Sask. projecting $1.04B surplus amid rising resource revenues

Saskatchewan is projecting a $1.04 billion surplus for 2022-23, with a large bump from non-renewable resource revenues projected.

That figure is a $1.51 billion improvement from budget forecasts, which projected a $463 million deficit for the year.

“A strong economy and higher resource prices have meant a significant improvement in the province’s finances. That means we can balance the budget, pay down debt and help Saskatchewan people with the rising cost of living,” Finance Minister Donna Harpauer said.

The province released its first quarter fiscal update on Tuesday morning. The government is projecting $19.17 billion in revenue for the year.

“This is because of a $2 billion improvement in the provincial revenues, largely due to revenue from non-renewable resources mainly potash and oil. While that’s good news, it also means the cost of almost everything you buy has gone up,” Harpauer said.

“These resources belong to all Saskatchewan people. Saskatchewan people should benefit from higher resource prices and higher revenues.”

Forecast expense also rose to $18.13 billion – an increase of $508.2 million.

The province also announced a four part affordability plan, which includes a $500 tax credit cheque for all Saskatchewan residents over the age of 18, and exempts gym and fitness memberships from the planned expansion of the provincial sales tax.

Harpauer said the tax credit cheques are expected to arrive by the end of November. Any adults who filed 2021 income tax returns as a Saskatchewan resident are eligible to receive the funds.

The province said it’s not directing the money to sectors like health care or education because it likely won’t be there in the future.

“We are very, very, very mindful of taking what will be one-time revenue and putting into ongoing year over year operating,” Harpauer said.

“When those resource revenues fall in price, the government is jammed because they have increased their operating year over year costs but they don’t have the revenue to support it.”

Jason Childs, an associate professor of economics at the University of Regina, said he was glad the province did not put this money into yearly programs and isn’t against the $500 cheques.

“There are worse ways to use that money,” Childs said.

“One of the things that would have been very, very tempting and I’m glad they avoided is to spend this money, this windfall, on program spending.”

He said by spending windfall revenue on programs, like healthcare or education, it could put the province in a future deficit situation.

“I would have liked to see more debt retired than cheques written, but retiring debt isn’t as politically popular as handing out money,” Childs said.

The NDP opposition said this announcement comes too late and is not adequate for residents in the long term.

“This was a government that wasn’t honest to Saskatchewan people at budget time and certainly didn’t step up to address the generational cost of living challenge crisis,” NDP MLA Trent Wotherspoon said.

“Instead, [the government] piled on in a nonsensical way with new taxes, hikes to power and energy, no break on the fuel tax - making things worse for Saskatchewan people.”

If the NDP was in power, Wotherspoon said it would have sent a tax credit back to all residents, even children, months ago. He said they also wouldn’t have brought forward new taxes and fee hikes.

“They’re treating people in a way that’s rubbish,” Wotherspoon said.

The finance minister said the government can’t get caught up in the resource revenues being seen right now, so she plans to approach the next budget with as much caution as always.