After projecting a surplus in the spring budget, the Saskatchewan government now says it's expecting a $292-million deficit.
"While it's concerning, obviously, it is manageable," Finance Minister Kevin Doherty said Monday. "We've seen this in years past where the volatility in our revenue sector and what have you has demanded that government take action on the expenditure side. And that's exactly what we intend to do before the end of this fiscal year."
According to the government's first-quarter financial update, a drop in oil revenue plus an increase in spending to fight forest fires is responsible for much of the red ink.
When the budget was released in March, the province had projected a $107-million surplus.
However, since then the price of crude oil has dropped and unprecedented forest fires have raged across northern areas.
The province estimates it will spend about $100 million more than originally budgeted on wildfires. Other expenses that are higher than expected include flood costs and additional expenditures for family services and people with disabilities.
The government is predicting its revenues based on a West Texas Intermediate oil price of $49.50 US per barrel, down from $57.15.
Along with lower oil revenues, the province is forecasting decreased revenues from taxes, Crown land sales, uranium and coal. On the plus side, potash revenues are projected to be higher.
Doherty said the government will try to bring the province's finances back to balance by the end of the fiscal year, which ends on March 31, 2016.
"All ministries, Crown corporations and all government agencies are exercising spending restraint while ensuring we continue to provide vitals services," Doherty said.
Doherty also noted that the shortfall, for now, is a small percentage of the government's overall budget.
"On an over $14-billion budget, a $292-million deficit at this point in time, if the fiscal year were to end as of June 30, is about two per cent of our overall budget," he said.
In another development, the Government of Alberta announced today it is now on track for a $5.9-billion deficit.