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Saskatchewan Premier Roy Romanow's resignation this week has sparked an outpouring of comment about his legacy as a leading voice in federal-provincial negotiations and as a strong defender of Canada's health care system.

His economic innovations have been mentioned only in passing, which is entirely inadequate. Mr. Romanow's tough fiscal policies are his greatest legacy to Saskatchewan and provided a model that was copied repeatedly by other debt-laden provinces throughout the 1990s.

Looking back at a time when politicians are tripping over themselves to promise bigger and bigger tax cuts, it seems incredible that Mr. Romanow won respect in Saskatchewan when he raised taxes and imposed an economic austerity program after his landslide election in 1991.

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The province was virtually bankrupt after a decade of financial mismanagement by Grant Devine's scandal-plagued Conservative government.

When Mr. Romanow was elected, the province had an accumulated debt of $15-billion and an annual deficit of $852-million. Its credit rating had been downgraded sharply and it had the highest per capita debt in Canada.

Mr. Romanow's "third way" pragmatic solution (championed before Tony Blair's Labour Party in Britain picked up the cry) was to raise taxes and cut costs, including the closing or conversion of 52 community hospitals and cuts to universities. User fees for provincially operated utilities soared, he froze civil service wages and implemented various "pullbacks" in provincial funding.

But the austerity worked. Mr. Romanow had the budget balanced by 1994, and has now tabled seven successive balanced budgets. Surpluses have been used to so far pay down about $4-billion of the accumulated debt, and Mr. Romanow has also cut taxes.

Granted, there were furious protestations, especially over the hospital closings, and taxes are still higher than in wealthier provinces like Ontario and Alberta. But his government was nonetheless re-elected in 1995 and 1999, although only with a minority government last time. In the end, many seemed to grudgingly accept the need for sacrifices -- an attitude that seems unimaginable in a province like Ontario.

Mr. Romanow, of course, didn't invent conservative socialism. The CCF/NDP history in Saskatchewan has always had a pragmatic streak.

Mr. Romanow argues that his famous CCF predecessor, Tommy Douglas, was in office for 18 years before introducing medicare in Saskatchewan because he wanted to be sure the province could afford the cost. Allan Blakeney, NDP premier from 1971 to 1982, tabled 11 successive surplus budgets.

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But for the most part, the NDP tradition in Saskatchewan and Manitoba has been unique. The federal NDP has never embraced the prairie model, in part because there has been strong opposition from labour. Provincial NDP governments in British Columbia and Ontario have also been happy to run huge budget deficits.

Perhaps the stronger economies and greater wealth in those provinces have allowed the luxury of free-spending governments. But it has also contributed to a general mistrust of NDP rule in many other parts of Canada.

In a recent essay in The Globe and Mail, Mr. Romanow argued that there is not an inherent contradiction between his economic policies and socialist principles. He argues that fiscal conservatism was a means to an end, allowing his government to afford to be a positive force in society: "The reason we sacrificed so much in the early years of our administration was to ensure that we could one day rebuild the social and physical infrastructure of the province."

Mr. Romanow has made enemies and was lucky to govern at a time when the provincial Conservative opposition collapsed as a party. He has alienated rural voters in Saskatchewan and lost support from NDP traditionalists, especially for his handling of a provincial nurses' strike.

But his economic record is still honourable, and it's probable the full extent of his accomplishment will only become clear in hindsight. Whether it's appreciated or not, Saskatchewan narrowly dodged disaster, and Mr. Romanow deserves credit. Janet McFarland's e-mail address is jmcfarland@globeandmail.ca

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