Tackling the Debt
I recently received a call from a constituent inquiring about the provincial debt. He had been in discussion with someone, and they had different opinions of what it might be. This conversation got me thinking that others may also be curious about our provincial debt.
Sometimes we think of deficit and debt as one and the same. A budget deficit is the difference between what a government spends and what it receives in revenue during a given time period. The public debt is the amount owed by the government to cover years of budget deficits and capital requirements in our crown corporations.
When the Saskatchewan Party government was first elected, it inherited a debt that was almost two generations old. Our government made the largest debt repayment, while making significant income tax cuts and the largest property tax cut in Saskatchewan history. Under our government, the provincial operating debt has been reduced by over $1 billion. This amounts to $1.5 billion in interest payment savings. These savings have been invested in people and a better quality of life for all in Saskatchewan.
In 2012, the Government of Saskatchewan released the Saskatchewan Plan for Growth: Vision 2020 and Beyond; a roadmap for the growth of our province in all economic sectors that prioritizes fiscal responsibility, needed infrastructure investments, and improved health and social supports.
The decline in resource revenue has required the government to realign tax revenue so as to reduce our reliance on resource revenue. Difficult decisions were made in the 2017-2018 budget. That said; in the province’s November mid-year financial report, the 2017-18 deficit projection is $679 million, $6 million less than last year’s budget estimate of $685 million. We are moving in the right direction and the economic forecast for the province is positive.
As in household budgeting, there are times when borrowing is a sound decision – so it is with the province.
- Investing in infrastructure supports the growth of the Province and secures a better quality of life for Saskatchewan people.
- By modernizing and expanding the tax base, controlling and reducing spending and investing in much needed infrastructure projects like highways, schools and hospitals, we will help ensure Saskatchewan’s economy remains strong.
- Current low interest rates, combined with the Province’s Aaa credit rating, and sound repayment plan make borrowing for the purposes of infrastructure cost-effective.
- Our borrowing is being managed responsibly as is evident by our best possible credit rating from one of the world’s leading credit rating agencies. Saskatchewan is one of only two provinces that have Aaa credit ratings with Moody’s.
In answer to the question asked of me, Saskatchewan’s public debt is projected to be $17.9 billion by March 31, 2018 – that includes $5.8 billion in operating debt, $2.8 billion in the SaskBuilds Plan, and $8.9 billion in Crown infrastructure debt. This is one of the lowest per-capita debts compared to every other Canadian province. Our province has the second-best debt to GDP ratio in Canada. We have continued to invest in Saskatchewan’s growth and, for the first time in two years, the economy is projected to post positive growth. Saskatchewan’s real GDP is forecast to grow and lead the nation this year and next. As our economy improves, our government will continue to look for ways to reduce our debt while investing in people to continue making this the best province in Canada to live, work and raise our families.