Former University of Saskatchewan president Ilene Busch-Vishniac has filed a lawsuit in which she claims Premier Brad Wall, former advanced education minister Rob Norris and university board members all played roles in her termination last year.
In a statement of claim filed Wednesday at Saskatoon Court of Queen’s Bench, Busch-Vishniac’s lawyer alleges Wall and Norris unlawfully interfered with the decisions of the U of S board and that the board did not follow protocol when it called an emergency meeting last May during which members decided to fire her without cause.
Statements of claim contain allegations which have not been proven in court.
The claim further alleges that “Silence of the Deans,” a document criticizing the university’s controversial TransformUS cost-cutting plan that was publicly authored by ex-public health dean Robert Buckingham, was in fact orchestrated by former university president Peter MacKinnon and his wife, Janice MacKinnon, who is a professor at the university.
The claim says the couple instructed Buckingham on what to write, when to disseminate the document, and to whom he should send it.
When reached by phone Wednesday, both MacKinnons denied the allegations.
“I’m not a party to this lawsuit and I can simply say that the allegation that you refer to is not true,” Peter MacKinnon said.
“It is simply untrue, simply not factually accurate, untrue,” Janice MacKinnon said. “It’s before the courts and the documents will show that it’s simply untrue … it’s in the court, so I don’t really want to say more.”
Busch-Vishniac is seeking $8 million in damages, plus $250,000 for defamation and $250,000 for aggravated, punitive and exemplary damages.
The claim says the former president was “arbitrarily and unlawfully terminated from her position as president,” which has caused “irreparable damage” to her reputation.
Busch-Vishniac has made “extensive efforts” to find work similar to that of university president, but she has been unsuccessful, the claim states.
“She has become effectively unemployable as a senior executive in a university or other setting,” it reads.
Busch-Vishniac was fired by the U of S board of governors without cause on May 21, 2014, after a tumultuous week at the university.
In a series of interviews following her televised address to the province Thursday night, Redford said that she wanted Albertans to understand that the province should no longer rely on its resource wealth to balance its books, pointing to a $6-billion â€œbitumen bubbleâ€ that will cut the provinceâ€™s anticipated resource revenue almost by half in 2013-14 fiscal year.
â€œWe can no longer continue to rely on oil and gas for 30 per cent of our revenue,â€ Redford said Friday. â€œItâ€™s a fundamental change. Itâ€™s the sort of thing a province has to deal with, I think, once in a generation, and this is our opportunity to do it this year.â€
The provincial government has received plenty of advice in recent years urging it to wean itself off a practice of using resource royalties to balance its books.
The Premierâ€™s Council for Economic Strategy, a panel of experts established by Premier Ed Stelmach, tabled a report in May 2011 that asked Alberta to divert non-renewable resource revenue instead into a new â€œshaping the futureâ€ fund dedicated to helping diversify the provinceâ€™s economy.
The councilâ€™s chairman, former federal cabinet minister David Emerson, said Friday it sounds like Redford is looking to make that kind of shift.
â€œSheâ€™s looking at establishing a new fiscal regime and thatâ€™s essentially what the premierâ€™s economic strategy council was calling for: To stop treating non-renewable resource revenues as a form of operating revenue to be spent on, in effect, buying the groceries and to become more strategic separating natural resource assets,â€ Emerson said.
â€œIf thatâ€™s the case, my congratulations,â€ he said.
But while Redford said Friday that a â€œdifferentâ€ budget will be forthcoming, she also said will not be a disruptive document. The government has already sent some signals about what some of those changes might look like, she said, pointing to the governmentâ€™s plans to borrow to fully twin a 240-kilometre stretch of Highway 63.
â€œThe Highway 63 announcement signalled to people that weâ€™re going to think differently about long-term infrastructure plans,â€ Redford told The Canadian Press. â€œWeâ€™re going to finance that differently. Weâ€™re prepared to go out to capital markets and to really put out stellar fiscal reputation out there and ask people to invest in our province in some of our public infrastructure.â€
As of right now, however, Redford said tax reform is not part of that financial restructuring.
