By Thia James

Sask. prepared for oil shock: Wall

Apr 2, 2015 | 6:41 AM

Saskatchewan’s premier admits the shock from the slumping price of oil will be significant, but promises the province will be prepared because of its diversified economy.

Days after Bank of Canada Governor Stephen Poloz said the effect of the “oil shock” is “atrocious” growth in the first quarter, Premier Brad Wall said on Thursday the province has more going for it than just oil. By comparison, the oil shock left the province $700 million short, but Alberta will be $7 billion short in revenue. Oil, he said is a much more important sector for the Alberta economy.

“The forecasters were saying, and we used it in our budget, that our economy would continue to grow. I think some are saying that Alberta might back up a little bit, they think we’re going to continue to grow,” Wall said. He added the forecasters are saying these things because of the province’s diversified economy.

“It’s a serious thing, what’s happening in oil, but we’re lucky, because we’re building a diversified economy,” he said.

Industrial players have been investing in the Saskatchewan economy – Wall pointed to Mosaic’s $1.7 billion investment in a potash-sector expansion, and Evraz announced it is investing $200 million into a Regina steel mill.

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And in a sign of things to come, Wall hinted at a major forestry sector announcement that is set to happen in Carrot River, Sask. on Thursday morning. Wall and Economy Minister Bill Boyd will be making the announcement.

There is strength in certain parts of the forestry sector, Wall said and added there are positive things happening in the sector in that part of the province.

“I think you’ll also see that they’re responding to some of the things we put in our budget to try to attract those who export, who create jobs here, good jobs, and who export out of our province.”

Wall made the comments in Prince Albert after his keynote address at the annual Premier’s Dinner. This year, the venue changed to the Plaza 88 Convention Centre, as he delivered a speech that he warned members of the 400-person audience would be more partisan than Premier’s Dinner speeches past.

Throughout most of the speech, he repeated the phrase, “that’s where the money went,” as an answer to ads featuring opposition NDP Leader Cam Broten in which he asks, “where did all the money go?”

Wall explained why he chose that particular theme for his address.

“Our opposition has raised it, they’ve spent a lot of their party money [o]n advertisements and I’m kind of glad they did, because this is the question that we do want to answer,” he said.

In Prince Albert, he said the money went to revenue sharing and to renovations for Carlton Comprehensive High School’s gym.

During the speech, Wall listed where all of the funds earmarked for big capital projects went in the Prince Albert and surrounding area, including the recent $1.2 million it’s giving the City of Prince Albert to makeover the Diefenbaker Bridge.

The premier then said that in 2003, the City couldn’t get the provincial government of the day to pay for 50 per cent of the bridge’s maintenance costs.

“So that’s where the money went, and if someone comes to the doorstep in the next election and says ‘vote for us and we’ll build you a second bridge, and you won’t have to put any in, the feds won’t have to and we’ll build it all ourselves,’ say, ‘OK, the best indicator of future behaviour is past behaviour, where were you when we needed to just fix the existing we have today in Prince Albert?’”

Wall promised the Prince Albert crowd that the province would be there on a second bridge project, but for the first time, he said he believes the template will look similar to Saskatoon’s commuter bridge project.

The latter revelation was news to Prince Albert Mayor Greg Dionne. He said he thought it was “entertaining,” and it’s the only comment he would have on that at this point.

But he is pleased with Wall’s reiterated support for a second bridge project.

“You heard it, he’s committed to a new bridge. And he’s going to work with us and the federal government to make it happen. And he knows that we’re going through a process, he respects that process and when the time is right, we’ll make the announcement.”

While the premier reinforced the positives, he was also on the defensive when it came to the one-MLA situation in Prince Albert and criticism that the budget the province touted as balanced isn’t really so.

Right now, Prince Albert is represented by only Prince Albert Northcote MLA Victoria Jurgens, after Darryl Hickie left the Prince Albert Carlton seat vacant early in March.

Wall’s office, the caucus and Jurgens will be there for those with questions, according to the premier.

“And we’re a year out from an election, maybe sooner,” he said. This is dependent on when the next federal election is held.

“But we’re going to make sure that the people of Prince Albert are heard loud and clear,” he said.

“Whether or not both MLAs are sitting in Regina or not, we’ll make sure P.A.’s voice is heard.”

Wall also answered questions about the government’s assertion that the 2015-2016 budget is balanced. When it brought down its budget in March, the government announced it would borrow $700 million to finance its infrastructure plans. The oil shock’s effects were felt in the budget, which Wall had described in his speech as the most difficult they’ve ever brought down.

According to the budget document, the money borrowed is expected to have a term of up to 30 years and the province will “take advantage of market opportunities to minimize borrowing costs.”

Wall said rating agencies such as Moody’s have described the Saskatchewan budget as balanced. He likened the province’s borrowing for capital spending to a homeowner who takes out a mortgage and pays their monthly payments and meeting all other obligations.

“Would your budget be balanced? The answer, of course, would be ‘yes?’”

He said the financing for capital is like a mortgage, and said the province is setting aside a payment every year to retire that debt “on time and on schedule.”

When asked by paNOW how aggressive the province can be with payments with the economy where it is now, Wall said the government won’t engage in a mortgage beyond its ability to make all of the payments and know the date by which the mortgage will be retired.

“It’s just like you would, if you can’t afford that mortgage payment, you’re not going to buy the house. That’ll be the case for the government as well.”

tjames@panow.com

On Twitter: @thiajames