Saskatchewan sees $873M in unbudgeted revenue from high energy prices

TIM COOK

REGINA (CP) - The Saskatchewan government has $873 million in extra money to spend this year, as high energy prices have swelled the public purse.

A mid-year fiscal update released by NDP Finance Minister Harry Van Mulligen on Wednesday shows the province is making more than two-thirds of its revenue surplus - nearly $625 million - from oil and gas alone. But Van Mulligen said his government will not use the money for tax cuts, something the federal government did when it announced a massive budgetary surplus earlier this week.

Instead he said the money will be spent on health care, agriculture, more police officers and a program to provide relief from high home heating bills this winter.

"Saskatchewan, like Alberta, is subject to very volatile resource revenues," Van Mulligen said.

"I want greater predictability in terms of our revenues before I can start to entertain ideas about permanent, long-lasting, ongoing, reductions in revenues because of changes in taxes.

"I don't want to be in a position again of lowering taxes today, increasing taxes tomorrow. I think that is difficult for a government politically."

The stance drew fire from the Opposition, which accused the government of putting politics before people.

"When you have the highest taxes in the country, pretty well across the board, you can't continue like that," said Saskatchewan Party finance critic Ken Cheveldayoff.

"Something has to be done. If not now with . . . a government swimming in cash, then when?"

The lion's share of the extra money - more than $200 million - will go to health care, including $100 million to kick-start the development of a new health sciences centre at the University of Saskatchewan in Saskatoon.

The province is also spending nearly $160 million to fully fund its portion of the Canadian Agriculture Income Stabilization farm relief program for this year and last.

The program is a sticky point for the government with farmers not knowing whether the province will come up with its share of the money year after year.

Program costs are shared between the federal government and the province 60-40, but Saskatchewan maintains that the formula puts it at a disadvantage because of its large agriculture sector.

Home heating relief this winter will cost the government nearly $140 million, with most being used to put a 10-per-cent cap on a rate increase at the publicly run natural gas company.

"We're not ignoring people's pocket-book issues," Van Mulligen said of the plan which was announced late last month.

Nearly $60 million will be spent on improving northern roads, while $900,000 is being budgeted to hire 21 new police officers to fulfill a commitment that the government made back in 1999.

About $76 million is going to permanent debt relief.

Even with the extra spending, the government still has a surplus of about $135 million.

The province has faced pressure over tax reductions for years.

Of particular concern is the education portion of property tax bills which can be disproportionately high in rural areas.

Last year the government budgeted $110 million to provide property tax relief over two years, but the reduction was dismissed as nominal by critics.

Provincial Liberal Leader David Karwacki, whose party does not hold a seat in the legislature, said the government should have targeted at least some of its revenue windfall to that file.

Source (http://www.macleans.ca/topstories/politics/news/shownews.jsp?content=n111667A)


I agree with the government's thoughts on not lowing taxes. They say that we have some of the highest taxes in Canada, but on the other hand we have one of the lowest overall costs of living in Canada. It is very true that lowering taxes because of a resource surplus is a bad idea... what happens if the prices crash (I know it's unlikely in the immediate future)... we would have lower taxes, but all of a sudden be accumulating debt again. I would prefer us to keep paying down the debt, and once it is pretty much paid off (if we get to that point), then lower taxes.

Overall it's great news for Saskatchewan :D I'm curious to know what Saskatchewan's debt is though. I was looking, but couldn't find a figure.

well it's no where near Alberta's $8B, but i'll take it! :cheers:

^^Exactly my thoughts. Although I would like to see some more cash allocated to university tuition assistance. :tongue2:

They should have been more agressive on debt reduction (which is currently $11.3 billion). We pay almost $600 million a year in interest charges. We should pare that down some, freeing up the cash for whatever. I liked the Romanow plan of putting 1/3 of all surplusses to debt reduction, 1/3 to tax relief and 1/3 to programs.

They should suck it up and pay to fix/replace the Victoria Bridge too. The $20 some million required is just pocket change.

They should also finally twin the complete TCH from AB to MB and twin from Saskatoon to AB on the Yellowhead. They should make it 4 lanes from Regina to the US border. Good transport is very important especially in a export driven economy like Sask.
BTW, $873 is damn good when you consider that Sask has less than one third AB population. Comparativly thats like SK have nearly a $3billion surplus.

/\ That's already planned and budgeted for.

Which one or all three?
Any idea on construction starting/finishing dates?

The TCH and the Yellowhead. I believe 2007 is the planned completion date for the YH. If I get some energy I'll seek out specifics later.

Here we go... (http://www.infrastructure.gc.ca/csif/publication/newsreleases/2003/20030305regina_e.shtml)

Highway 1

Highway 1, the Trans-Canada Highway, is the primary east-west corridor through Saskatchewan and is a component of the National Highway System. The Trans-Canada Highway crosses Saskatchewan in its southern portion, linking communities such as Regina, Moose Jaw and Swift Current. The highway services both inter-provincial and international traffic, commercial trucks, tourist vehicles and commuter traffic. The current project will complete the twinning of the Trans-Canada Highway from Manitoba to Alberta by finishing the remaining two-lane components of the highway: a 135-km section between the Manitoba border and Wolseley; and a 38-km section between Tompkins and Highway 21. Work on the section between Manitoba and Wolseley will be completed by 2007, while the twinning of the section between Tompkins and Highway 21 will be completed in 2003.

Highway 16

Highway 16, also known as the Trans-Canada Yellowhead Highway, is the northern east-west transportation corridor across Western Canada and is also part of the National Highway System. It passes through the communities of Yorkton, Saskatoon, North Battleford and Lloydminster. The majority of the highway between Saskatoon and the Alberta border is a four-lane, divided roadway, with the exception of a 73-km section between North Battleford and Maidstone. Today's announcement will help twin this section of highway by 2007.

Highway 39

Highway 39 is Saskatchewan's primary north-south export highway and is a component of the National Highway System. The highway accommodates the vast majority of Saskatchewan's international traffic through North Portal, which is among Canada's busiest. Approximately $6 billion in trade and 100,000 trucks use the North Portal crossing each year. The project will rehabilitate segments of the highway between Weyburn and the US Border to ensure the consistent movement of people and freight between Canada and US. The project will be completed by 2007.

That's good, I knew they already started twinning the remaining section to the MB border, they should also twin Highway 6 from Regina to the US border tho.. I'd assume that's a pretty busy stretch of road, its shameful and dangerous to have it as a 2 lane

That is good, thanks for the info.

BTW, I hope this new found money and brighter outlook for Sask. will help to lure some of the people who left for AB, BC, ON back to your beautiful home province.

I'm sure some people will retun, (a lot already do when they hit their 40's and 50's) but we still lack a dynamic urban center. Saskatoon is trying, but not there yet. I don't know Regina enough to comment.

I'm sure some people will retun, (a lot already do when they hit their 40's and 50's) but we still lack a dynamic urban center. Saskatoon is trying, but not there yet. I don't know Regina enough to comment.

Regina is mainly a government city... most of the big buildings are government ones... SGI, Saskpower, Sasktel, Government of Canada, etc... And the other large buildings are the banks. Not too much else at the moment.