Sask. government drains $300M just-in-case money, projected revenue down
CBC News | Posted: November 29, 2017 4:31 PM | Last Updated: November 29, 2017
Projected revenue down $53 million from initial budget forecast
The Saskatchewan government admits it will not find $250 million in savings this year by asking public sector workers to take a 3.5 per cent cut to their compensation.
The plan for pay reductions was inserted into the budget before public employees' bargaining began.
However, when public sector employees pushed back, the government had to dip into its $300-million contingency fund in the first quarter, using about $165 million. It now plans to drain the fund.
"Right now, we're not even remotely close in savings, which is why I'm acknowledging in the forecast that we may not get any of it," said Finance Minister Donna Harpauer on Wednesday.
"The compensation of the $250 million is still the number that we're going to be looking forward in the out years."
The government is still asking its employers to tighten their belts in order to achieve its three-year plan of delivering a balanced budget in 2019-20.
"We're still obviously going to be looking in restraints to compensation — compensation is over $7 billion dollars in our budget, so it's significant," she said.
Harpauer stated layoffs would be a last resort.
NDP finance critic Cathy Sproule accused the government of not making progress on bringing down the province's deficit.
"That is kind of predictable, when we know $250 of that $300 million was identified for a 3.5 per cent cut for public servants, so I think we could have all called that when the budget came down in March."
Now, halfway through the fiscal year, the entire $300 million is gone and the government has brought in less revenue than it had projected at budget time.
Down $53 million
The province had forecasted revenues of $14.17 billion but the mid-year update pegs the number at closer to $14.1 billion — a decrease of $53 million.
The lower number is due to a decline in revenue from taxation and non-renewable resources.
The decline in tax revenue comes after the province raised the provincial sales tax to six per cent and applied it to other services previously exempt, such as restaurant meals and construction services.
By mid-year, the government's forecast for taxation decreased by $181 million. It had projected to bring in $900 million through the fiscal year.
The deficit has gone down to $679 million from the $685 million projected at budget time.
However, increased revenues from other revenue streams were enough to soften the blow, such as a $20-million increase in revenue from the fuel tax.