REGINA -
At a time when other provinces are projecting deficits, the
Saskatchewan government has tabled a surplus budget with tax cuts and money for roads, hospitals and schools.
Finance Minister Rod Gantefoer's fiscal forecast for 2009-10 includes a cut in property taxes that will put money in the pockets of homeowners.
The savings vary widely from community to community, but the average household in Saskatoon will save about $100 a year. Homeowners in a rural resort community such as Katepwa could pocket as much as $1,333.
The Saskatchewan Party government boasts that the $103-million cut to the education portion of property taxes is the largest in the province's history.
"We're very pleased to be able to be in a position to bring forward a long-term, permanent solution to the issue that has dogged this province for decades," Gantefoer said Wednesday.
"It is a very challenging and difficult issue to deal with."
Gantefoer is projecting a surplus of $424.5 million for 2009-10 while keeping about $1.1 billion in a rainy-day fund.
Government revenue is expected to go up 13.8 per cent over last year's projection to $10.7 billion, but down a whopping $1.5 billion from the 2008-2009 third-quarter forecast.
Spending is also forecast to increase 12.4 per cent over last year to $10.2 billion, but down slightly over the third-quarter projection.
"These tremendously turbulent times are not something that is escaping Saskatchewan entirely," said Gantefoer.
"We certainly are not immune to the forces that are buffeting economies right around the world. We are optimistic in this province, but I think it's fair to say that we are also very cautious."
In recent years, Saskatchewan has relied on oil and gas revenues to fill its coffers. But with energy prices in the tank compared to last year - oil revenues are pegged to be down $915.7 million - it's potash that is bringing in the bucks now.
Revenue from the pink mineral used to make fertilizer is forecast to be $1.9 billion in 2009-10 - an increase of $427.2 million over last year. In fact, it's the largest revenue line on the books.
"If anything has kept me awake nights more than potash, I'm not sure what it is. But I've wondered and I've worried to make sure that our assumptions are valid," said Gantefoer.
"We are very, very confident that our cautious numbers that we've used are appropriate."
The finance minister admitted the government could be vulnerable to a deficit if potash prices fall the way oil prices did.
"Certainly if the numbers tank ... that would be very significant because the number that we're using, even with these cautious numbers, is in the order of $1.9 billion. If they disappear, our surplus is only in excess of $400 million," he said.
"But I would be absolutely shocked if they diminish with any significance at all."
The relatively rosy picture put forward by Saskatchewan contrasts sharply with many other provinces.
In its budget Tuesday, the New Brunswick government axed 700 civil service jobs, cut programs and deepened its debt by close to $1 billion.
Ontario's budget is to be tabled March 26 and is expected to show a deficit around $18 billion over two years. Even energy-rich Alberta is projecting its first deficit in 15 years when its budget is delivered next month.
Saskatchewan Premier Brad Wall said there are big differences between the provinces.
"We had continued economic growth first of all and that growth translates into more money in retail sales, more PST revenue, more income tax revenue," Wall said after the budget was unveiled.
"Also what's different about Saskatchewan is that we're the Saudi Arabia of potash at a time when potash is still a very strong commodity."
Allan Earle, president of the Saskatchewan Urban Municipalities Association was "thrilled" that taxpayers will see some relief, but school divisions were apprehensive in their reaction to the taxation changes.
"This thing is such major a change and so big (that) it'll take us time to assess it," said Roy Challis, president of the Saskatchewan School Boards Association.
"The initial concern is that there is a loss of decision-making power because we don't have control of the money."
The Opposition NDP was quick to criticize the budget, saying spending is out of control and relies too heavily on potash revenue.
"Bottom line, shaky economic and revenue assumptions plus run away spending equals a potential fiscal train wreck," said NDP finance critic Harry Van Mulligen.
