A tale of three budget speeches

The most important speech of the year for a Yukon premier is the budget address, since in our system the premier is also the finance minister.

The most important speech of the year for a Yukon premier is the budget address, since in our system the premier is also the finance minister. The same is true of the opposition leaders, especially in an election year like this one, since they are auditioning for the job.

The speech from the throne at the start of a legislature may be full of grand talk, but few pay any attention to it. It is the budget speech where you can “follow the money” to see what the government really cares about.

Last week’s territorial budget was the Yukon Party’s last pre-election opportunity to show Yukoners their plan. Do the numbers show us whether they believe in big government or small government? Higher taxes or lower? How much of our rainy day cash reserve should be spent during this recession to stimulate the economy? Of this, how much is in big investments that will boost our long-term productivity versus spending on government services?

I read the budget documents last Thursday. Whether you like the Yukon Party or not, the budget made their position on these questions clear.

On the size of government, they put forward a budget that set another record in terms of government spending: $1.391 billion. This is about $37,000 per Yukoner, and about $300 million bigger than five years ago.

On taxes, there were no tax cuts to attract investment and people, although our taxes remain lower than most places in Canada. Our gas tax is the lowest in Canada. Cigarette taxes are third lowest. Small business tax rates are tied for third lowest. Our sales tax is zero, and tied for lowest in Canada with Alberta and the other territories. Our income tax rate for someone making $100,000 a year is the third lowest in Canada. The premier made a big deal about being opposed to a carbon tax.

On our cash reserve, while the budget is in surplus in accrual accounting terms, in a cash sense it runs down our cash reserve by $75 million, from $132 million at the end of last fiscal year to a projected $57 million at the end of this one. This reserve was $223 million two years ago. With only $57 million in cash left, after this budget the government will not be able to keep spending so much more cash than it collects, unless it borrows.

Indeed, the Yukon Party’s projections show Yukon government spending actually shrinking in 2017-18 after this year’s record budget. The Yukon government budget hasn’t shrunk year-to-year in a very long time.

On the question of whether the budget invests in big-ticket infrastructure that will improve our economy’s productivity over the long run, consider the items bigger than $10 million that were announced: $67 million for the Whistle Bend continuing care facility, $22 million for the hospital’s emergency room and MRI project, $15 million for planning on phases 3-7 of the Whistle Bend subdivision, and a combined $23 million in Shakwak and Robert Campbell highway upgrades.

Big investments in economically-related infrastructure such as electricity generation, mining roads, internet infrastructure and the Dawson airport may be coming in the future, but they are not in this budget.

So that’s the Yukon Party’s position. The opposition leaders had over the weekend to bone up on the delights of government accounting, analyze the numbers and lay out their alternative visions in the legislature this week. This also gave them time to re-read some classic finance minister speeches to tune up their rhetoric. Winston Churchill was finance minister for several years in the 1920s, although even Churchill fans will admit he didn’t shine in the portfolio (remember the gold standard fiasco of 1924?).

So it was with some excitement that I prepared my Excel table to compare the three fiscal policies, before downloading the NDP leader’s speech on Monday.

She made a series of pointed critiques about how the Yukon Party runs the territory, which engaged voters should read before the next election (along with the premier’s speech and the Liberal speech discussed below). She noted how the annual surplus has declined in recent years. But she did not put forward specific alternative policies on the size of government, tax rates, deficit spending (or not) or any of the economically-related infrastructure projects I mentioned above.

On Tuesday, the fun continued with the lone Liberal MLA’s budget speech. He also critiqued how the Yukon Party runs the territory, but avoided presenting the specifics of an alternative fiscal policy.

After reading the opposition speeches, my Excel table remained blank. Would they spend more or less? Make taxes higher or lower? Institute a carbon tax or not? Run down the cash reserve faster or slower? Cancel any big projects and replace them with others? Or do they agree with the broad outlines of the Yukon Party’s fiscal policy, but just want to fiddle with the list of projects the cash gets spent on?

