Back
Neighbour a “have”
Nov 26, 2004

Manitoba’s neighbours are now both classified as “have” provinces with the recent admission of Saskatchewan into the brotherhood of the wealthy.

Who would have believed that supposedly lowly Saskatchewan would become one of only three of Canada’s have provinces. But, it has.

“The Saskatchewan people will have a sense of pride and satisfaction that they’ve turned a very important corner,” Ralph Goodale, the federal finance minister and Regina MP, told the Globe and Mail’s Graeme Smith.

Of course, Ottawa can express joy at this momentous event in Canadian history since they will no longer — at least not this year — be obliged to direct federal equalization payment funds to Saskatchewan. On the other hand, Manitoba still relies upon Ottawa for at least 30 per cent of its budget. 

Apparently, Saskatchewan has been a member of this exclusive club since last fiscal year, but it took a while for Ottawa to make the necessary calculations, according to Smith. 

Manitoba has Ontario to the east and Saskatchewan and Alberta to the west as this nation’s only have provinces. It was only a couple of years ago that British Columbia had been in the ranks of the haves, so if they had retained that status Manitoba would have been the sole Western Canadian “have-not” province. As it stands, B.C.’s economy has pulled itself up by the bootstraps and could soon rejoin the ranks of the wealthy.

“It means we have some bragging rights,” Saskatchewan Finance Minister Harry Van Mulligan told Smith.

Bragging rights, indeed! 

For decades, Saskatchewan was referred to by the rest of Canada, including Manitoba, as a poor cousin, soliciting sympathy rather than praise. But, Saskatchewan deserves the rest of Canada’s praise as the newest economic powerhouse in Confederation.

Saskatchewan is blessed with plenty of oil and gas, like neighbouring Alberta, which has helped it attain its new status. It also has potash, uranium and minerals which have helped its bottomline. The province no longer has to solely rely upon agriculture to create wealth, and, as everyone knows, wheat and cattle production has been suffering a spate of setbacks in recent years. 

The fact that energy resources have pushed it forward on the economic front has been aided by provincial government policy. Saskatchewan, like Manitoba, is ruled by an NDP government, but the province to our west seems to have reached the conclusion that the private sector is the driving  force of any economic renaissance, so it intentionally embarked upon a program of change which has been to its benefit. 

For one, Saskatchewan’s government lowered energy royalties which contributed to a rush of oil and gas interests coming to the province to drill and liquid gold gushed from the ground.

It also lowered income taxes, though these may have been raised again if the province hadn’t realized its new have status.

The most recent announcement in Saskatchewan is the intention to privatize the sale of liquor, something that Alberta did a few years ago. According to reports, Alberta’s change from a pubicly-run liquor board to private sales has increased the amount of taxes collected by the provincial government.

Saskatchewan probably had to make these changes simply because it must compete with Alberta for investment and people. That the province which worships Tommy Douglas made these changes is significant, though not as surprising as one may think. Douglas, often referred to the Father of Medicare, though a dyed-in-the-wool socialist, was actually a bit of a fiscal conservative, demanding balanced budgets and spending responsibility.

Saskatchewan governments haven’t always followed Douglas’ philosophy and have saddled it with a substantial $7.5-billion debt. Saskatchewan cannot boast that it is debt-free like neighbouring Alberta, but its new “have” status has allowed it to commence paying down its financial obligations.

Now that it is a have, Saskatchewan can reap the windfall and support its citizens in a more tangible way — Van Mulligan is projecting a $289-million surplus this year. It has already announced more funding for cattle producers and health care. 

There’s one problem: oil and gas prices could crash at any time, although this is unlikely as long as uncertainty reigns in the Middle East and other OPEC nations in South America and Africa. Also, as long as China retains its status as a high energy consumer and retains its gluttony for resources, Saskatchewan’s economy should keep chugging merrily along.

Manitoba has a strong mixed economy, but it is not an economic powerhouse like the “haves” that now surround it. 

Manitoba will have to build upon its strengths and create the conditions that attract business and industrial development, and one day it may even become a “have” province like its neighbours.