Wednesday, July 13, 2005

SK: Government opens a union-sized can of worms

For readers across Canada, a little background. In the 2004 budget the province raised our provincial sales tax by one percentage point. It was a "tough budget," the government said. Restraint was required, it was said.

Most pundits and analysts agree the last election was the Saskatchewan Party's to win. Out came the medi-scare and crown-scare, and poof went the Saskatchewan Party advantage. The NDP won on a platform that was everything to everyone, even promising to "continue lowering taxes."

Barely 6 months later the NDP's budget raised the sales tax and introduced, for "balance" we suppose, a 0-1-1 three year wage mandate for public sector unions. Since that time oil and gas revenues have soared and the province has torn up the 0-1-1 wage mandate. The PST hike remains.

We supported the 0-1-1 wage mandate because public sector wages have been rising faster than inflation for more than a decade. Making matters worse, since Calvert took over the government has been on a serious hiring binge -- growing the civil service by thousands.

In the Star Phoenix interview linked previously, I also commented on the danger of committing one-time oil and gas revenues to salary increases that we have to pay forever, but it didn't make the story. Once we pump the oil and gas out of the ground and exchange it on the open market for cash, it's gone forever. Using windfall revenues as justification for salary increases is asinine.

The only ethical use of one-time revenues is for debt relief, tax reductions or savings.

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