|Political right demonstrated against Medicare|
They were replaced by the “free market” Liberal Party between 1964 and 1971. But little changed in the province. In the election of 1971, the NDP again swept back into office under the leadership of Allan Blakeney. This new NDP government engaged in “province building,” introducing policies which began to transform the ownership and control of the natural resource sector of the economy. Resource royalties were raised significantly, capturing more of the economic rent for the people of the province. A number of Crown corporations were created, demonstrating that the people of Saskatchewan were fully capable of running their own affairs.
From 1982 to 1991 Grant Devine’s Progressive Conservative Party formed the government. They reversed the course, implementing a neoliberal strategy modeled after that of Margaret Thatcher’s Conservative government in Great Britain and Ronald Reagan’s Republican administration in the United States. Devine’s government began to privatize most of the Crown corporations in the natural resources sector. But when they moved to split the natural gas sector from the Saskatchewan Power Corporation and privatize it, the general public rose in opposition. The Saskatchewan Coalition for Social Justice took a strong public stand against the Devine government, organizing actions and demonstrations, which boosted support for the NDP. The October 1991 election returned the NDP to government, backed by a majority of the voters.
The NDP Makes a Great U-Turn under Roy Romanow
The general public, and those who voted for the NDP, expected the new government to return to the progressive social democratic tradition of the Saskatchewan NDP. But the new leader, Roy Romanow and his key cabinet associates, had a very different agenda. It involved a radical departure from the policies of previous CCF-NDP governments.
First, the NDP government contracted with Westmount Research Consultants to poll the general public on attitudes on policy options. The results released in November 1991 were clear: the public expected a real change in direction from the Devine years. The top priorities were seen to be job creation and combating hunger and poverty. The majority opposed cutting public services. There was no concern expressed about the budget deficit or the provincial debt.
As former finance minister Janice McKinnon reports in her memoire, something had to be done to “curb the appetite” for new programs and spending.. The Romanow government was planning a “very tough 1992 budget,” and the public had to be warned. John Penner, the new Minister of Energy and Mines, proclaimed that there would be no increase in resource royalties and no attempt to take back public control of the privatized Crown corporations, a flat repudiation of NDP policy and campaign promises.
The Romanow government appointed the Financial Management Review Commission, headed by Donald E. Gass, an accountant with Deloitte and Touche. By employing accounting techniques never used before in an assessment of a government’s fiscal condition, Gass came up with a total accumulated debt of $8.9 billion, including Crown corporations, twice the estimate set by the Devine government. The report concluded that the economy of Saskatchewan “can no longer support the public sector infrastructure that we have built to serve the quality of life and standard of living we have come to expect.” This was just what the Romanow government wanted. The report was praised by all the prominent business organizations and the Fraser Institute.