In mid-September I wrote in this space, "We must be wary of any pie in the sky election promises. The precise reason why we are not in tough times is because of an established tradition of being tight with spending combined with high commodity prices in potash, oil and wheat. We need to be cautious of another marked drop in commodity prices should a true double-dip recession take hold worldwide.
"Buying votes in 2011 is the last thing Saskatchewan needs. Punish anyone who says that is the way to go, perhaps by buying them a plane ticket to Greece."
With the election platforms now out for both the New Democratic Party and the Saskatchewan Party, the chickens have come home to roost.
There is a marked and dramatic difference between the two platforms.
The list of NDP promises is long, and costly. By their accounts, it will be $2.3 billion, while the Saskatchewan Party is claiming that number would be more like $3.1 billion.
While NDP leader Dwain Lingenfelter spoke of revenue sharing with First Nations, I couldn't find that line item in their costing document. However, the opening statement in their costing document from M.C. McCracken, CEO of Informetrica Limited, noted, "You have expressed a willingness to discuss the possibility of resource-revenue sharing with First Nations. This is a commendable step. I note that successful revenue-sharing arrangements, such as with the Nisga'a in British Columbia or First Nations in the Yukon have taken a decade to negotiate. Without prejudging the outcome of potential negotiations in Saskatchewan, I do not believe that they would affect provincial finances during the four years covered by your platform."
I'm not sure what he was smoking when writing that last line, but it must have been some pretty good stuff, perhaps produced in British Columbia as well. The NDP costing document has a line item for midwifery ($500,000 in the first year, then $1 million and $1.2 million for the last two years), but no dollar amount for what would surely be in the hundreds of millions of dollars should such revenue sharing come to pass.
The Saskatchewan Party, on the other hand, says their platform would cost an additional $414 million over four years, which is a veritable drop in the bucket. Most of these promises have been small, token measures. Definitely not the chicken-in-every-pot promises like the NDP have come forward with.
Indeed, the cost of the Sask. Party platform is so minimal there's not much point in talking about it, other than to say, "OK, we can afford that without any significant pain or problems."
The NDP's plan calls for just $504 million in debt repayment over four years. The Saskatchwean Party plan says $206 million for debt reduction, and $206 million for the rainy day fund. On this point, both fall down. Saskatchewan should be trying to achieve that level in each of the next four years, and quite possibly much more than that, so that the remaining $3 billion or so in provincial, non-Crown debt can be wiped off the slate within this next term.
Nearly all the NDP's money comes from putting the boots to the potash industry by raising potash royalties. They claim it's not much compared to potash revenues, but consider this: what happens if revised royalties scare off the several new mines in development? Did you know that Akita Drilling Rig 15 is today drilling just east of Melville, while Nabors' Drilling Rig 24 is just northeast of Stockholm? They're defining the ore body for BHP Billiton's likely follow-up mine to Jansen Lake, near Melville, which will be close in size to Jansen, projected to be the largest potash mine in the world. This is just one of several mines in development by BHP and other contractors.
If we don't mess with this development, the potential, long-term growth in our economy through jobs, income taxes, and additional potash royalties for the next 40 years will likely grow organically and make up for the additional money the NDP wants to grab in royalties, but without chasing away the new jobs.
I think we now know for whom to buy the tickets to Greece.
Brian Zinchuk is editor of Pipeline News. He can be reached at [email protected]