Right now it looks like a lot of talk without the deep cuts and probably tax increases needed to bring the budget back in line. Â
Mount Royal University political scientist Keith Brownsey said Redford needed to make a case for a fiscal crisis in her televised speech. She did that in a reasoned, effective manner, he said.
Such a statement was needed, he said, because Albertans thought financial problems were something that were a thing of the past because of its resource wealth.
â€œI think she prepped us for both cuts and tax increases,â€ Brownsey said. â€œNow, she may not have said that today, she may have said, â€˜No taxes,â€™ but the current revenue structure in the province is unsustainable. We cannot exist as a modern industrial state living off of revenues from non-renewable natural resources. Itâ€™s simply too volatile.â€
The truth is that Alberta spends money like no other province in the confederation. Â Even during the Klein crisis, they spent more money than everyone else. Â People talk of the deep cuts he made but ignore the fact that in Saskatchewan, the NDP made even deeper cuts (and had to raise taxes). Â Whatever the solution is that it should be a combination of taxes and spending cuts and it is going to take a bit of time. Â
I have no doubt that Redford is serious about making cuts (and who knows, she may even raise taxes) but when the oil prices go up, will they stay the course and remake the economy, especially when the opposition will be calling for restored spending and tax cuts (it’s always going to be like that). Â I really hope she sticks with it because the oil and natural gas won’t be there forever. Â I know the oil sands are a massive reserve but not all of that is recoverable and there is a point where it gets more too expensive to go after it.
If her hero Peter Lougheed brought in Alberta 2.0, then Alison Redford will need to be the one to bring in Alberta 3.0. Â I hope it’s more than Devine era rhetoric.
Back in 2005 I saw a link to a review of Jared Diamondâ€™s book Collapse on the New Yorker website. Malcolm Gladwell was telling the story of Norse settlers coming to Greenland a millennium ago and I found the story fascinating. Even to the Norse, Greenland was not a place that one would want to inhabit but on the southwest corner there are some Fjords that looked a lot like southern Norway and was a perfect place to settle so they got off the boats and set out to tame the land. For four hundred and fifty years they built two settlements, churches, traded with Europe and possibly even had a section of prime downtown real estate they couldnâ€™t develop. They hunted seal, caribou and raised livestock and pets. Life was good and then one day it was all over. What happened?
Diamondâ€™s book is full of stories of societal collapse. Easter Island, Mayans, and even the genocide in Rwanda but the Norse on is the one that I keep re-reading. Partly because I am part Norwegian but partly because I keep seeing those settlementâ€™s demise being played out again and again today.
What happened in Greenland is what happened in most of the societies that Diamond looks at. The ecosystem was too fragile to support the population. The trees were chopped down for fuel, the soil erodes, the crops fail and society has to leave or ends up dying. He tells essentially the same story over and over again. Greenland wasnâ€™t as green as the Norse thought it was and the same thing happened to them.
What is so odd about this chapter is that within feet of their shore is some of the best fishing grounds in the world. Diamond describes running into a tourist who had caught two Arctic Char with her bare hands so why did they not fish. For years archeologists have looked for the fish bones and no one has ever found them. They found tons of trash fully of garbage and livestock bones. When the pastures couldnâ€™t support the cattle, the Norse ate the cattle, then their young (right down to the hoofs), and even their pets while ignoring a massive food supply right that was within feet of them. You could argue that maybe the Norse didnâ€™t know any better but there was Inuit there but the Norse looked down at the Inuit and their hunting practices that probably would have saved their lives.
