PHOTOS: I’m sick of this shifty eyed shot of Saskatchewan Premier Brad Wall too, by photographer Daniel Paquet, but it’s the only decent royalty free photo of the guy I can find. Below top and bottom: Jason Kenney and Brian Jean, two Alberta Conservatives who used to have nothing bad to say about Mr. Wall. What will they say now that he’s raised Saskatchewan’s sales tax to 6 per cent? (Answer: Very little.) Below middle: Federal Finance Minister Bill Morneau.
You have to admit it was sort of clever of Brad Wall to try to sneak his sales tax increase and the rest of his mean-spirited Saskatchewan provincial budget in under the cover of the federal Liberals’ national budgeting effort yesterday.
Too bad federal Liberal Finance Minister Bill Morneau’s budget was so bland that news media focused on how meaningless the measures in it were, and how long they’ll take to be put into action. In other words: It’s likely to be more boring medium term than paying attention to just how unhelpful Wildrose-style austerity turns out to be in Saskatchewan.
But I suspect Mr. Wall’s audience is no longer really in Saskatchewan, anyway, but in other provinces where he still enjoys the adoration of hard-core ideological right-wingers and in the boardrooms of Calgary and Toronto where he just might want to score some comfortable future “corporate governance” gigs.
Like Alberta’s conservatives, Mr. Wall had an easy time governing for ages thanks to the oil royalty cash that flowed into his conservative government’s coffers in sufficient volume to ameliorate any need for genuinely hard choices or broadly unpopular policies.
He could talk tough about deficits and austerity while delivering pretty much the kind of social democracy folks in Saskatchewan wanted without too much pain. He could afford to pick the odd easy-to-win political fight to look tough by, say, passing unconstitutional labour laws. Hence his vaunted popularity.
But those days are now gone and, one suspects, Mr. Wall be gone soon too.
After all, it’s easy to get used to having your posterior kissed. Not so easy to put up with having it kicked by folks who used to kiss it! So stand by for a search for a brave Saskatchewan politician willing to step up and play Don Getty to Mr. Wall’s Peter Lougheed, or Ed Stelmach to his Ralph Klein, now that the Saskatchewan balance sheet’s not so sweet.
How mean-spirited is this Saskatchewan budget? Pretty mean-spirited.
It’s a classic neoliberal austerity budget with tax cuts that benefit the wealthy and corporations and a tax rise in the form of a 1-percentage-point increase in Saskatchewan’s sales tax, to 6 per cent, that will hit everyone else. Give Finance Minister Kevin Doherty credit, though, at least he didn’t disguise it is a “user fee.”
However, it’s really more than a 1-per-cent increase, since it’ll cover a whole range of previously exempt items and services. (Note to Alberta Conservatives who still love Brad Wall: If this province had a 6-per-cent sales tax like Saskatchewan’s, we could eliminate the deficit you’ve been screaming about at a stroke.)
Like the decision to shut down the Saskatchewan Transportation Co., leaving the rural poor and many First Nations communities overcharged, neglected or just ignored by the private sector, the library cuts will cost Saskatchewan more in the long term. The former will ultimately mean higher health-care costs, the latter more that must be spent on law-enforcement.
But who cares? Or so the Sask. Party must have reckoned. After all, Margaret Atwood lives in Toronto and she’s unlikely to subject Mr. Wall to the full Ford Bros. intellectual slapdown. And if a neoliberal can’t kick the poor to prove he’s tough, who can he kick?
Still, this leaves right-wing Alberta party leaders like the Wildrose Party’s Brian Jean and the Progressive Conservatives’ newly elected Jason Kenney, both of whom have praised Mr. Wall fulsomely, in an interesting position. Do they continue to laud him as “the real leader of Western Canada” (Mr. Kenney’s words), red meat to their angry base, or do they find another real leader now that Mr. Wall can’t score easy points any more?
