​Saskatchewan Premier Brad Wall says his government is facing what he calls "serious revenue shortfalls" and will run a deficit this fiscal year and next.

Wall told the Saskatchewan Urban Municipalities Association that there isn't much room for the government to make cuts, and that the struggling energy sector is partly to blame for the financial situation. 

He said that left two choices: raise taxes or run a deficit — and the government opted for the deficit.

"I just don't want to increase taxes on an economy that has its energy sector challenges. I don't think that the timing for that is right," he said. 

"We don't want to cut anymore than we've reduced spending already, and so we've made this last-resort decision."

Wall said that if re-elected, the books will be balanced for the 2017-18 fiscal year.

The province had already moved away from a projected surplus to a $262-million deficit when it presented a budget update last fall.

The finance minister said at the time his goal was still to balance the books, but warned that falling resource revenue was going to make that a tough challenge.

Last month, Finance Minister Kevin Doherty also raised the possibility of a deficit in an interview with Morning Edition host Sheila Coles.