Saskatchewan just announced that $137.00 per household, through the phone bill, will be rebated to Saskatchewan citizens “for appreciation of utility use”. This payment is funded by SaskEnergy for electrical and gas usage. Naturally, the payment is independent of usage because it is equal for everyone (except for businesses who are exempt).

This strategy has been employed in the past by Alberta. It is as bad now as it was then.

In theory, the payment is good. The payment is from a Crown Corporation and the citizens indirectly own the Crown Corporation. They are merely benefiting from their ownership. In reality, it is just bad policy. The bleeding of over $100 million, directly from the reserves of the Crown Corporation, a Crown Corporation with corporate debt and a Crown Corporation directly connected to a provincial administration with $9 billion in debt, is just plain wasteful. At least the Alberta rebate was done during a time when debt elimination was within 3 years. Saskatchewan won’t get out of debt for another 2 generations.

Crown Corporations exist to provide a competitive service (if you believe they should be owned by government at all). They don’t exist to provide direct public cash dividends. The Saskatchewan raiding of corporate reserves, like the identical actions taken by Manitoba counterparts (of Manitoba Hydro reserves), eventually makes the Crown Corporation less competitive and less responsive to timely capital upgrades.

D’Arcy Barker is a Chartered Financial Planner and Registered Employee Benefits Consultant- www.barkermoney.com

E-mail: ReduceYourTaxes@barkermoney.com