Building the "Saskatchewan Advantage"
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- Published on Monday, 27 March 2017 22:00
- Written by editor
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A Socialist Project e-bulletin .... No. 1389 .... March 28, 2017
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Building the "Saskatchewan Advantage"
Saskatchewan’s 2017 Austerity Budget
"You never want a serious crisis to go to waste" -- Rahm Emanuel
Charles W. Smith and Andrew Stevens
Saskatchewan's 2017 budget landed with an unenthusiastic thud last week. Riddled with cuts, job losses, public sector wage reductions, and tax increases, the Saskatchewan Party's austerity budget has garnered few friends, with critics ranging from organized labour movement to small businesses. The government's budget has several fiscal goals: aggressively tackle its $1.3-billion deficit in three short years, overhaul the tax structure away from progressive forms of taxation to consumption taxes, and dismantle key aspects of the social welfare state.
In our view, Budget 2017 should be viewed in two ways. First, it is clearly a reactionary... document drafted by an openly conservative government responding to the dramatic fall in natural resource prices that began in 2014. Second, and perhaps equally important, the budget is also a calculated political decision to exploit the fiscal crisis to further transform the provincial state to facilitate long-term private capital accumulation in the natural resource sector, keeping those sectors free from a burdensome tax regime or regulatory pressure. In other words, the government is using the fiscal crisis to push through the so-called "Saskatchewan Advantage," which it defines as the province having "the lowest corporate tax rate and the lowest tax rate on manufacturing and processing in the country."
Although the extension of such neoliberal policy initiatives has long been promoted by the Saskatchewan Party, the crisis of 2014-2017 has provided the government with both the economic and political opening to further dismantle important aspects of the social welfare state, attacking public sector workers (while undermining public sector bargaining) and further privatizing the public enterprises that define Saskatchewan's mixed public-private political economy. In other words, the government has taken full advantage of the deficit and stagnant commodity prices in order to fulfill its long-held ideological objectives.
