The province of Saskatchewan will be heading into its last budget before the next general election, expected sometime in late 2015 or early 2016, depending on when the federal election is called.
Finance Minister Ken Krawetz will table his last budget sometime this spring as he announced his retirement from politics earlier in 2014.
Krawetz spoke to the Lloydminster Source earlier last week about the state of the budget process and where he see the province moving with the fall of oil prices.
“The economy of Saskatchewan is very diverse and very dynamic,” Krawetz said. “We saw in the last budgeting year (2013), that we had the largest agricultural harvest we have ever had.”
While the falling oil prices are something to be concerned about “Agriculture has had great years in the last few years. We also continue to increase exports,” he said.
Krawetz said that the mining sector and the forestry sector in the province are continuously going strong.
“Minerals like uranium, and potash, we are seeing some strong indicators in those sectors,” the finance minister said. “We are opening a new uranium mine, which will be producing uranium and increasing our production.”
Krawetz said that there is a bigger picture when it comes to the state of the economy outside of the oil price plunge.
“We, in the province, have a strong economy, but yes, we are going to face challenges because of falling prices in oil,” he said. “Those challenges also come back to this fiscal year, we had budgeted a barrel of oil at $94, and for the first six months it was over $100. But since October of 2014, it has been challenging times.”
Municipalities have voiced their concerns about comments Premier Brad Wall made earlier this month about the re-negotiation of the revenue sharing that the municipalities get from the province.
Krawetz said that while he understands their concerns, everything is on the table when it comes to expenses that the province controls.
“We are looking at sources of revenues first,” he said. “That is the thing that we have control on.
“Once we get a better understanding of what the potash industry is doing, what the oil industry is doing and what the manufacturing community (is doing).”
Krawetz said that all expenses will be looked at during this budgeting year.
“We have third parties that we provide grant money to, whether it be advanced education, or regional health authorities or school boards,” he said.
“Our goal is to recognize that we have priorities, we have looked at number of social services.” Those will still be priorities, according to Krawetz.
“But what amount of funding that they get is on the table,” he said.
Krawetz said all current formulas are on the table during this budget season.
“However, that doesn’t mean people should be panicking,” he added. “We understand that we have valid partnerships.”
While a potential loss of revenue is expected with the declining oil prices, Krawetz said that the province would look at potential tax increases if need be.
“Our position is that we believe that taxes need to be lowered,” he said. “I think that we are recognized for that.”
Krawetz said that since the Saskatchewan Party – under Premier Brad Wall – took over, the PST and education tax have either stayed the same or been lowered.
“(Is a) tax increase completely out of the question though?” he asked. “We saw a few years ago we increased the tobacco tax and also increased the liquor tax.”
Krawetz wouldn’t say what new taxes might be in the budget, only “there are taxes that are not off the table, but our goal is tax increases are something that we look at as a last resort,” he said.
Krawetz said that the budget process was started back in July of 2014 and both former MLA Tim McMillan and current Lloydminster MLA Colleen Young have had their input on the 2015 budget.