It certainly does no harm to Premier Rachel Notley’s NDP to be able to demonstrate where the policies of the hero of Alberta’s conservatives are likely to get us: higher unemployment, a further depressed economy, a net outflow of residents and higher taxes for most of us to boot. Plus serious damage to the effort to build another pipeline to the West Coast.
Whatever they say, you can count on it that Alberta’s Opposition parties, just like the NDP, have been praying for higher oil prices – just on a schedule that maximizes the political benefit for them.
As for all those Albertans who are supposedly “long gone for Saskatchewan,” let’s just wait a few weeks. What do you want to bet the roads around here are soon once again clogged with badly driven pickup trucks sporting green-and-white economic refugee licence plates?
Who will Jason Kenney blame then?
This post also appears on Rabble.ca.
“If this province had a 6-per-cent sales tax like Saskatchewan’s, we could eliminate the deficit you’ve been screaming about at a stroke.)”
another nonsense. i can understand right, pushing now for implementation of PST in Alberta, which will be suicidal move for existent government and will benefit the followed but from you…
how many provinces across Canada do you know, where exist PST but absent debt?
Your argument seems to be that with a PST governments would spend more. You might be right. But that is not an effective riposte to my point, which simply relies on Trevor Tombe’s arithmetic, and he’s a professional economist. You’re also right about the politically suicidal risk associated with introducing a PST in Alberta, which is why none of the Wildrose, Progressive Conservative or New Democratic parties will contemplate it. But the fact remains, we will remain on the “resource royalty rollercoaster” until someone has the courage to implement a sales tax, or enact some other measure that will ensure a steady flow of revenue. This is why virtually all jurisdictions in the world, regardless of ideology, have sales taxes. Even Texas. DJC
once again, i cannot agree with you.
prosperity and sustainability of society depends in first place on availability and quantity of value-added/profitable enterprises. and doesn’t matter crown/public or private they are. the taxation works only in conditions when you have from whom collect the tax.
in our particular case (Alberta), instead of handing out money in rebates, doubtful “green researches” and funds for private enterprises, more sense could be to invest in creation of profitable public (or even mixed ownership) enterprises, profit of which, for time being, will go toward paying off the debt and employed (taxable) folk will pay into budget for services and infrastructure.
there even one more advantage of such policy, economists, politicians and media do not like to talk about – it’s a social responsibility. in tough times, when profitability slid to 0, private sector at first takes look into options to move from red, by shrinking/moving off shore operational cost. if it won’t help, it closes the door, passing all resulting cost on shoulders of society.
public own enterprise even in such circumstances remains viable and beneficial for society as long as can keep head up over water till better times.
back in 1975 there was good attempt, albeit on federal level.
where now Petro Canada and how we benefit from it and where StatOil (established about same time, 1972) and how norwegians benefit from it.
Texas has no state income tax. Nor does is it earn much in the way of mineral royalties as most land is freehold, unlike AB where the Province owns most of the mineral rights. Texas is a great example of a jurisdiction that diversified its economy through business friendly measures like low taxes, light regulation and Right to Work. Dallas and Houston are two of the leading corporate centres in the US, by some measures right behind NYC in terms of head offices. Dallas in particular has diversified away from O&G into areas like telecom and transportation.
Texas is a dystopia.
In other words, it is a RWNJ’s wet dream.
“how many provinces across Canada do you know, where exist PST but absent debt?”
You make a false analogy. Pretty much all of them could eliminate their debt if they increased their provincial sales tax by 6%, which would be the same thing as Alberta introducing one.
you’re genius, albeit unofficial.
tell it to resident of Ont, BC, Man, Que, NS, etc. that for an ultimate economic prosperity and fulfilled happiness they need to rise their PST to range 12~16%, depending on present.
in this perspective, 6% for Alberta seems like very good bargain.
one question only came to mind – how much rise of PST in Alberta we must expect to solve next deficit?
and then another one.
you know, first step most hard one. after – much easier, just like an avalanche
Not content to reflexively emit pidgin ideological rubbish, you take the “slippery slope” fallacy and turn it into an avalanche. Well played.
