Minding the Public Purse: The Fiscal Crisis, Political Trade-Offs and Canada's Future

Abstract

MacKinnon's tenure as minister of finance coincided with a period of fiscal crisis in Saskatchewan. Two Progressive Conservative governments under Grant Devine had from 1982 to 1991 accumulated large amounts of debt and had committed the Government of Saskatchewan to participating in several expensive and risky megaprojects. In conjunction with a sluggish economy these factors combined to seriously stress the finances of the province. By 1993, the province's credit rating was such that it was no longer able to borrow money in Canada and had to go cap-in-hand to the money market in New York. Add to this mix the need to cut tax rates in response to tax competition from Alberta, cuts to federal transfers, and the dumping on the province of responsibility for certain social programs by the federal government, and Saskatchewan was facing a full-blown fiscal crisis. By 1993 members of the Cabinet were even debating the possibility of defaulting on provincial debt. This book is a candid account of MacKinnon's experiences during this turbulent time. As minister of finance, she was at the eye of the fiscal hurricane and she was the person most responsible for determining whether the provincial government's finances would collapse or recover. They recovered.