With an ever-growing deficit, Saskatchewanians should be anticipating hard times. What do we have to blame and what are the province’s options moving forward?
By now, it should be common knowledge that Saskatchewan’s economy isn’t looking too good at the moment. With government deficits running over a billion for the 2017 fiscal year, it’s safe to say that most Saskatchewanians aren’t too happy. As is usually the case in this type of situation, Brad Wall and the Saskatchewan Party are going to be all but lynch-mobbed once the 2017-18 provincial budget is tabled.
To be fair, Wall doesn’t have a lot of control over the global economy. He’s far from an innocent man in the downfall of Saskatchewan’s economic situation, but it’s not fair to put the blame squarely on him.
That’s not to say that the Saskatchewan Party isn’t a major contributor to our economic woes, however. If not for the former economy minister Bill Boyd selling us the false pretense of lavish resource riches for the foreseeable future, we might not be in this mess right now.
With that being said, ripping apart the government for its past missteps is not particularly helpful right now. We can’t put the toothpaste back in the tube. What we can do, however, is try to do something to take the edge off.
Cutting government spending, which is what the Saskatchewan Party wants to do, is probably the worst of its two options. Although it worked for Canada in the 1990s, the economy was strong at the time. With the economy as weak as it is now, spending cuts could actually hurt the economy by reducing growth.
Raising taxes isn’t much better. Depending on what you decide to tax, you can cause a decline in growth, which could actually result in a decrease in tax revenues. If we are indeed going into a recession, the drop in consumer spending — and, therefore, economic welfare — could be huge.
That leaves the private sector as our last hope to save the day. Naturally, the provincial government will have to borrow from them to help finance the deficit. Of course, we’ll have to pay them back at some point, even if it’s only just the interest on the loan, which means this is a stopgap measure, at best.
By now, all this depressing discussion on economic policy should make it clear that we are all inevitably going to suffer from the effects of the budget deficit and that there doesn’t seem to be much we can do about it.
Miraculous economic growth stimulated by the private sector would be our ultimate saviour, but no gambler would bet on that. What we really need is for the price of oil to increase, which is looking more and more like a crapshoot every day.
On one hand, OPEC is cutting production, which should boost the price of a barrel of light, sweet crude. On the other hand, that same production cut could open the door for the United States to boost production — a sure bet given that they’ve got a guy in charge who really wants to make America great again — which could undo all of that good work.
In the meantime, the most we can do is accept that we’re going to see some losses in welfare, public services and jobs.
Perhaps we can listen to some sad and emotional — but actually quite good — music from rising country music star Colter Wall as a catharsis for our misery, even if you think his dad is the one to blame for it.
Graphic: Lesia Karalash / Graphics Editor