With a provincial election to begin only a month from now, it鈥檚 remarkable how quiet things have been. Sure, we鈥檙e starting to see some union advertising and a few more billboards here and there. The occasional newspaper ad from a prospective candidate can be seen in print. But all-in-all, it鈥檚 been hum drum.
聽聽聽聽聽聽聽聽聽聽聽 That鈥檚 probably because there hasn鈥檛 been a real big issue to capture the public鈥檚 imagination. The reality is, however, there is one issue that will dominate election 2016.
No question about it, this election is about oil.
聽聽聽聽聽聽聽聽聽聽聽 The 2013 provincial budget (before the 2014 slide in oil prices we are still enduring today) showed what the province was estimating from the 2012-13 fiscal year in revenue. Out of an $11.29 billion budget, oil revenue was $1.6 billion, with $220 million in land revenues. Natural gas revenue continued its status as a rounding error, at $12.5 million. In 2005-06 it was $191 million.
聽聽聽聽聽聽聽聽聽聽聽 When you added up $700 million in potash, plus $486 in the resources surcharge and $124 million in 鈥渙ther,鈥� the total hit $3.148 billion 鈥� 27.9 per cent of the budget that year.
This year, potash mines in New Brunswick are being closed, and oil is now down by more than 70 per cent, give or take, from what we had become accustomed to from 2010-2014. Land sales have diminished to next to nothing. We are hurting, plain and simple, and mostly due to the drop in oil revenue.
聽聽聽聽聽聽聽聽聽聽聽 That鈥檚 why Premier Brad Wall not too long ago called a spade a spade, and said we will be running deficits for this year and next (on the assumption he is re-elected.)
聽聽聽聽聽聽聽聽聽聽聽 It doesn鈥檛 matter who gets elected, there will be a deficit. And by Wall making the proclamation of an impending deficit, it sets the stage for the election.
聽聽聽聽聽聽聽聽聽聽聽 And so we lose all the fun out of the election. People who make grandiose spending promises are fools 鈥� where will they get the money? Special interest groups may cry out for this and that, and the simple response is, 鈥淲hat do you expect is going to pay for that?鈥�
聽聽聽聽聽聽聽聽聽聽聽 Electorally, the oilpatch is small. It鈥檚 just a few ridings whose outcome is a foregone conclusion, all likely to elect Saskatchewan Party candidates. The number of people out of work is relatively small, too, compared to the rest of the province. But it鈥檚 clear that their pain is now everyone鈥檚 pain. Back in 2012, oil roughly equalled all expenditures in the Ministry of Education, including teacher pensions, but excluding the Ministry of Advanced Education. That鈥檚 right 鈥� oil paid for every K-12 kid to go to school in 2012. That鈥檚 how significant this is.聽
聽聽聽聽聽聽聽聽聽聽聽 It means union contracts will get zero salary increases for the bulk of the contract. It means instead of new projects, we will see cutbacks.
聽聽聽聽聽聽聽聽聽聽聽 That鈥檚 a real fun one for campaigning candidates knocking on doors. 鈥淗i, I鈥檇 like to be your MLA, but I can鈥檛 promise anything nice. Hopefully, we won鈥檛 have to close your school or roll back your wages if you work in the public service.鈥�
聽聽聽聽聽聽聽聽聽聽聽 While Wall has continually stressed the point of how the province has had job growth despite tough times in the oilpatch, because our economy is diversified. But clearly this sector is having a tremendous impact on the bottom line. He鈥檚 also signalled no desire to raise taxes.
聽聽聽聽聽聽聽聽聽聽聽 So with every campaign promise made by every party, ask yourself this: Who is going to pay for it? Are we going to raise taxes, run deficits and incur debt?
聽聽聽聽聽聽聽聽聽聽聽 Make no bones about it. You might think other issues are pressing, but the underlying issue is all about oil, and the revenue it used to bring in.
