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Monday, December 03, 2012 

Even Brad Wall's Supporters Question His Phony Claim That Saskatchewan Has The 'Only' Balanced Budget In Canada

 The following post was published at 'Saskatoonhousingbubble' blog on November 27, 2012. It is written by a supporter of the Saskatchewan Party and challenges Premier Wall's claim (repeated by every mindless MSM outlet in the province) that the Sask Budget is 'balanced':

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Is the Provincial Budget Really Balanced?

Today we heard the "Provincial budget is balanced" but in reality The Province of Saskatchewan Statement of Debt has increased by $1 Billion in 6 months.  What is going on here? Huh? What?  I thought they said "balanced budget?" Before we get to that,

From
Newstalk 650
In a news conference at the legislature on Tuesday, Finance Minister Ken Krawetz acknowledged the government has been saved from a deficit in part because of that one-time transfer from the feds.
"There would be other things that we would be looking at in terms of expense management absolutely. I mean that's the benefit of a mid-year projection. We're able to look at all of the sources that provide additional dollars and we're able to look at where we're able to adjust expenditures" he said.
He admitted the heavy reliance on resource revenues continue to make the province vulnerable.
"There will be challenges for the financial planning for 2013-2014 and beyond."  Provincial debt is staying on track at just under $4 billion, yet Crown debt -- particularly at SaskPower --continues to rise.

So the province has a "balanced budget" because of a one time transfer from the feds.  Actually, $95 Million to be exact.  Oh, and remember the surplus is $12 Million.But the numbers also show that Crown debt has increased from $4.4 Billion to $5.3 Billion since March.  But according to the way accounting is done:

From the Government of Saskatchewan




* Some Crown corporations and other organizations have obligations to other
entities. The General Revenue Fund is not responsible for this other debt.

So the General Revenue Fund is not responsible for this other debt.  That is fine, but then do not count the use of Crown money on the revenue side if you do not use Crown debt on the liability side.  And we should note that that there was a $47.7 Million increase from Crown transfers to the General Revenue Fund.  It seems like we are paying down the mortgage, but increasing the line of credit to fund capital expenditures.  At the end of the day, taxpayers in Saskatchewan are being saddled with more debt.


So we need $142 Million of extra cash to get to a surplus of $12 Million.


I like Brad Wall, I voted Sask Party last election.  But I don't like when the numbers are played around with.  Tell us the truth.  I guess it does not matter what party is in, the little guys get screwed and lied to. 



Just for those who are wondering, we can see in the next few graphs total debt has shrunk from over $12 billion in 2004 to just over $8 billion in 2011. From 2004 to 2007, the NDP paid down about $1 billion in debt, while the Sask Party has paid down about $3 billion since 2007.



Total debt has increased since 2009. Once 2012 is done, I will add the new numbers to the graph.
Here is how it looks when we break down debt from Crown corporations and debt from the General Revenue Fund.

The big reason provincial debt was paid down?  Resource revenues.  The list below shows the year and resource revenues * 1000.  ie 2008-2009 = $4.6 Billion in resource revenues.  That is why the government paid down so much debt.  But the good times don't always last and governments need to learn how to spend wisely.

Why did resource revenues go through the roof in 2008?  The commodity bubble of course!

Here is Potash



Here is Uranium

Here is Oil




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