In an unprecedented move, the provincial government confirmed on Tuesday it would only cover half of the 1.9 per cent increase it promised teachers as part of its collective bargaining agreement.
Although teachers will still receive the increase, the additional funding will need to be covered by school boards.
Education Minister Don Morgan told reporters that tough economic conditions forced the government to reduce its contribution.
"We're paying for approximately half of the increase, to fund it all the way across the province would cost $18 million and we're paying nine of that," Morgan said.
"We're saying to the divisions, look inward and look to other divisions to find savings, look for economies."
Morgan said the government, which negotiated the contract last year, was still honouring the contract even if school divisions pay a portion of it.
"We entered into the contract in good faith and the teachers that work will continue to be honoured, we are honouring the contract, we are not backing away from the contract," Morgan said.
"But we are saying to the divisions that we have had an unprecedented and unknown drop in revenue and we're saying you have to work with us and find some savings,"
Morgan said the Saskatoon Public and Northeast school districts told the government they could cover the cost without cutting costs in the classroom.
But Saskatchewan School Boards Association president Connie Bailey said the government's late budget would make it harder for school boards to meet their own budget deadlines.
She said the decision could impact future agreements.
"It does have an effect going forward because this is a precedent and we are deeply disappointed as school boards, that they have chosen not to fund this collective agreement," she said.
NDP education critic Carla Beck predicted Saskatchewan schools would have to cut teachers and support staff to cover the additional cost of paying for collective bargaining agreements.
"This government scrapped the mid-year funding adjustment, and since then, Saskatchewan families and educators have seen nothing but cuts and clawbacks," Beck said.