NDP slams minister for missed deficit signals
Last Updated: Tuesday, November 10, 2009 | 7:19 PM CT
CBC News
With Saskatchewan's finances heading toward deficit, the NDP Opposition is slamming the finance minister for not foreseeing the downturn.
At the legislature Tuesday, NDP Leader Dwain Lingenfelter criticized Finance Minister Rod Gantefoer's government for boosting spending based on erroneous projections of potash revenues.
Six months ago, Gantefoer predicted the government would take in $1.9 billion from potash royalties. In the summer, that figure was reduced to about $600 million and now it's possible there will be no potash money at all.
Although the provincial gross domestic product was supposed to grow by 2.1 per cent, the most recent projection says the economy will shrink by 0.5 per cent, Lingenfelter said.
"Obviously, when you send most of your resources into India and China and the United States and they're in recession, anyone who was reading the tea leaves would know that we would be in a recession," Lingenfelter said. "We shouldn't have increased spending by 32 per cent."
Gantefoer confirmed Saskatchewan's economy is shrinking and that the province is spending more money than is coming in. While that's a deficit, the government plans to stay out of the red, at least on paper, by moving some money around.
'Rainy day' fund
The difference will be made up by taking money from the Crown corporations and the government's "rainy day" fund, Gantefoer said.
He also defended the increased spending, saying some of it was going toward one-time, long overdue infrastructure improvements.
Still, Gantefoer said, he was concerned that so far, the province has not received any potash royalties.
"Well, we don't like it at all," he said. "I'm not enjoying the fact that potash has been affected so dramatically. I worried about it at budget time and I never dreamt for a moment that it would be something of this magnitude. I worried about, it but I never foreshadowed anything of this magnitude."
The province is scheduled to release its mid-year financial update next week. Gantefoer said that report will show a revised projected growth rate, with the new figure showing negative growth.
