$4B irrigation 'megaproject' a risky proposition, says Canadian Taxpayers Federation

Saskatchewan taxpayers and future generations should not be saddled with a $4-billion debt for an irrigation plan that may or may not work, says the Canadian Taxpayers Federation.

"We've seen megaprojects go sideways in the past," CTF Prairie director Todd MacKay said. "Politicians and bureaucrats don't always pay the price if there's a mistake."

The provincial government announced the irrigation plan last week — the largest single project in Saskatchewan history.

Officials said it could create 2,500  jobs during construction and up to $80 billion in economic benefits over the next 50 years. Officials say it would allow farmers to grow vegetables and other high value crops, spark development of a processing industry and provide water security for Regina, Moose Jaw and elsewhere.

Work is set to begin immediately and take about 10 years to complete.

"This project will be a massive step in completing the goals our government has set out in our 2030 Growth Plan," Premier Scott Moe said in a government news release.

MacKay isn't optimistic. He said government megaprojects can run far over budget or fail to live up to their initial promise. He said Regina's Global Transportation Hub and the plan to expand the Saskatchewan potato industry, known as Spudco, should serve as warnings

"I don't think it's hard to find projects governments have embarked upon in the past with tremendous projections but much less rosy results," he said.

SPUDCO and the GTH cost taxpayers tens of millions of dollars with little return, MacKay said, noting that's a lot of money but it's not even close to the $4 billion proposed for irrigation.

For the irrigation plan, he said a more accurate comparison is the Muskrat Falls hydro project in Newfoundland. Its initial budget has doubled to nearly $12 billion, and the work is not yet done.

"We've got to be careful. There is risk here," he said.

MacKay said he's already worried about the billions of new government debt due to the COVID-19 pandemic. He said taxpayers are already paying hundreds of millions in interest charges every year. Another $4 billion or more will make things even worse, he said.

"It's concerning to see this much money going out for anything right now, especially given that it's being borrowed. It's going to take a long time to pay back the money we're already borrowing," he said.

MacKay said if the project is such a great idea, the private sector should foot at least part of the bill.

"If there's a problem, then taxpayers aren't the only ones taking a risk," he said.

"That's where its really good to have folks with skin in the game. They've got their own money at play and so they are very diligent about making sure it turns out."