The Saskatchewan government has presented its budget for 2017-18, and the news is not good for the vast majority of the province’s residents. Desperate to reduce a ballooning budget deficit that stood at $1.29 billion at the end of the 2016-17 fiscal year, the government of Premier Brad Wall has unleashed a wave of austerity measures in the form of tax hikes and service cuts that will have their most severe negative impact on workers and youth, seniors, and the poor. Even as it mercilessly attacks the most vulnerable sections of the population in the name of balancing the budget, the Wall government has pushed through a series of corporate tax cuts, dispelling any doubts about which side it is on in the province’s intensifying class war.
The turn to austerity trumpeted by Finance Minister Kevin Doherty in the 2017-18 budget—titled Meeting the Challenge in an impressive example of Orwellian doublespeak—is directly related to the logic of capitalism and the declining prices for resources such as oil and potash that long fueled the Saskatchewan economy. The Wall government was happy to take credit for the relative prosperity of previous years that was actually the result of high resource prices. During these years, it happily passed corporate and personal income tax cuts without concern for the eventual need to “save for a rainy day”. Now the rain has come and the government finds itself desperately trying to plug the holes in its budget.
Adding insult to injury in Wall’s austerity budget is its commitment to push through $107 million in personal and corporate tax cuts even as the province is drowning in red ink. At the same time, the government is raising the Provincial Sales Tax (PST)—which has not been harmonized with the federal GST—from five to six per cent across a broader range of products and sectors, adding $242 million to government coffers. Regina is also increasing “sin taxes” on items such as alcohol and cigarettes. Beer, for example, will be marked up by almost seven per cent, while cigarettes will cost an additional $0.50. Education property taxes will be increased by $54 million. Simultaneously cutting personal and corporate taxes while raising sales tax appears contradictory until one considers the class interests in play. The major beneficiaries of personal and corporate tax cuts are corporations and the wealthy, while sales taxes disproportionately affect poor and working class people. Here we see in stark terms how working people are made to pay for the crisis.
Service cuts are another key element of austerity; in its harshest form, this can mean eliminating a service altogether. Such is the unhappy fate of the Saskatchewan Transportation Company (STC). After 70 years, the provincial bus service will close down permanently on May 31. Beyond the elimination of 224 jobs, the closing of the STC has sparked outrage among residents of hundreds of small communities across the province who depended on the bus service for freight and transport to larger urban centres. For those unable to drive or afford a car, the STC allowed them to travel for work or medical treatment. The elimination of the STC for such individuals, particularly older rural residents, can quite literally be a matter of life and death, even as the government stands to save a relatively paltry $17 million from closing the bus service—less than a fraction of its planned personal and corporate tax cuts. Crown Investments Minister Joe Hargrave blamed declining ridership, with the government stating that only two of the 27 STC routes are profitable. As is generally the case under capitalism, serving vital human needs is irrelevant; all that matters is turning a profit.
Students will also suffer under the new budget. Post-secondary institutions are facing a five per cent funding cut; the government is reducing scholarship contributions by $2 million, and slashing student aid funding by more than $6 million. Post-secondary students are already in dire financial straits, taking on more debt than ever before and facing an unsteady and uncertain job market. Under these circumstances, the government should be investing in post-secondary institutions.
The effects of some cuts affect whole cities, as is the case with the government cutting the grant-in-lieu of taxes program from Crown corporations by more than 50 per cent, or more than $35 million. The grant-in-lieu program involves providing grants to 13 cities across Saskatchewan, based on tax notices from the previous year, to fund civic infrastructure. As a result of the budget, SaskPower and SaskEnergy will no longer be providing grants, a change that affects more than 100 municipalities including the urban centres themselves. The province’s largest city, Saskatoon, now faces a shortfall of $11.4 million in its operating budget, with Mayor Charlie Clark noting the city’s plunge into an “immediate fiscal crisis”.
