Saskatchewan’s Big Budget Deficit
CBJ — Saskatchewan is facing a $434 million deficit due to weak crude oil and potash prices.
Premier Brad Wall’s right-leaning Saskatchewan Party government plans to spend $14.5 billion on revenue of $14 billion in Canada’s biggest canola- and wheat-growing province. Both figures are up 1% for the year that began April 1.
“There are years when unforeseen events – drops in the price of oil or potash, or costly natural disasters – make it prudent to run a manageable deficit rather than implement severe cuts to programs and services or increase the tax burden,” Finance Minister Kevin Doherty said in a statement. “This is one of those years.”
For fiscal 2015-16, which ended March 31, Saskatchewan ran a $427 million deficit, its first in two decades. The Sask Party government plans to return to a surplus in 2017-18.
Saskatchewan’s real gross domestic product will grow 0.4% in 2016, the third-slowest among the 10 provinces, due to its ties to the slumping energy sector, according to a TD Economics forecast in April.
Revenue from non-renewable resources, which includes oil and potash, is forecast to fall 19% in 2016/17 to $1.5 billion, the lowest in 13 years.Saskatchewan, with a population 1.1 million, expects total public debt to climb to $14.8 billion, up $1.2 billion, by the end of the fiscal year on March 31, 2017.
Neighbour province to the east Manitoba has forecast a $911-million deficit for this year.