What does this have to do with today? Until last week I wasnâ€™t that preoccupied with the U.S. debt ceiling. To be honest I was much more preoccupied with the NFL lockout. It never occurred to me that American politicians would allow the U.S. government to default on its debt. As the rhetoric flew in Washington, I realized it all sounded familiar. This isnâ€™t about economics; this is about the survival of ideologies and political parties. In the same way the Norse wouldnâ€™t fish, intermarry with the Inuit or even copy their ways of life because they were ranchers and because of cultural status, Republicans canâ€™t make a deal because they canâ€™t be seen raising taxes or Democrats canâ€™t been seen cutting Social Security or Medicare. Michele Bachmann canâ€™t compromise because that would alienate the Tea Party. John Boehner canâ€™t compromise because then he looks weak. Obama canâ€™t compromise or heâ€™ll upset his base. They may push the United States into another recession but they wonâ€™t have compromised on their values. Itâ€™s a pile of crap and the rest of the world in this case pays for it.
This is what bothers me about ideological arguments, they ignore the cost to people along the way. Real leaders are not ideologues. They are pragmatists who are capable of making hard decisions that go against their base. In Saskatchewan how popular do you think it was for the NDP when they closed rural hospitals or cut the public sector in their efforts to reign in the Saskatchewan deficit? In Alberta during the same time Ralph Klein instituted user fees on healthcare. How popular were the Chretien budget cuts and austerity of the 1990s with Liberals. So much for the short term vision of a just society. While the Saskatchewan Party says it is a party of free market principles, they dug in (with the support of the NDP) to help save PotashCorp (an American company that for some reason we could not handle being taken over by an Australian company because that would be wrong for some reason). Leaders decide to go fishing from time to time. They also know they need to raise taxes to pay for a war in Afghanistan and Iraq, no matter what it does to their presidential aspirations or how much it hurts their base.
So why didnâ€™t the Norse settlements eat Arctic Char (apparently itâ€™s quite tasty, similar to rainbow trout)? Because they were so concerned with the survival of their northern European culture, a culture of churches, cattle, and trade that they never could see there was an alternative way to act. Why is the United States about to walk into financial Armageddon because Republicanâ€™s donâ€™t raise taxes and Democrats donâ€™t cut entitlements and they are both too stupid to realize that this polarization canâ€™t continue.
As Gladwell points out,
The lesson of "Collapse" is that societies, as often as not, aren’t murdered. They commit suicide: they slit their wrists and then, in the course of many decades, stand by passively and watch themselves bleed to death.
I think I see blood on the floor.
60 Minutes had a feature on the budget crisisâ€™ that are happening at the state level. Stay with me on this one.
"The most alarming thing about the state issue is the level of complacency," Meredith Whitney, one of the most respected financial analysts on Wall Street and one of the most influential women in American business, told correspondent Steve Kroft
Whitney made her reputation by warning that the big banks were in big trouble long before the 2008 collapse. Now, she’s warning about a financial meltdown in state and local governments.
"It has tentacles as wide as anything I’ve seen. I think next to housing this is the single most important issue in the United States, and certainly the largest threat to the U.S. economy," she told Kroft.
Asked why people aren’t paying attention, Whitney said, "’Cause they don’t pay attention until they have to."
Whitney says it’s time to start.
California, which faces a $19 billion budget deficit next year, has a credit rating approaching junk status. It now spends more money on public employee pensions than it does on the state university system, which had to increase its tuition by 32 percent.
Arizona is so desperate it sold off the state capitol, Supreme Court building and legislative chambers to a group of investors and now leases the buildings from their new owner. The state also eliminated Medicaid funding for most organ transplants.
Then there’s New Jersey. It has the highest taxes in the country, a $10 billion deficit and a depressed economy when first-year Governor Chris Christie took office. But after looking at the books, he decided to walk away from a long-planned and much-needed project with New York and the federal government to build a rail tunnel into Manhattan. It would have helped the economy and given employment to 6,000 construction workers.
Gov. Christie acknowledged that’s a lot of jobs. "I cancelled it. I mean, listen, the bottom line is I don’t have the money. And you know what? I can’t pay people for those jobs if I don’t have the money to pay them. Where am I getting the money? I don’t have it. I literally don’t have it."