It is a time-honoured political strategy for opposition parties to say as little as possible and hope to benefit when voters get tired of the incumbent. It may work for them. But it makes me nervous that I don’t know where the opposition leaders stand on these very important questions after reading their budget speeches.

Perhaps they will tell us more before the next election. I hope so.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He won 2015’s Ma Murray award for best columnist.

Just Posted

X
WYATT’S WORLD

Wyatt’s World for June 16, 2021.… Continue reading

Chief Medical Officer of Health Dr. Brendan Hanley. (Yukon News file)
COVID-19 outbreak surges to 50 active cases in the Yukon

Officials urge Yukoners to continue following guidelines, get vaccinated

Team Yukon during the 2007 Canada Winter Games in Whitehorse. (Submitted/Sport Yukon)
Whitehorse will bid for 2027 Canada Winter Games

Bid would be submitted in July 2022

File Photo
The overdose crisis, largely driven by synthetic opioids such as fentanyl and carfentanil was the topic of an online discussion hosted by Blood Ties Four Directions Centre and the Canadian Drug Policy Coalition on June 8 and 10.
Discussion of overdose crisis in Yukon leaves participants hopeful for future

The forum brought together people including some with personal drug use and addiction experience.

The Yukon has confirmed 33 active COVID-19 cases on June 15. (file photo)
Two participants cross the finish line at the City of Whitehorse Kids Triathlon on June 12 with Mayor Dan Curtis on hand to present medals. (Stephanie Waddell/Yukon News)
2021 Kids’ Triathlon draws 76 young athletes

Youth ages five to 14 swim, run and bike their way to finish line

Lily Witten performs her Canadian Nationals beam routine on June 14. John Tonin/Yukon News
Three Yukon gymnasts break 20-year Nationals absence

Bianca Berko-Malvasio, Maude Molgat and Lily Witten competed at the Canadian Nationals – the first time in 20 years the Yukon’s been represented at the meet

For the second year running, the Yukon Quest will not have 1,000 mile race. Crystal Schick/Yukon News
The Yukon Quest will be two shorter distance events instead of a 1,000 mile race

After receiving musher feeback, the Yukon Quest Joint Board of Directors to hold two shorter distances races instead of going forward with the 1,000 mile distance

Western and Northern premiers met this week to discuss joint issues. (Joe Savikataaq/Twitter)
Premiers meet at Northern Premiers’ Forum and Western Premiers’ Conference

Nunavut Premier Joe Savikataaq virtually hosted both meetings this year

The sun sets over Iqaluit on Oct. 26, 2020. Nunavut’s chief public health officer says two COVID-19 cases at Iqaluit’s middle school came from household transmission and the risk to other students is low. (Emma Tranter/Canadian Press)
Iqaluit school’s contacts and classmates cleared after two COVID-19 cases

With an outbreak ongoing in Iqaluit, the Aqsarniit middle school has split students into two groups

An extended range impact weapon is a “less lethal” option that fires sponge or silicon-tipped rounds, according to RCMP. (File photo)
Whitehorse RCMP under investigation for use of “less lethal” projectile weapon during arrest

Police used the weapon to subdue a hatchet-wielding woman on June 4

Sean Kilpatrick/Canadian Press
Citizenship Minister Marco Mendicino holds a press conference in Ottawa on Nov. 12, 2020. The federal government is announcing that Indigenous people can now apply to reclaim their names on passports and other government documents.
Indigenous people can now reclaim traditional names on their passports and other ID

The move comes in response to a call to action from the Truth and Reconciliation Commission in 2015

Teslin Lake is one of two bodies of water the Yukon Government has place on flood watch. (Google Maps Image)
Flood watch issued for Teslin Lake, Yukon River at Carmacks

The bodies of water may soon burst their banks due to melting snow and rainfall

Most Read