The province is releasing its first quarter update and it shows the deficit now stands at $2.74 billion after a jump of $126 million.
The reason for the jump is the government doing what it can to provide agricultural support to address wide-spread drought conditions.
“Recent commitments to help our farmers through the emerging drought, has affected the province’s fiscal situation,” Deputy Premier and Finance Minister Donna Harpauer said in a release.. “However, higher oil and potash prices and increased federal transfers have helped to combat the increase in the projected deficit.”
Revenue is forecast to increase from budget by about $757 million (5.2 per cent). About $360 million of this revenue increase is from non-renewable resources- primarily due to higher oil and potash prices.
Federal transfers are also up by about $401 million from budget, including almost $132 million for early learning and child care, about $124 million for Saskatchewan’s share of the Helping Our Health Systems Recover program and about $63 million in one-time top-up funding for the Canada Community-Building Fund.
Total expense is up about $884 million (5.2 per cent) from budget. Nearly $707 million of that forecast increase is due to pressures in the agriculture sector and includes higher crop insurance expense of about $588 million (bringing the total crop insurance indemnity forecast to $1.1 billion this year), as well as $119 million to help producers maintain breeding stock and address the high costs they face due to drought conditions.
This has resulted in private-sector forecasters saying the province’s GDP is now expected to grow by 5.6 percent in 2021 and 3.8 percent in 2022.
The government adds Saskatchewan has the lowest net debt to GDP among the provinces, as of March 31, 2021 and that employment in the first seven months of this year is up 2.8 percent compared to this time last year with the unemployment rate going from 9.4 percent to 7.3 placing Saskatchewan fourth lowest amongst the provinces.