Asked if this is going on all over the country, Christie told Kroft, "Yes. Of course it is. It’s not like you can avoid it forever, ’cause it’s here now. And we all know it’s here. And the federal government doesn’t have the money to paper over it anymore, either, for the states. The day of reckoning has arrived. That’s it. And it’s gonna arrive everywhere. Timing will vary a little bit, depending upon which state you’re in, but it’s comin’."
And nowhere has the reckoning been as bad as it is in Illinois, a state that spends twice much as it collects in taxes and is unable to pay its bills.
"This is the state of affairs in Illinois. Is not pretty," Illinois state Comptroller Dan Hynes told Kroft.
Hynes is the state’s paymaster. He currently has about $5 billion in outstanding bills in his office and not enough money in the state’s coffers to pay them. He says they’re six months behind.
"How many people do you have clamoring for money?" Kroft asked.
"It’s fair to say that there are tens of thousands if not hundreds of thousands of people waiting to be paid by the state," Hynes said.
Asked how these people are getting by considering they’re not getting paid by the state, Hynes said, "Well, that’s the tragedy. People borrow money. They borrow in order to get by until the state pays them."
"They’re subsidizing the state. They’re giving the state a float," Kroft remarked.
"Exactly," Hynes agreed.
"And who do you owe that money to?" Kroft asked.
"Pretty much anybody who has any interaction with state government, we owe money to," Hynes said.
That would include everyone from the University of Illinois, which is owed $400 million, to small businessmen like Mayur Shah, who owns a pharmacy in Chicago and has been waiting months for $200,000 in Medicaid payments. Then there are the 2,000 not-for-profit organizations that are owed a billion dollars by the state.
Lutheran Social Services of Illinois has been around since 1867 and provides critical services to 70,000 people, mostly the elderly, the disabled, and the mentally ill. The state owed them $9 million just before Thanksgiving, and they nearly had to close up shop.
Asked how long his organization can go on like this, Rev. Denver Bitner, the president of Lutheran Social Services of Illinois, told Kroft, "Well, we wonder that too because we really don’t know."
He says they were forced to tap their entire line of credit and all their cash reserves before the state would finally pay them as a hardship case.
"It has to be that you’ve sold off all your assets, you have borrowed from everybody that you can borrow from, and then, we’ll think about it," Rev. Bitner explained.
And according to Bitner, that’s even though the state owes his organization the money.
"The first words out of my mouth are usually an apology, because they have been you know put in this situation, that is really unacceptable. And you know there is very little I can do or say other than apologize," Comptroller Dan Hynes said.
It’s not just the social safety net that Hynes has to worry about: there have been Illinois legislators that have been evicted from their offices because the state didn’t pay their rent, and stories about state troopers being turned away from gas stations because the owners refused to take their state credit cards.
"The state’s a deadbeat," Kroft remarked.
"Yeah. I mean, the state of Illinois is known as a deadbeat state. This is a reputation that has taken us years to earn and we’ve reached, you know, the heights of, I think, becoming the worst in the country," Hynes said.
In the early 1990s, Saskatchewan was on the verge of bankruptcy because the Grant Devine governments of 1982-1991 would not curb government spending and the deficit for a province under a million people grew to over one billion dollars. The incoming NDP government of Roy Romanow was more pragmatist than idealistic and spent almost a decade trying to get the province on solid financial footings. That journey was documented in the book Minding the Public Purse by the Hon. Janice MacKinnon, who was the Finance Minister during the most of the cuts. Like I said, it was a decade of austerity. There was funding cuts to healthcare, almost no building on the University of Saskatchewan or University of Regina campuses, a higher number of students in classrooms, longer waiting lists, rural hospitals closing, decaying highways, and it was really a lost decade. Yes Saskatchewan did grow a bit during this time but with our financial house in disarray, growth was hard.
