Sask. to shrink workforce by 1,250 to pay for Premier Moe's PST promise

The Saskatchewan government is posting a near $600 million deficit, along with a decline in spending and revenues in its latest budget update.

On Friday, the province releases its third quarter fiscal update for 2017-2018. 

It shows a projected $595-million deficit, higher than what was expected in its last update, but $101 million lower since the spending plan was  unveiled last spring. 

In a statement on Friday, Finance Minister Donna Harpauer said: "Our economy is performing well and is expected to post positive growth for the first time in two years.  We will meet our fiscal challenges by controlling spending and ensuring we do what we can to help keep our economy strong."

Revenues, expenses down

Both revenues and expenses are down since the mid-year update. 

Speaking to reporters Friday, Harpauer said the decrease in expenses— $273 million less than initially budgeted — will help cover the $65 million the government will miss out in revenue since Premier Scott Moe announced the reinstatement of exemptions for the provincial sales tax for premiums on health, life and agriculture insurance. 

The exemption will be retroactive to Aug. 1, 2017 — the date PST was applied to insurance. It was one of a number of PST-related changes in the provincial budget released March, 2017 under the leadership of former premier Brad Wall. 

The move to reinstate the exemption will also cost the government $120 million next budget— a change to be paid for through shrinking the workforce by five per cent through attrition. 

Five per cent reduction

According to a government spokesperson, that means 1,250 positions in ministries, agencies, and Crown corporations.

"We're going to be always looking for efficiencies within government, we've done that in the past where we had an exercised to look for efficiencies. Going forward, we're going to be doing the same."

"We should always be looking for efficiencies within government, there's always creep in adding more and more resources ...and duplication of services."

The opposition NDP blasted the move. 

"Here we have, again, a government who's looking to cut a thousand jobs in our crowns and in our executive services and these are services that people of Saskatchewan rely on, so our Crowns are doing OK, they're actually putting money into the coffers right now, and this is where they're looking to cut?  It doesn't make any sense," said deputy caucus chair and finance critic Cathy Sproule. 

The government's five per cent attrition goal goes along with the previously announced aim to cut overall public sector compensation by 3.5 per cent—a plan the government has acknowledged will not happen this budget year.  

In total, revenue has dropped $169 million since the mid-year update, for a total decrease of $222 million from the spring budget. 

Tough decisions ahead

Harpauer said the revenue drop largely had to an overestimation in personal income tax—which happened country-wide—saying that will be adjusted accordingly. 

However, non-renewable resource revenues are up $37 million. 

The province says oil and gas revenues are expected to rise $42 million, while potash royalties are projected to increase $22 million from the mid-year update. 

"It's very encouraging that the indicators are, we're forecasting growth --that is extremely encouraging but, you know, this is not going to be an easy budget that we're going into either, there's going to be tough decisions that need to be made," Harpauer said. 

The 2018-2019 budget will be unveiled April 10.