I think despite all the distractions in the news in Ottawa and elsewhere, the people of Saskatchewan didn’t miss the changes to their provincial sales tax, including the increase to 6% from 5% and the reduction of PST exemptions.
I don’t follow Saskatchewan politics closely, but I don’t recall him promising that increase in the last provincial election, which was actually not that long ago. It will be interesting to see what happens to his popularity over the next year or so now the Wall easy boom years are over in Saskatchewan and they are facing hard choices. He doesn’t need to look too far away to see what happened to a provincial government that raised the PST shortly after it was reelected. The example is right next door in Manitoba so I am sure Wall is well aware of it, which leads me to believe he may want to go before the next election so he can avoid the same fate.
In the meantime, hopefully at least Albertans will be getting fewer lectures from him about not raising taxes in the future. It may suspiciously become much quieter on the eastern front.
I may be wrong, but didn’t Brad Wall already announce during his most recent election that this would be his last term in office?
Dave one thing you missed is personal and corporate income tax are each being reduced by 1/2% on July 2017. I believe this will make Saskatchewan’s corporate tax one of the lowest in Canada. Most economists point out that a value added tax is much more efficient and less economically damaging than income taxes. In Norway, the supposed socialist paradise of the world corporate tax is 27% and the VAT over 20%. I realize I will get told that the corporations should be the ones that are taxed but when it comes to the majority of government services like education and health it is the citizen receiving the service. Undoubtably corporations benefit from a healthy educated populace and sound infrastructure for transportation of goods and knowledge but somebody has to risk the capital to create the jobs to pay the taxes.
One other thought I see Premier Notley is blasting Brad Wall on the tax changes, I can’t see that his increases are much different than Premier Notley’s imposition of the carbon tax. At least in Saskatchewan the tax increases will reduce the size of the debt, all the carbon tax does in Alberta is increase the size of government with nothing going towards the debt.
If it was just an increase in the PST, that would not be half bad.
It’s slashing libraries across the province, cutting all kinds of credits that largely hurt vulnerable people, it’s closing the Northern Teacher Education Program – NORTEP – a 40 year old Indigenous post-secondary institution in Northern Saskatchewan that trains northern teachers who STAY in the north. It’s cutting funding for hearing aids, funerals for welfare recipients, it’s cutting a 10 million dollar grant program for the City of Saskatoon with NO DISCUSSION AT ALL. It’s killing the Saskatchewan Transportation Company, a crown corporation, a public service, providing rural Saskatchewan with public transportation for 71 years. And the corporate sector gets a tax DECREASE!!! All this was done with not a word of any of it during the election held less than one year ago.
A tax increase pales in comparison, believe me. They will try to sell our crowns. They had no mandate for any of this.
I see scant evidence that people in Saskatchewan make much use of the library.
Voters in Saskatchewan should stop electing neo-conservatives who are beholding to the fossil fuel industry instead of the people.
Enjoy your mean-spirited austerity budget Brad. We’ll see who comes out of this economic slump first Alberta or Saskatchewan. I’m betting on Alberta and Rachel Notley.
Delusional…Wall, Kenney/Jean, Fraser Institute, CTF, CFIB, et al… Paul Krugman’s done some of the best writing on these propagandists making their delusional claims for cutting spending as the optimal response to deal with deficits during recessions/depressions.
Here…on the fallacies and counterproductive economic outcomes vs. RW/conservative’s claims for benefits from austerity…one of the best treatments of the topic, for non-economists.
excerpt: Since the global turn to austerity in 2010, every country that introduced significant austerity has seen its economy suffer, with the depth of the suffering closely related to the harshness of the austerity. In late 2012, the IMF’s chief economist, Olivier Blanchard, went so far as to issue what amounted to a mea culpa: although his organisation never bought into the notion that austerity would actually boost economic growth, the IMF now believes that it massively understated the damage that spending cuts inflict on a weak economy.
Meanwhile, all of the economic research that allegedly supported the austerity push has been discredited. Widely touted statistical results were, it turned out, based on highly dubious assumptions and procedures – plus a few outright mistakes – and evaporated under closer scrutiny.