MacKinnon talks about how close Saskatchewan was to defaulting on itâ€™s loans. With the precarious state of the Canadian economy (pre-Chretien and Martin), there was some legitimate concerns that this could lead to an IMF bailout and intervention. Luckily it never came to that but it did mean higher tuitions, higher taxes, more fees, a lot of lost opportunities that we are just now seeing as a province.
Whatâ€™s scary is that the deficit numbers coming out of the U.S. states are worse and for all intents and purposes, the US economy is soon going to be in as bad or as worse shape as the Canadian economy was in the early 1990s. I keep looking at the debt crisis that is swamping the EU economies and I canâ€™t help but wonder until how long it is that you see places like Michigan, Illinois, and California needing massive financial bailouts. Good grief, California has even looked at dissolving as a state and becoming a territory again (I donâ€™t think it was a serious option).
How many lost decade will the United States go through to pay for wars in Afghanistan, Iraq, and the greed of the banks? It took over a decade to recover from Vietnam and the state and cities economies werenâ€™t in such tough shape. This could either take decades or it could be the start of the long decline of the United States as a economic power.
The good news is that from Saskatchewan and Albertaâ€™s experience is that as voters, we understood that it had to be done. Whether it was the right wing Ralph Klein in Alberta or the centre-left Roy Romanow in Saskatchewan, we knew it had to be done and as a whole, we stood by them as they did the heavy lifting and hard cutting. The bad news for many states is that Saskatchewan has a natural inclination to support the NDP and Alberta has a natural inclination to vote Progressive Conservative which means that during the tough times, the provinces returned (or in Albertaâ€™s case, they only ever elect Conservatives) what they knew and trusted during rough times. If you donâ€™t have you could have a series of one term administrations that moved from spend to cut to spend to cut for short term partisan advantage which could derail or destroy the entire process. Too make spending cuts that are needed, you need a really strong majority which is not a strength of the American system which features a lot more checks and balances.
I canâ€™t see many states turning themselves around.
My early ideas on Social Services were shaped by the Devine Tories. As some of you know, the first campaign I worked on was the 1986 provincial election campaign that saw Grant Devine and the Progressive Conservatives re-elected. Devine was confronted with a large budget deficit, an extremely effective NDP opposition party, an ongoing drought and low grain prices, declining poll numbers, as well as his own conservative ideology. With the NDP controlling Regina and most of Saskatoon, the 1986 election split the province between urban and rural voters and Social Services became a wedge issue that was supposed to motivate Tories across the land.
Saskatchewan made some big cuts to Social Services and as Janice MacKinnon later discovered and wrote about, made Social Services into a very politicized department. I think history will see Grant Devine as a good man who believed in Saskatchewan but was a horrible judge of character in those he appointed. MacKinnon agreed
In appointing the hyper partisan Grant Schmidt to be Minister of Social Services in his second term, the Progressive Conservatives made no effort in hiding their dislike of the â€œsocialistâ€ Ministry of Social Services. The Conservatives had a weekly (or monthlyâ€¦ it was long time ago) fundraiser called Tory Tuesdays where a cabinet minister would come to Saskatoon and speak to the (dwindling) party faithful. I remember listening to Deputy Premier Pat Smith and then Social Services minister Grant Schmidt rail against people on Social Services and the Ministry itself. Janice MacKinnon quotes him in her book as saying the Ministry of Social Services spent money like a drunken sailor and said that out of â€œ2,200 employees in the department, 1,500 were his political enemiesâ€. I donâ€™t think it was a stretch to say that the Tories saw Social Services as a ministry that served an urban NDP core constituency where the Tories saw no chance for growth. By attacking them, they also appealed to their base.
Later I was at a fundraiser for newly appointed Social Services Minister Bill Neudorf. He joked about while he was excited to be in cabinet, how Social Services was the worst ministry in the province to have to take over in his public comments but at least he was in cabinet.
