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Taxpayers federation urges creation of heritage fund in Sask.
The Canadian Press
Published Thursday, March 2, 2017 11:28AM CST
Last Updated Thursday, March 2, 2017 2:00PM CST
The Canadian Taxpayers Federation says Saskatchewan needs a heritage fund to set aside money from the next boom and soften the next bust.
The idea would be to save some cash for the future from non-renewable resources, such as potash or oil and gas, and use returns on the investment as income.
"I know it sounds like a crazy time to talk about this when the poor finance minister's searching his couch cushions for extra money to deal with the deficit," Todd MacKay, prairie director for the taxpayers federation, said Thursday.
"But the reality is we have to have a plan in place and there's never going to be a perfect time to do it."
The taxpayers federation says all non-renewable resource revenues in excess of $1.5 billion each year should be used to pay down debt. When the debt is paid, it says the money should go into a heritage fund.
Saskatchewan Premier Brad Wall talked about a heritage fund in 2012, but said it would only happen once the debt was fully paid.
The NDP proposed a heritage fund in the 2011 provincial election and criticized Wall's decision a year later to wait to start the fund.
MacKay said this plan is different because it sets a specific target for payments when non-renewable resource revenue is more than $1.5 billion each year instead of leaving that to the government's whim.
"In the past, when we had a lot of money, it was hard to imagine doing a heritage fund because you'd have to try to figure out how to do without some of that windfall," he said.
"It's better to plan what you're going to do with money in the future before you get that money; otherwise, who knows what kind of ideas will pop into people's heads."
MacKay points out that other places, such as Norway and Alaska, have built successful heritage funds.
The federation says if Saskatchewan had deposited all non-renewable resource revenues above $1.5 billion between 2005 and 2015, there could be $13 billion in a Saskatchewan heritage fund generating investment income of $652 million annually.
Public debt for the current fiscal year, which ends in March, is projected to hit $15.2 billion -- up from $14.8 billion when the budget was introduced last June.
Saskatchewan also has a $1.2-billion deficit -- up from a projected $434 million in the budget.
Wall has said tax revenue is lower than forecast and crop insurance claims are up $250 million because of a late harvest. The government is also trying to save money because of a big drop in revenue from oil and gas, potash and uranium.
The new budget is to be released March 22.
The government has mused that public workers could be forced to take unpaid days off as it wrestles with the deficit. Tax increases, wage rollbacks and layoffs in health care and education are also being considered.