How come Ireland has emerged from the recession while Portugal, Span and Greece still struggle? The answer is austerity.
Ireland still isn’t back
Ireland remains, in some circles, a poster child for austerity’s success: It paid off its bailout loan early! It regained its 2007 Gross Nation Income per capita in 2014! Unemployment is only 8.9%! Don’t believe the hype.
Paul Krugman recently pointed out that Ireland’s employment performance continues to be dismal, especially in comparison with currency-devaluing, banker-prosecuting Iceland. Iceland’s employment now exceeds its pre-crisis peak by about 2.5% whereas Ireland is still, 8 years later, 8% below its peak. More specifically, Irish employment peaked in Q1 2008 at 2,160,681; in Q3 of 2015, the figure was still only 1,983,000.
In early 2016 Ireland emigration was still exporting it’s unemployment…
There’s more examples of the hype about Ireland’s austerity success! and that google thing can find more data like this, if you care to look.
If Ireland is doing well it’s because of tax inversion. This is a system whereby a US multinational moves its operations or HQ in order to pay less tax. This has been going on for over a decade. Ireland is a prime destination for this corporate shell game.
There is nothing magical about it and in the case of Ireland, it has nothing to do with austerity budgets.
Austerity budgets only contributes to lowering the standard of living for the poor and vulnerable while favouring the top one-percenters.
But you can’t run deficits forever. In Saskatchewan in 1991, Roy Romanow & finance minister Eric Cline were forced into deep austerity because THE PROVINCE WAS EFFECTIVELY BANKRUPT.
Brian Mulroney had to give off-the-books cash to Saskatchewan in order to prop it up. Bankers called the shots and austerity crushed Saskatchewan for a decade. This is what endless debt brings.
You’ll note that the financial crisis referenced by Jeff that was so bizarrely (and possibly illegally) resolved by Brian Mulroney’s federal government – http://bit.ly/2ofpxWl – was the result of financial mismanagement by the so-called Conservative Grant Divine Government.
Actually you can if so long as the deficits are offset by economic growth. A household budget is not like a governments.
Here’s an AB economist from the neoliberal – RW – side of economics on this very issue, in his treatment of AB’s budget… http://www.macleans.ca/economy/economicanalysis/alberta-needs-to-be-honest-with-itself-about-the-budget/
Fraser Institute, CTF, CFIB, etc… are anti-gov’t/democracy and pro-corporate propagandists, not economic experts.
Amazing how corporations finance a lot of their takeovers and expansions with debt, not just equity… but somehow debt is supposed to be a disease and moral depravity if gov’ts borrow. The most amazing propaganda win outside of climate denial.
Try to get Fraser Institute, CTF, CFIB, or any corporate executive you know to provide a refutation of this statement by Trevor Tombe. Again, Tombe is from the neoliberal (aka market fundamentalist side of economics, beloved by all conservatives, RWrs) here: Alberta’s fiscal outlook
Government borrowing is not the same as household borrowing. What matters for sustainability is debt relative to the overall economy (the ultimate tax base for the government). Unlike households, economies have no clear end date, no retirement, and (typically) experience steady upward growth. And a growing economy can, in principle, sustain modest deficits indefinitely.
excerpt: First, Alberta’s growing debt, whether advisable or not, is entirely sustainable. There’s no fiscal disaster here, not even close.
Yes you can!
You are making a fundamental mistake of confusing macro economics with micro economics. This lack of understanding is exactly what conservatives exploit and use against us.
Repeat after me; household budgets are not the same as government budgets. The dynamics and the dependent variables and their effect on the outcomes are completely different.
I get that simpletons want to reduce all complex problems into easily manageable chunks so it is easier for them to understand, but in doing so they overlook very important aspects of difficult issues. What I resent is the conservatives using this lack of understanding among the population to advance their agenda, which of course has always been the same – make rich people and corporations richer at the expense of everyone else.
i can understand reason for such mantra from economists and politicians, sponsored by bankers and hedge funds but when it’s become like religion for masses, that’s become fearsome.
you can paint it any color you want but final outcome will be same – debt is a debt and must be paid out in sum greater, than was borrowed. doesn’t matter, personal, household, provincial or national.