Finally, in a blatant attack on labour, the government plans to negotiate $250 million in wage reductions for public sector workers. While the gains of the boom years largely went to the rich and those at the top of the socioeconomic ladder, government workers are now expected to pay for the crisis through a 3.5 per cent reduction in wages that Doherty said has already been worked into the budget. By going on the attack against public sector workers, the Wall government is setting the stage for a major escalation of the class struggle in the province. The Saskatchewan Government and General Employees’ Union (SGEU) has already filed a legal challenge with the Labour Relations Board against the provincial government alleging that it has been acting in bad faith by proposing the wage rollbacks, undermining pensions and benefits as well as the bargaining ability of the SGEU.
There has been noticeable backlash to the budget already. Premier Wall was booed at a CFL Week appearance the day after the budget was announced. A recent poll showed Wall’s approval rating sitting at 46 per cent, down from 52 per cent in the fall and essentially tied with his 45 per cent disapproval rating. The Saskatchewan Party remains strong, but only leads the NDP in the polls by five percentage points. As the effects of the austerity budget take hold, it is likely that the Wall government will continue to decline in popularity to the benefit of the NDP.
Public libraries were another major target of the Wall austerity budget, but the backlash from below has forced the government to backtrack. Funding for the Regional Public Library Service was to be cut by a whopping 58 per cent. According to the Saskatchewan Information & Library Services Consortium, rural public library branches would have lost the ability to purchase or process any new materials (books, DVDs, etc), to transfer items between branches, provide digital resources, coordinate or provide programming kits for book clubs and other activities, or provide IT support for staff and public access computers. This is the first victory of the anti-austerity movement, which must keep up the pressure.
It is essential that we recognize that this austerity budget was not an ideological choice. The Saskatchewan Party did not decide to cut services and raise consumer taxes out of pure malice. Austerity is part of the logic of capitalism, under which there can be no alternative. Failure to cut merely increases the debt and prepares for greater austerity down the road. Any government that asks corporations and the rich to contribute would face a backlash leading to capital flight and corporations leaving Saskatchewan in droves. Under capitalism, power is concentrated in the hands of the rich, who are able to use their wealth and influence to avoid paying for the crisis. Instead, under capitalism, it is the poor and working class who must bear the burden of paying off the debt through service cuts and tax increases.
We must also point out that the right-wing policies of past NDP governments played a major role in paving the way for the current mess in Saskatchewan. In the 1990s, left with a $14 billion debt from the Conservative government of Premier Grant Devine, his successor Roy Romanow balanced the budget on the backs of working people through austerity measures such as raising taxes, closing hospitals, and cutting back on other services. Anger against the NDP governments of Romanow and Lorne Calvert led to the NDP suffering a crushing loss to Wall and the Saskatchewan Party in the 2007 provincial election and subsequent elections. Wall’s landslide victories enabled his government to pursue policies such as corporate tax cuts that completely depleted a $2 billion surplus and resulted in multiple deficit budgets—ensuring the province would be unprepared when chickens came home to roost in the form of declining resource prices that massively inflated the debt.
The NDP have, unsurprisingly, condemned the budget, calling it “callous” and accusing the Saskatchewan Party of forgetting for whom they are working. But the Saskatchewan Party knows exactly who they are working for. They work in the interests of the capitalists and the ruling class, and this budget certainly serves those interests.
Labour unions have also come out against the budget. In addition to the legal challenge by the SGEU, public sector unions including the SGEU and the Canadian Union of Public Employees (CUPE) have joined with other labour groups including the Service Employees’ International Union (SEIU) and Unifor to organize a series of protests, and released public statements condemning the cuts and the resulting layoffs. The unions organized a mass rally at the Legislative Building in Regina on March 8 to protest the cuts and the government’s targeting of public sector workers.
Condemnation and protests alone, however, are not enough. Unions must look away from defanged protests and rallies, and towards militant strike action. The Saskatchewan government plans to push through austerity and will do so unless stopped in its tracks by a militant mass movement. If the government moves to declare such action illegal, then it must be defied. The future of the labour movement is at stake, as well as the livelihoods of millions relying on services. Labour must be prepared to take collective action to oppose Wall’s austerity budget, and the NDP must back any such action. Wall, Doherty, and the other lackeys of capital are determined to lower the quality of life for working people in Saskatchewan—and yet those same workers organized as a class have the potential to form an unstoppable force that can halt capitalist austerity in its tracks.