I never thought too much about it from a philosophical point of view. Like a lot of you, I believed that Social Services should be for those that really needed the funding and was (and am) disgusted by those who are taking advantage of the system. Our neighbour growing up was a masterful user of the system and despite being on Social Services had a much higher standard of living then we did. The fact that she was brazen about her fraud made it a lot worse to take. At the same time, I had no idea how hard it was on Social Services for those who are unwilling or unable to scam the system and to be honest, I had no reason to look into it. Growing up in Lawson Heights, crime wasnâ€™t really on anyoneâ€™s radar. I used to walk our dog Misty along Spadina Crescent late at night through River Heights. It was before there was street lights along the river and it was pitch dark. Not only did I feel no fear along the walk, neither did any of the people we met. Actually most of them carried dog treats with them (which is really odd considering who goes out with dog treats on the off chance they meet a pleasant dog while walking along a darkened part of the Meewasin Trail?). In addition to spoiling my dog, they had no apprehension about chatting with a large college student they met. Crime and personal safety wasnâ€™t on any of our minds.
As far as homelessness went, my first apartment was a downtown apartment for $250/month. I am not sure was Social Services was allowing back then but you could find $350/month apartments all over downtown. When I look back at old documents for the Salvation Army from the 90s, the issue was not too many guys in the dorms at work but there was concerns about too few men in the facility.
When I started to work in the church, social issues were not high on my theological agenda. The Free Methodist Church has never really engaged in social justice issues in North America, the church I had attended growing up was on the edge of McNabb Park but yet struggled to engage it consistently (although flooding itâ€™s parking lot one winter for a skating rink was a cool idea). While we touched on issues of poverty in ethics classes in college, it was never a local issue. Evangelical theology is inherently individualistic and that crossed the line to me to how I saw the world (as many of you have told me over the years, I have libertarian leanings).
The first I was really challenged in this area was by Methodist theologian, Leonard Sweet in his book, A Cup of Coffee at the Soul Cafe when it talked about what it meant for kids to go school hungry. The amount he quoted in the book was quite a bit less than I had blown at McDonaldâ€™s on my way home from work that night and for the first time, issues of poverty started to make some sense to me. While I still saw it as an individual generosity issue, I started to question it a lot more, even though I wasnâ€™t seeing as a societal issue.
During this time Wendy and I bought our home in Mayfair. Mayfair was and is a core neighbourhood but like most home owners, I only saw what was happening in our neighbourhood in terms of housing values, not what was going on in the homes that call Mayfair home but even then as I saw a drug dealer selling drugs right on my street corner (the same corner my house is located on), something was going on and it wasnâ€™t all good.
A couple of years later I was in Fullerton, lecturing at Hope International University. I was flying out of LAX on a Sunday morning and after being trapped in Los Angeles traffic many times over the week, I left really, really early on a Sunday morning without realizing soon that I was the only one on Interstate 5. I got to the LAX area really early and decided that I had some time to tour Watts. It was the first time that I started to see neighbourhoods as societal narratives and my first thought was â€œWhat the hell is going on here?â€. How does one of the richest cities in the world allow Watts to happen and Watts isnâ€™t even the worst part of Los Angeles. I came home and started to read about Watts, Skid Row, East Hastings, and other urban areas gone wrong and started to really wonder what was happening, both in Los Angeles and in other large urban settings. The more I realized that Saskatoon was no longer isolated from that. Poverty, crime, violence, and life in Saskatoon were a series of interconnected issues that were becoming interconnected with my life.