I have question Athabascan, since we are all simpletons I am sure you can clear this up. When I get a loan the bank determines my ability to repay a loan based on my income or revenue. Provincially the debt to GDP ratio is always quoted not debt related to revenue. Alberta’s revenue is roughly 45 billion, Alberta’s GDP is roughly 326 billion. So Alberta’s debt including capital spending is roughly 15 billion or 33% of our revenue, isn’t that a much more realistic assessment than 4.5% of GDP? Isn’t our ability to make payments on our debt based on revenue?
Farmer B: 1) maybe if commenters like you started trying to do even a bit of research of the questions you pose, before! you actually pose them online, people wouldn’t get frustrated/exasperated with you and call you names.
2) in 3 minutes of Google searching a succinct summary of your question, it’s easy to find explanatory/educational posts from actual economics educators, like this fellow excerpted below. If you actually give a damn about understanding economic issues, how about you give this blog comment section a rest, an educate yourself before you keep posing questions that just make you look like garden variety market fundamentalist, many of who do in fact come off as simpletons. Economics, in many aspects, is in fact not rocket science.
re: debt to GDP or revenue: ‘Economists are interested in: How much debt is too much? Can the government bear the interest costs of the debt? It is much the same kind of question that a bank asks about an individual when making a loan to an individual. But there are important differences.
In doing this we are trying to compare the amount of debt to some measure of the government’s ability to make the payments. The debt-to-GDP measure is simply a percentage number using total debt outstanding as the numerator and the size of GDP as the denominator. We use GDP as a measure of the government’s ability to pay since a government’s income is taxes. The taxes that can be collected depend on the total of all economic activity. After all, you can’t collect taxes of $1 trillion from an economy of only $500 billion, but it’s easily plausible to collect $1 trillion in taxes from an economy of $15 trillion. The higher GDP is, the more it is assumed the government has an ability to collect taxes and pay the interest.
Hey Farmer B,
Stop posting your tediously ideological posturing and tendentious questions until you go ask Brad Wall’s gang about debt-to-GDP and why they’re worse than AB’s numbers…and then get back to us, eh?
But maybe you’re not on Twitter so you can’t see the graph Trevor Tombe’s put up showing SK screwing up by your metrics, compared to AB under NDP. From RBC data, BTW. A notable socialist bank.
excerpt: ‘ Trevor Tombe @trevortombe 3h3 hours ago
A comparison of net debt as % of GDP in AB and SK, including budget forecasts to 2019/20. #ableg #skpoli pic.twitter.com/3wXt7ZKruy
Thank you Farmer B for illustrating the exact point I made above.
You are using an example of micro economics to try and show the same principles apply to macro economics. That is clearly a fundamental error in the structure of your argument.
Household budgets are not the same as macro economics.
Sam, Trevor Tombe did have an interesting graph comparing net debt per person in both Alberta and Saskatchewan starting in the 2015-2016 year ending in 2019-2020. Alberta net debt starts at a 1000 dollar surplus and ends with a 10000 dollar net debt. Not bad in 5 years eh. But you are correct Sask. net debt per person will be higher in 2020 but is increasing at a much slower rate than Alberta. Interesting I said all that without insulting you, have a good day.
Brad Wall is a boor. Why on earth does he feel the need to comment on the another Provinces Government or finances? Why does he just mind his own business.
And now we have Kevin O’Leary do much the same. Hard to imagine him as leadership quality.
Because this makes Wall a hillbilly hero in Saskatchewan. As a province that was have not for so many years (see previous SK conservative governments) residents were finally happy and amused to be in a position of wealth with an arrogant leader who was eager to flaunt it.
Other info re: Saskatchewan’s budget include: “cuts to their farm fuel tax exemptions,ending their pastures program and selling their grain car fleet.”
