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It will be interesting to see how the Saskatchewan government and Finance Minister Ken Krawetz handle the upcoming provincial budget, the first one that provides any indication of a downward trend following eight years of upward mobility.
How many of the inevitable cuts will be foisted on the municipal governments with their limited capacity to raise revenues?
With the federal government kicking their own budget down the road to April, Saskatchewan鈥檚 governing group will be left wandering and wondering in the dark in terms of national revenue sharing. So the fed鈥檚 move is not helpful.
That means Brad Wall and his counterparts may be forced into making tough decisions, ones they鈥檝e never had to contemplate before.
Last year the PST sharing formula that was applauded as being a fine vehicle to ensure stable revenue directed from the province to the municipal governments, was being 鈥渢weaked鈥� a bit.听 What that really meant, was that the cities, towns and rural municipalities didn鈥檛 get as much as they had the year before. But there were promises that this lost revenue would be restored and improved upon this fiscal year, so there wasn鈥檛 much of a hue and cry coming from civic administration offices.听
Now we wonder if that revenue restoration and improvement is going to happen.
With the price of oil sliding to less than $50 a barrel, and no sign from OPEC鈥檚 leadership in Saudi Arabia of any impending volume control to ease that downward pressure, we can assume we鈥檒l be living with sub-$50 or $60 oil for some time to come.
That鈥檚 one of the crosses to bear when the commodities and the money they bring in, are controlled from elsewhere.
While Saskatchewan will be a bit better off than Alberta, on the oil file, it is a well chronicled fact, we have no backup bank account or plan to rely on to see us through the upcoming economic maze.
With a convoluted potash royalty/tax/capital relief regime in place, dependence on that resource for financial security is a mug鈥檚 game.
Uranium production will provide a small relief, but it seems as if Saskatchewan and its government will, once again, have to turn towards the good old reliable agricultural community to bail it out.
The face of agriculture has changed dramatically over the past 10 years, but its importance to our economic well being, it seems, will be more pronounced than ever before.
It seems as if Wall and his team will have to cash in some of those good will chips they have piled up in council chambers around the province over the past eight years. It will be especially interesting if they find it necessary to pull back some of the economic advantages they have provided for the agriculture sector, since this is going to be the only resource-based industry that will have the wherewithal to perhaps enjoy a banner year. Will the provincial government want to pull the financial plug on them?
It will be interesting to see where the cuts will come and where the good will inventory will be tested.
This year鈥檚 budget details might be the most fascinating we鈥檝e seen in the past 10 years. It probably will be far from being the best, but it will be interesting as to where it will go to relieve the financial pressure that is quickly building.
