(Brad Wall. Photo: CBC.ca)
Editor’s note: We welcome Amanda Achtman to the Straight Talk blog. Amanda will be contributing from time to time. A graduate of the University of Calgary, she is a regular commentator on Canadian public policy and politics.
By Amanda Achtman, AIMS Author
What’s a government with a budget deficit to do?
As our study shows, provincial governments have steadily been increasing public spending – in absolute and per capita terms – from 1980-2016.
Increasing spending is no way to curb deficits. Instead, increased government spending translates directly into higher taxes, making our region at once less attractive and competitive.
As we have argued consistently, the best policy approach is to reduce the size of the public sector. This is the surest way to save billions of dollars. But which public sector workers are prepared to take the pay reductions implicit in such a strategy?
Saskatchewan Premier Brad Wall has just announced that he and his government are going to do just that.
In a video posted on Facebook, Wall acknowledges the reality that Saskatchewan is facing a budget deficit of more than one billion dollars due to the recent decline in resource revenue.
“As a result,” he says, “our government will be taking steps to control and reduce spending in the upcoming budget. The largest single area of government spending is compensation—salaries and benefits for our valued public sector employees. We spend over 7 billion of taxpayer’s dollars a year on salaries and benefits across all of government, so any meaningful effort to reduce government spending must include a reduction of that amount.”
Next, Premier Wall demonstrates how governing politicians can lead the way in addressing the problem of having more government spending than taxpayers can afford:
“I’ve always said that, as elected officials, we will not ask other public sector workers that we’re not prepared to do ourselves. That’s why we will be starting by reducing the salaries of the premier, all ministers and MLAs by 3.5% effective April 1st. Also, all of the staff who work in the premier’s office and minister’s offices will be required to take nine unpaid days off a year, which also amounts to a salary reduction of 3.5%.”
He estimates that this concrete, practical measure will save half a million dollars a year.
Wall admits it’s only the first step, though. The aim is to reduce public sector spending by 3.5% across the whole public sector in that province through negotiations with the public sector unions. This move can save billions and get the province in better fiscal shape.
At AIMS we have been and will continue to make the case for shrinking the size of the inordinately large public sector in Atlantic Canadian provinces.
We have more public sector workers per capita in our region than elsewhere in Canada and they earn more than average relative to their private sector counterparts. Now that we have made the theoretical case and a Canadian premier is making the practical case, the question remains: Will Atlantic Canadian politicians follow suit in reducing the size of the public sector for taxpayers?