'A boring budget': Experts weigh in on the political, economic impacts of the Sask. budget
REGINA -- Two Saskatchewan university professors feel the provincial government stuck to its identity, both economically and politically, in this year's budget.
Jason Childs, an economics professor at the University of Regina, said this budget did not surprise him.
"This is a boring budget," Childs said, in an interview with CTV Regina Morning Live. "It's nothing new, there's no major changes in direction, the spending priorities remain the same, the approach to generating revenue remains the same."
"Boring is generally good when it comes to budgets and finance. When things are exciting, that's usually when things are going wrong."
The Government of Saskatchewan forecasts a $2.6 billion deficit for the fiscal year, with further deficits expected through 2024-25.
The budget includes $17.1 billion in expense for 2021-22, including record spending on both health and education. Childs says the province is relying on a return to normal spending behaviours to ensure it meets its revenue goals.
"There's not a lot of room for error in this," Childs said. "It's an expectation that we're going to return to the way things were in terms of the government's ability to generate revenue from sales taxes from royalties and other sources."
Jim Farney, a political science professor at the University of Regina, said even with a rise in spending, this budget kept the Sask. Party government's priorities consistent with what has been seen in the past.
"I'm surprised how in keeping with almost everything we've seen from the Sask. Party government, this is. It settles on a vision of Saskatchewan as kind of a low tax internationally exporting place to invest and then builds the rest of the budget around that," Jim Farney, a political science professor at the University of Regina, said.
Despite some "shocks" around COVID-19 related spending, Farney said this budget still aligns with the government's 10-year growth plan.
"The U.S., the U.K., we're expecting the federal budget, are all radically adjusting to COVID and changing things. That's not the case here."
While the increased spending and large deficit could be seen as uncharacteristic of a conservative government, Farney said that is not actually the case here.
"There are bumps for education, there are bumps for health care that were smaller, but they're actually not massive if you think about the natural rate of inflation in those areas," Farney said.
"The deficit number is big, but if you put it as a percentage of GDP, its small compared to what other provinces are doing and small compared to what the federal government did last year, and what we're expecting this year."
Although the budget does show an increase in social spending, Farney does not expect that to sway any voters to or away from the Sask. Party.
"For the NDP folks, there's nothing attractive there because there's really no big new programs. There's some interesting stuff around the edge, with the technology tax rebate for example, but there's nothing that's like 'we're reaching out and delivering new social programs,'" Farney said.
"For the Sask. Party supporters, the important thing is that taxes stayed low. I think a lot of those folks are worried about debt too, but the primary motivation I suspect is a favourable climate for business and that means low taxes."
Due to the province's carrying capacity and debt capacity, Childs said this budget is fairly realistic. However, he added the province needs to get out of its deficit eventually, to avoid extra debt carrying costs.
"We don't need to run around like our hair's on fire in order to get out of that deficit hold," Childs said. "At the same time, it is important that we get out of the deficit in a reasonable period of time so we don’t run up extra debt and run up that debt carrying costs."
The province's record education spending is leaning on a $12 million increase in revenue, generated from higher property taxes. Childs expects more "tinkering around the edges" like this rather than major tax changes moving forward, as long Saskatchewan does not run into any major issues.
The province's GDP is expected to grow 3.4 per cent this year, which Childs says is a result of relatively strong exports.