BY Jim Harding
Retired Professor of Justice Studies,
University of Regina
There have been tongue-in-cheek phrases shared on coffee row and social media as Premier Wall’s support declined. “Up against the wall”, comes to mind. With Wall now leaving the premier’s job, it was “written on the wall” will now be in vogue.
But there is a very serious side to what happened under Wall’s premiership. The Wall government was careful not to table a budget until after it got re-elected in April 2016, and then in 2017 it gave us the real news. Simply put, they kept us in the dark, behind a “wall of deceit”.
Grass-root “Read-Ins” succeeded in rolling back the $4 million-dollar cut to libraries, but that was easy when the province’s net debt is on its way to $12 billion. Rural and northern communities have lost their public bus system (the STC), the Sask Party is now selling off low-income housing, and privatizing utilities is in the works.
In Vision 2020 and Beyond, Wall said “non-renewable revenue received by the province will continue to pay down the debt”, and Saskatchewan will become a “debt-free province.” Then “after the province’s debt has been fully retired, the government will establish the Saskatchewan Heritage Fund.” Vision 2020 and Beyond, reassured the people of Saskatchewan that “The purpose of growth is to build a better quality of life for all Saskatchewan people”?
Wall talked this way for years. In the 2011-12 budget, he coined his favourite slogan “defining the Saskatchewan advantage.” The 2012-13 budget talked of “maintaining lower debt and historic tax deductions.” The 2013-14 budget talked of balancing “growth with social progress” and the next two were about keeping Saskatchewan “on the path of steady growth”. And after living so long in “Next Year Country” many liked to hear all this up-beat bragging.
GROWTH, DEBT AND TAXES
So, what happened?
Certainly “growth” happened. From 2006, when the NDP was last in power, to 2014, the value of exported commodities more than doubled: from $16 to $36 billion. Even with the 2016 “bust” it remained $29 billion.
But what happened with the resource revenue that was to take us out of debt?
Budgets are largely political documents; Public Accounts tell a more truthful story. Provincial non-renewable revenue went from $1.7 to $2.3 billion from 2006-08, but then, even with the doubling value of exports, the revenue didn’t rise. Corporate-favouring royalties kept revenues around $2 billion-dollars right up to 2015-16, and then they dropped to $1.4 billion, which was lower than when the NDP was still in power.
The only exception was 2008-09, when this revenue rose to $4.1 billion, much of it from potash sales. But, the year after the global financial crash, this revenue dropped sharply to $1.4 billion.
So, what happened to Wall’s promise to retire the debt? While net debt did go down to $3.5 billion in 2009, it rose steadily after that. By 2016 it was larger ($7.9 billion) than it was when Wall was first elected, and it is now projected to be over $12 billion by 2018. So much for Wall’s extraction economy!
And what about Wall’s promise to reduce taxes? We know that, while corporate taxes went down in the 2017 budget, the sales tax went up. We have new taxes on insurance, including on supplementary healthcare. Small businesses are feeling it; we are all feeling it. But the revenue from the sales tax has been steadily rising all along; it went from $.99 billion in 2007 to $1.3 billion in 2016. And what about personal income tax? The amount of revenue here, too, also rose; from $1.9 billion in 2007 to $2.5 billion in 2016.
This contrasts with corporate taxes paid by companies. That revenue was lower than from either sales or income tax. It barely went over $1 billion in 2011 and then dropped to $.85 billion by 2015. It was just $1 billion in 2016, before the rate was cut to 11.5% in 2017. And the Wall government has announced that the corporate tax rate will be lowered further, to 11%, by 2019.
The resource boom was supposed to take the province out of debt and reduce taxes, but the opposite has happened. Neither resource revenue nor corporate tax revenue increased during the boom and now it is ordinary people that are expected to pay off the rising debt. And, to also endure severe cuts to environmental protection, education, health, and housing, while paying even more.
But there is more. To make the accumulating deficit and debt seem smaller, Wall has been selling off crownland at bargain basement prices. From 2008-16 the Sask Party government sold over $2 billion dollars of crownland. This is one-time money and these sales continue to erode the commons. And now there is Bill 40, which reneges on Wall’s promise to hold a referendum before any utilities are privatized. Selling up to 49% will also be one-time money, but the cost of privatized gas, power and communications would go up for us all. Again, we have to pay for the Sask Party’s pro-corporate legacy debt. And the province will forever lose this source of future revenue from the utilities.
In 2012 Premier Wall commissioned a report on “a permanent Saskatchewan Future’s Fund…to become a lasting source of wealth while stabilizing government use of these volatile resources.” The Sask Party government could have started socking away resource revenue earlier, e.g. in 2008, when it hit a record $4.1 billion. A Heritage Fund could have even helped Saskatchewan transition towards renewable energy, to lower its extremely high carbon footprint. During Wall’s “boom years” Saskatchewan surpassed Alberta as having the highest per capita carbon footprint; 68 tonnes per year, which is over three times the Canadian average.
But, no, Wall stubbornly stuck with coal-generated electricity, opposed carbon pricing, embraced bitumen pipelines, and even flirted with costly and toxic nuclear power. He has sunk billions into questionable carbon capture. His government was hit with hundreds of millions in unbudgeted costs from extreme flooding and mega-forest fires, linked to changing climate, which Wall ignores. He started an exorbitant bypass and global transportation infrastructure on borrowed money. He kept corporate royalties and taxes low during the good times and spent like crazy. And now the rest of us have to pay. And now he’s leaving, some might say “bailing”, so he doesn’t have to face the electorate in 2020.
NEO-LIBERAL BUBBLE BURSTS
What happened to Wall’s reassurance that “The purpose of growth is to build a better quality of life for all Saskatchewan people”?
People outside Saskatchewan may be wondering whether we became a gullible people. Rather than keeping our healthy prairie skepticism, did we start to believe what we wanted to hear? And was the small NDP opposition a bit hoodwinked by all the talk of being a resource-rich have-province? Did most everyone get pulled along by the neo-liberal myth of trickle-down wealth?
Wall likes to contrast himself positively with former NDP governments. But a similar scenario occurred during the Blakeney NDP years of resource expansion (1971-82). That government also spent all the non-renewable revenues it had socked away in its short-lived Heritage Fund. It, too, spent resource revenue to build the infrastructure for more extraction of toxic non-renewables, including for the uranium industry.
But one thing differed; the NDP did not leave the province with a huge debt. That came with Grant Devine’s Conservatives, which followed the Blakeney NDP, which the Romanow NDP had to address when it took power in 1991.
Wall worked with the Devine Conservatives, and even though he helped rebrand the Sask Party, the province has ended up in an even worse place. This time we not only have a fiscal debt but a huge energy and environmental one, which the next government will inherit. Wall’s cavalier politics has left our land, air and watersheds at greater risk. Anyone looking closely would have seen that the writing was on the Wall.
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