The Saskatchewan government indicates that it will sell 60 per cent of the Information Services Corporation (ISC) for up to $120 million and invest these proceeds in infrastructure. In doing so, it will lose 60 per cent of ISC’s $17-million annual profit: over $10 million per year.
The provincial government can borrow at a long-term bond rate of three per cent. Financing $120 million of infrastructure investment at that rate would cost below $4 million per year.
Why would the government give up $10 million of revenue to save $4 million of interest costs? Selling ISC appears to reflect an ideological desire to privatize something rather than sound fiscal management.
Erin Weir - Saskatchewan NDP Leadership Candidate