Around this time I had read Thomas Homer-Dixonâ€™s book, The Ingenuity Gap at my friendâ€™s Karenâ€™s insistence. While his story is a global one, Homer-Dixon tells a story of interconnected and complex systems that are evolving in a global world. While Thomas Friedman tells the economic version, Thomas Homer-Dixon adds environmental and complex socio-political factors to the equation. Each one of these factors require their own specialized experts and the problem is that as the world becomes more connected, the variables overwhelm even the experts which is kind of what is happening in many cities right now. So a new Super Wal-Mart comes to Saskatoon and increases the number of jobs by 100. Thatâ€™s a good thing right? Well what about job losses and hour cutbacks at Confederation Mall because the anchor store isnâ€™t there? Well not so good right? On the other hand there are people who are shopping locally because they canâ€™t get to Wal-Mart on bus. Thatâ€™s good for local store owners, except now the consumers have less discretionary income.
As I later took a job at the Salvation Army Community Services in Saskatoon, I saw a complex series of factors manifesting in some pretty horrific behavior. On my first shift I saw some very young prostitutes shooting themselves up after a night of working on the street, the next day I saw my first dial-a-dope transaction at a nearby flophouse. A week later as I was walking home, a women started to hit me with a stick on the street as I was â€œher enemyâ€. I was quite happy to see a beat cop as she started to hit him and I kept walking. I started to question what I was seeing like almost every staff I have later hired. What causes this behaviour, how do you change it, why canâ€™t more be done? Yet at the end of the day, I felt like I was working inside The Ingenuity Gap as the contributing interrelated factors overwhelm my (and others) ability to understand them.
As I am writing this, I am up at the lake and last night Wendy and I had coffee at our friends the Rigbyâ€™s. John is on the board here and was talking about the decision to shut down Kinney Memorial Lodge for the winter and whether or not that was a good one. Without giving a conclusion he mentioned a bunch of factors to consider and it made me chuckle because here you have a pretty simple question, did it make sense to close a retreat centre down when business is slowest (and probably expenses are higher) and even that has all of these variables and factors affecting the decision. How much more complicated is what is happening to Riversdale, Pleasant, and Mayfair?
Over the next several weeks I am going to try to look at some of these factors in Saskatoon. I needed a framework to work through this so I am going to use the programs where I work as a starting point to start the discussion and branch off from there. I welcome your comments and if you donâ€™t want to say anything publically, feel free to e-mail me as I donâ€™t publish any e-mails publically here.
Well itâ€™s official, deficit financing on the scale not seen since the Devine era is back in Saskatchewan.Â The government of Saskatchewan is going to run a billion dollar deficit this year based on the fall of potash prices.Â As told by the Star Phoenix.
The release of the governmentâ€™s mid-year financial report Thursday shows it now projecting it will take in only $109 million from potash royalties and taxes â€“ $1.8 billion below what it forecast in its spring budget.
The government is now spending more than it is taking in, even with higher-than-expected oil royalties, tax revenues and federal transfers.
That has required a drawdown from the reserve Growth and Financial Security Fund of $564.3 million and a special dividend from Crown Investments Corp. of $460 million from the sale of the governmentâ€™s share of SaskFerco.
However on a summary basis â€“ which includes all of the operations of government including the Crowns â€“ a deficit projected at $25 million at budget is now pegged at $1.05 billion.
The NDP were all over this today.Â Iâ€™ll link to Cam Brotenâ€™s website who posted the NDP press release and response to the deficit.
I liked how it started.
With the release of the Mid-Year Financial Report, NDP Finance critic Trent Wotherspoon said the Wall government has confirmed that it is responsible for the biggest example of fiscal incompetence in the history of Saskatchewan. He said the combination of grossly inflated potash revenue projections, equity stripping from Crown Corporations, and out-of-control government spending has left the province with a $1 Billion deficit on a summary financial basis and a financial blunder not seen in generations.
â€œPrivate forecasters, industry representatives, and the NDP Opposition all cautioned against the fantasyland numbers the Wall government put forward in its budget,â€ Wotherspoon said. â€œBut cheerleading and popular promises ruled the day with no thought as to whether or not the expert advice it received should have been taken into account.â€
Then it gets a bit weird as it moves for attacking â€œout of control spendingâ€ and attacks spending cuts.
