Sask. deficit forecasted at $2.7-billion with mid-year report

The Saskatchewan government’s mid-year-report shows a forecasted deficit of $2.7-billion, up $97-million from the last budget, but an improvement of $29-million from the first quarter of the province’s fiscal year.

Widespread drought this past spring and summer meant that significant financial support was needed for the agriculture sector, which the province says offset strong revenue growth.

“The drought was unforeseen and farmers were hit hard this spring and summer,” Deputy Premier and Finance Minister Donna Harpauer said in a release. “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.”

“This is largely due to a 1.8 billion dollar increase for crop insurance claims, bringing the total crop insurance indemnity forecast to 2.4 billion for 2021-2022.” added Harpauer

There is some optimism with the budget with the removal of the agriculture from the equation according to the Finance Minister. “But if you backed out the expensive crop insurance, the 2.4 billion as well as the livestock producers support we would almost be balanced.”

Revenue is currently expected to increase by 16.5 percent, with significant increases across all categories including $668.8-million in non-renewable resource revenue due to higher potash and oil prices.

Spending is forecasted to also up up $2.5-billion from budget, due to $1.8-billion for Crop Insurance claims, bringing the total crop insurance indemnity forecast to $2.4-billion for 2021-22.

There is also $292.5-million in relief for livestock producers who faced high costs due to the drought.

Health expense is forecast to be up $250.0-million from budget due to pandemic and drug plan pressures.

The government is confident that it will be able to return to a balance budget by 2026-27 according to Harpaurer. “We have seen more than 10 billion dollars in private sector investment announced just in the past number of months, which we know will help fuel growth. Additionally Saskatchewan’s economy has performed better than originally anticipated than the April 2020-21 budget. ”

The Provincial Opposition say the mid year report is an example of the Saskatchewan government mishandling of the COVID-19 pandemic.

Finance Critic Trent Wotherspoon feels the mid year report shows a drag in the economic recovery.

Wotherspoon says the provincial government is out of touch with the residents of Saskatchewan. “If the government had contained COVID, we would be in a such better place here today and that comes to our public finances, when it comes to our economy and when it comes to Saskatchewan people receiving those surgeries and those transplants and those procedures when they needed them.”

There is a lot of cost inside of the report according to Wotherspoon. “Beyond the inexcusable the horrible human cost that’s already accounted for, big financial costs for the Saskatchewan treasury and a serious cost to our economy, a serious hit to our economy that really cost Saskatchewan people the job opportunities that they deserve.”

The finance critic is encouraged by the revenue that was generated by several sectors in the province specifically non-renewable resources.

The provincial NDP says they have been advocating that the drought be treated as an emergency since its early stages. Wotherspoon says the Saskatchewan government failed to fix the business risk management programs going into the drought. “We had been pushing hard for programs like Agri-Stability to be fixed. Producers were united , the federal government was at the table but the Saskatchewan government left producers high and dry on this front.”

Another change the Provincial opposition have been pushing for according to Wotherspoon the Farm and Ranch Water program since it shuts out producers because the threshold of income is too high.

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