Imagine watching the person working at your local SGI retailer take $50 from the pile of money you just laid on the counter and walk it over to the office of provincial Finance Minister Ken Krawetz.
You’d probably find that a bit odd. After all, the money you pay SGI each year is meant to cover the costs of insuring your car; why would they be giving part of it to the Ministry of Finance?
However, that is exactly what has gone on in Saskatchewan for decades.
Well, the insurance rep doesn’t literally walk over and hand the government cash like that, but behind the scenes, SGI, and other crown corporation profits are transferred to the provincial government to spend as it sees fit. It’s basically a backdoor tax.
Citizens of Saskatchewan are told that their government must own and control their car insurance company, their telephone company, their electricity company and their natural gas company so that ‘greedy’ corporations don’t come in and gouge customers on products they need every day. (Thankfully they haven’t figured out that we need food ever day or else they might want to run the grocery stores too).
Yet, that is exactly what the government does instead.
Make no mistake, if these crown corporations were allowed to keep these profits rather than hand them over to the government, you’d pay less for these products.
You could have lower car insurance premiums, lower power rate, lower heating costs and lower telephone bills.
The only crown where the goal isn’t to provide the lowest costs is Sask Liquor and Gaming, and hence why the government should either privatize it or at least allow competition. (But that’s a story for another day).
The Canadian Taxpayers Federation (CTF), a non-profit taxpayers’ watchdog group has for years argued the provincial government should keep its paws off those crown profits.
Fortunately, politicians on the opposition side of the legislature have largely agreed with the CTF and have criticized their opponents in government for taking crown profits annually.
Take NDP MLA Trent Wotherspoon’s
recent comments about the Wall government’s financial update. He decried the “raiding” of the crowns and called the process a bit of a “charade.”
However, the same thing went on when the NDP were in power.
In the NDP government’s 2005-06 budget the crowns had a profit of $306 million collectively, but had to give $221 million of it to the provincial government.
Similarly, while in opposition, Brad Wall’s Saskatchewan Party also decried those “dividends,” but has continued to take them since forming government.
Clearly, the challenge is for us to get an opposition party to practice what it preaches while in government.
Perhaps there’s a bit of hope. The Wall government has promised to not take SaskPower’s profits this year; recognizing SaskPower needs the money for new power plants. That’s a good step in the right direction.
What it should do next is protect SaskPower’s profits in legislation through a “Crown Profit Protection Act.” After passing such an Act, it could gradually add other crowns to the list.
In the mean time, next time you see your insurance bill, telephone bill or heating bill rise, ask your local MLA how much of that is going into government coffers through this hidden tax.
Colin Craig is the Prairie Director for the Canadian Taxpayers Federation