The 3.25% targeted wage rollback and layoffs are a great start. Real leaders can make difficult decisions that risk being unpopular. That quality has been lacking in Canadian politics.
Yeah, I’m sure the 240 or so employees at STC who are losing their jobs are fine with Brad’s decision.
Let’s just fire or layoff all the public sector worker (except the politicians of course) and then the economy will be great.
IDIOTS, you don’t fix an economy by increasing the unemployment rate. Even a child would tell you that’s ass-backwards.
The ultimate in a necessary, but unpopular decision, will be the brave Alberta premier who brings in a sales tax. Doing so simply recognizes that, in order for Alberta to provide the same services as the other provinces, when there is reduced oil revenue coming in, Alberta needs to have the same level of taxation as the rest of the provinces.
The ultimate in gutless decisions, however, is to impose an austerity program on someone else. So Doug, what government programs are you personally prepared to forego as your part of the austerity program? This has to be something you actually use.
Good one Bob.
You hit the nail right on the head, and in doing so you have exposed the essence of right-wing ideology.
Right -wingers believe in austerity as long as they aren’t the ones being negatively affected.
The conservative movement represents the operationalization of an ideology that encourages selfishness and anti-social policies to benefit the rich and powerful.
Brad Wall eyeing the exit soon? Hardly. He’s not known to just walk away from anything challenging the province he represents. Especially with Trudeau’s upcoming mandatory Carbon Tax starting in 2018. The SK NDP haven’t had their convention yet to elect a new leader.
After reading this 2017 New Year’s interview, he’s committed to his 3rd term in office.
Whether he plans to run again in the 2020 election remains uncertain.
Yes, this 2017 budget is a tough pill to swallow. He’ll take a hit in his popularity.
We’ll get through it. We always do.
Exactly what challenges has he faced? If you read the main blog post (and if you have been present in the province during his reign) you would notice he has been on a cupcake walk for several years. The province was fully on cruise control when he first made power, yet he still managed to mess it up.
I lived in SK all my life Jack. Including the past NDP gov’ts under Romano & Calvert whom caused political issues with this province of their own. Devine was premier when I was a kid.
I’m referring to the same old challenges every Premier of every Province regardless of political stripes faces – Economy/Finances/Infrastructure/Healthcare/Population/Industry/Environment and so on…..including promoting/defending their province’s interests or needs with the Federal Gov’t of the day.
Mr. Wall can be accused of messing some things up, but not everything. If the Silly NDP was still in power, they’d be facing the same challenges. Economy & budget forecasts are like weather predictions. Nothing is ever 100% right.
This budget sucks, So did Romanow’s budgets in the early-mid 90’s. Stuff happens.
Wall’s “nice guy” mask has finally dropped. This budget reflects his true vision and his lack of empathy for those who struggle in his province. He got a few boos today when introduced at a public event. Saskatchewanites are awakening but it’s too late – they’ve been conned by the conservatives – again. I feel very, very sorry for the people. It’s going to be a difficult three years, especially when they compare their cruel cutbacks to Alberta’s entirely different approach to the same underlying economic problems. The people have been much too trusting of Wall and his cohorts – could be due to a rural innocence, a weakness in discernment. The price is high when the predator pounces.
This budget is even worse than the budgets of Grunt Devine and his henchmen and the consequenses will be far worse.
First off, increasing PST from 5% to 6% is a 20% increase (or an increase of 1 percentage point, not 1%).
Second, why doesn’t Saskatchewan have a blog like this?! The coverage of the deficit by media outside of Saskatchewan is laughable in that they seem fully unaware of how Saskatchewan got into the mess… while Brad Wall’s austerity budget is the wrong approach, the real story is the fifty other wrong approaches that made this necessary (hint: start with the GTH scandal, the carbon capture and storage debacle, or the millions of dollars spent fixing roads that see 5-10 cars per day).
Thanks for pointing this out, Jack. It’s been fixed. As always, I am grateful to my readers, who are also my editors. DJC
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