Wotherspoon said the Wall governmentâ€™s fiscal mismanagement isnâ€™t just about numbers on a page; people are being asked to pay for its incompetence through cuts to healthcare, education, rural programs, and their quality in life in general. He noted that among the cuts was $122 million from the construction of long-term care facilities in rural Saskatchewan and $32 million from new school infrastructure.
So on one hand the NDP are criticizing the Sask. Party for running a huge deficit (which they should) while at the other hand trying to get upset or cutting spending to keep government spending under control.
I have friends and I respect people in both parties and here is my advice on to handle the situation.
Saskatchewan Party: You missed your revenue predictions by $1.8 billion dollars.Â I would fire whoever made that prediction because I agree with the NDP on this one, when you came out with this budget, you must have known it was going to be a bad year for potash prices.Â Even I knew it was going to be a bad year for commodity prices going into a global recession.Â To keep this from happening again, I would come up with an independent office of economic forecasters that would give guidance to the government that were outside the Ministry of Finance and therefore outside the influence of the political pressures that lead to really bad budget forecasting.Â Donâ€™t go half-way with this.Â Give it legitimacy, give it some independence, and fund it properly.Â I am not an economist but I know many of them have ideological bents on how the world is going to pan out and that is natural.Â Even the best economists are also going to make mistakes.Â I can accept that (not $1.8 billion dollar mistakes but some mistakes). Â What I want to see as a voter and a taxpayer is a process in budget forcasting that is non-partisan and transparent.Â This would go a long way in restoring some confidence in your budget predictions which have been questioned by the media for over a year. If you want us to trust you again, you need to take some steps to ensure you donâ€™t miss your targets again.Â Again, as a Saskatchewan voter and taxpayer I want to hear what your plan is to pay back your billion dollar boondoggle sooner rather than later.Â Itâ€™s a lot of money and you are going to take a beating in the press and in the Legislature but itâ€™s better to deal with it up front and head on and then move on then play political games with it.Â Dealing with it this way will hopefully stop the comparisons to the Devine Tories of the 1980s.
Also, potash prices didnâ€™t just fall last week.Â I know you a governing party doesnâ€™t want to give negative financial updates every month but it seems prudent during a time of unstable financial times to offer a more transparent accounting of the public purse in regards how we are doing compared to our predictions.
NDP: Maybe they should not use the same press release to attack out of control spending and then attacking spending cuts.Â Use two pieces of paper and maybe send out two different press releases.Â Despite not liking the wording and structure of their release, the NDP have the high ground here, as they are the ones that slayed the deficit that last time.Â If I was the NDP, I would have a reunion luncheon with Roy Romanow, Janice MacKinnon, Eric Cline, and others who had to go through year after year of budget cuts to talk about how hard it was and the consequences of deficit financing in the Devine years had on the 1990s in Saskatchewan.Â While you are at it, give out a lot of copies of Minding the Public Purse to remind us again how hard it was to make those cutbacks as a government but also to remind us voters how hard it was to see things we care about in Saskatchewan to be cut.Â If I was Trent Wotherspoon, I would also use the term â€œbillion dollar boondoggleâ€ a lot in the days ahead but that is just me.Â Boondoggle is such a great word.
For both parties, I would love to see a real debate on their visions for the future.Â A future that involves peak oil, a liquidity crisis turning into a long term government debt crisis, a future where our federal government seems destined to burden all of us with long term debt (again), higher interest rates, cut transfer payments, and potentially higher unemployment.Â Â Are we going to grow ourselves out of this mess (doubtful) or make drastic spending cuts?Â Will we see a higher PST and income tax rates in our future?Â Will the burden be put on businesses or individuals or will someone come up with a new path to take?Â Tough times are ahead and it would be refreshing to hear the vision of both major parties in Saskatchewan (and for that matter, I would like to hear the Liberal Party vision as well) about the role of Saskatchewan in a smaller, less affluent world will look like.