The Canadian Press
Saskatchewan residents will have to pay more for cigarettes and alcohol as the province raises taxes and prices in an effort to boost dwindling provincial coffers.
The measures were introduced Wednesday in a provincial budget that sees the government spend more than it takes in.
The government said it expects to collect $9.95 billion in revenue in the 2010-2011 fiscal year and spend $10.1 billion. That means that despite budget cuts the province must dip into its savings account to keep the books in the black.
But Finance Minister Rod Gantefoer said the government is “living within its means.”
“What we’ve done is tried to belt-tighten as best we can to get into a spending trajectory that is flat or negative and that I think is the responsible way to go,” he said.
“There isn’t a jurisdiction in the world that would seriously consider the kinds of devastation that would occur by trying to take 10 per cent out of the spending of the government in one fell swoop. It just isn’t responsible and it isn’t practical.”
The province needs to hold the line on spending and trim costs largely because of a plunge in potash revenue. The pink mineral used in fertilizer was expected to bring in $1.9 billion last year, but those numbers ended up in the red. The government was forced to pay back hundreds of millions to potash producers who overpaid royalties.
Gantefoer said people can argue about whether the estimate was appropriate.
“I don’t think people are paying for my ‘big mistake,”’ he said. “The reality is potash was not selling last year and if I predicted that accurately and said, ‘We’re going to end up with zero potash revenue or negative potash revenue last year in the budget,’ everyone would have said, ‘Have you lost your mind? Of course there’s going to be potash revenue.”’
The government estimates non-renewable resources will bring in about $2.1 billion in revenue this year. Of that, just $221 million is expected to come from potash while $1.1 billion is expected from oil.
Gantefoer said the province is trying to be more cautious so as not to repeat the potash misstep.
It is also drawing from its Growth and Financial Security Fund to offset its deficit in general revenue. The move will leave $510.8 million in the rainy-day account.
Opposition NDP Leader Dwain Lingenfelter argued the budget is unbalanced and irresponsible.
“If you’re income’s $50,000 a year and you spend $60,000, and you go to your kids’ bank account and take their $10,000 they have for university and say your books are balanced, they’ll call bullshit on you,” he said. “Your kids will — and we’re calling it on the government.”
Saskatchewan also hopes to raise $35.7 million by immediately hiking the tobacco tax by 2.7 cents a cigarette to 21 cents each. That will increase the cost of a package of 25 smokes by 67.5 cents. The province is also cutting to one from three the number of tax-free cartons First Nations people can buy on reserve.
The liquor markup, which kicks in April 1, is expected to bring in about $18 million and will increase the price for a dozen beer by 75 cents.
The province is also trimming costs by cutting civil service jobs by 15 per cent — about 1,800 positions — over four years. The equivalent of 528 full-time positions will go this year, mostly through retirements and by not filling vacancies.
Saskatchewan will also delay promised cuts to the education portion of property taxes, and municipalities have been told to wait until next year to see more revenue sharing.
It is eliminating coverage for chiropractic services, although low-income people will still get full coverage for up to 12 treatments a year. The move is expected to save $10.4 million annually.
The Saskatchewan Communications Network TV channel is being shut down to save money.
Lingenfelter said the Saskatchewan Party government has seen a 10 per cent revenue increase in each of the last three years and should have been able to make ends meet.
“If you can’t make your way on a 10 per cent increase when the rate of inflation is two or three, and you have to say, ‘We need a bunch of cuts because we don’t have enough income,’ there’s something wrong,” he said.
@page_break@“There’s something wrong with where all the money has gone.”
The Canadian Press