance of a balanced budget here. The revenue is there and the spending hasn't gotten away from that revenue. But we'll see what surprises this year brings, because it's been an eventful couple of years. 

What's one thing you will both be watching?

Farney: I'm really curious to see how the NDP melds a coherent position. I mean, they've got some stuff in place. There is the leadership contest that they're already working through. There are always grounds to criticize the government. I'm just wondering how they kind of position themselves against this particular budget. 

Childs: I'll be watching the labour relations to see how they come about dealing with the wage demands that I'm expecting most unions to make. We're looking at five, six per cent inflation. There are going to be wage asks in that ballpark. And where's that money going to come from? Are we going to see major labour disputes? 

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