Sask. deficit forecast up from budget despite revenue growth
Despite a boost in revenue for 2021-22, Saskatchewan’s deficit is expected to be higher than forecast in the budget due to fiscal challenges created by the drought this past summer.
The Government of Saskatchewan presented a mid-year update to its projected financial numbers on Monday morning.
The province’s deficit is now forecast at $2.7 billion, up $97 million from the budget. That deficit figure improved $29 million from first quarter projections.
The government said drought supports for farmers offset the strong mid-year revenue growth. Total expense is forecast to rise by $2.5 billion, including $1.8 billion for crop insurance claims. The total crop indemnity is projected at $2.4 billion for 2021-22.
"The drought was unforeseen and farmers were hit hard this spring and summer," Deputy Premier and Finance Minister Donna Harpauer said.
"Our government is here to provide support to Saskatchewan people when they need it. Absent the drought, we would have seen a significant improvement from budget and a much lower deficit, based on stronger revenue across all major categories."
The higher expense forecast also includes a $250 million rise in health spending from budget due to pandemic and drug plan pressures, and $100.9 million in Protection of Persons and Property expense due to support for victims of wildfires in the spring and summer.
Revenue is projected to increase by $2.4 billion, or 16.5 per cent. The province said it saw significant increase in all revenue categories, including $668.8 million from non-renewable resources due to high potash and oil prices.
The province’s GDP is expected to grow by 3.6 per cent in 2021 – up from the budget forecast of 3.4 per cent.