The provincial budget tabled last Tuesday tells a grim story. The years of penny-pinching, retrenchment and austerity are not over. Instead, they stretch to the horizon.
Understandably, Finance Minister Mike de Jong tried to put a good face on things. sa国际传媒 had, he said, scored a fiscal hat trick: Three balanced budgets in a row.
But barely concealed behind this facade is a litany of bad news. The surplus he announced for 2015 is just $284 million.
On a budget of $45 billion, that鈥檚 a razor-thin bottom line. It would take only a minor run of bad luck to force us back into debt.
With the 2008 recession a distant memory, we should be seeing much rosier projections 鈥� in the $1-billion range, at a minimum. Instead, none of the targets de Jong set for the next three years reach even half that amount.
There are far-reaching implications for the public sector. One of the key ministries in rebuilding our economy, Advanced Education, takes an outright (albeit small) cut. Ten others get an increase of less than half a per cent.
Even Health, which bears the full weight of a growing and aging population, is held to a 2.9 per cent lift. That is nowhere near enough to meet demand.
But what鈥檚 really eye-opening is the picture that emerges of the sa国际传媒 economy. Previous recessions have been followed by vigorous periods of expansion.
After the last major downturn, in 1982, our provincial economy averaged a growth rate of 3.5 per cent for seven years running.
Despite the massive damage inflicted by the Great Depression of the early 1930s, sa国际传媒鈥檚 economy rebounded at an annual rate of eight per cent.
But this time around, sa国际传媒 is limping along with growth levels averaging just 2.3 per cent. And some sectors vital to the government鈥檚 revenue base are still underwater.
In 2007, natural resources contributed $4.6 billion to the treasury. De Jong is forecasting just $2.8 billion this year 鈥� a 40 per cent drop. That figure alone explains much of the problem.
Some of this weakness is due to the drop-off in lumber sales. Before the recession, our primary market for wood products 鈥� the U.S. 鈥� recorded 358,000 housing starts annually. Immediately afterward, the total dropped to 119,000.
That cost our workforce 10,000 jobs.
The tumble in oil prices has also played a part. We鈥檙e not as hard-pressed as Alberta, but in a weak recovery, every hit counts.
What this budget makes clear is that the 2008 recession was a huge game-changer. It caused structural damage to our economy far more extensive, and far more prolonged, than anyone understood at the time. And the impacts are still being felt.
By the end of de Jong鈥檚 three-year planning cycle, his head is still barely above water. And this is only accomplished with the continuation of an austerity program already entering its seventh year.
Nothing good comes of that. Allowing for inflation and population growth, the sa国际传媒 government in 2017 will be running on the same revenue base it had in 2007.
Is this really feasible? Yes, if we persist with a diet of retrenchment across every program and service.
But perhaps the time has come to consider a different approach. Either find new sources of revenue 鈥� no easy matter 鈥� or make a handful of deep, selective program cuts that alter the fiscal trajectory once and for all.
For this long, slow grind is immensely draining. It saps morale. It hampers renewal.
And ultimately, it holds out false promise. That is no way to run a government.
