Sask. finance minister to provide an update Friday amid fiscal uncertainty

Saskatchewan's Finance Minister Donna Harpauer will provide an update on the province's financial position on Friday.

COVID-19 and economic situation could have Sask. headed for $1B deficit: analysts

Donna Harpauer, Saskatchewan finance minister, announced on March 18 that due to COVID-19, its full budget would be postponed to a later date. Harpauer will provide details on the province's financial position on Friday. (Michael Bell/The Canadian Press)

Saskatchewan's Finance Minister Donna Harpauer will provide an update on the province's financial position on Friday.

The update comes on the heels of reports outlining the economic impact of COVID-19 and low oil prices on the provincial economy.

"Certainly the COVID-19 pandemic is having an impact on all jurisdictions' economies and finances, across Canada and throughout the world," Harpauer said Thursday.

"Saskatchewan is in a strong position to manage through these challenges, however, there are many unknowns."

On March 18, Harpauer released a partial budget document showing the province's spending plan for 2020-21 but did not include a revenue forecast.

At that time, the government said it had a "has a very strong cash position" and could borrow due in part to its strong credit rating.

Moody's holds Sask. credit rating

On Tuesday, Moody's Investor Service released its Credit Opinion, maintaining Saskatchewan's AAA stable rating.

Moody's based its rating, in part, on:

  • Solid reserve levels from cash and investments.
  • Very strong debt affordability.
  • Solid liquidity.
  • Forward-looking planning.

"Our liquidity, the cash we have maintained and our ability and capacity to borrow is very important, as the pandemic is having an understandable impact on our finances," Harpauer said.

"The Bank of Canada introduced a provincial bond purchase program yesterday, which will improve every provinces ability to borrow at sound interest rates."

The government said that — when combining Moody's rating with AA ratings from S&P Global Ratings and DBRS Morningstar — Saskatchewan has the second-highest credit rating in Canada.

DBRS said in its March report Saskatchewan was better placed than Alberta and Newfoundland to deal with the economic uncertainty.

"Saskatchewan's budget was balanced before the economic shock, its O&G [oil and gas] industry is relatively less important to its economy, and O&G royalties account for a smaller share of its revenue," the DBRS report said.

Moody's said that though non-renewable resource revenues accounted for 12 per cent of government revenues in 2019-20, the oil price plunge of March will have an impact.

"Our current base case is for oil prices to average $40-$45/bbl in 2020, returning to $50-$55/bbl in 2021. These figures are significantly below the province's previous projection of $57/bbl for 2020 and $62/bbl for 2021," the report said.

Moody's estimated the province's deficit was 8.1 per cent of 2019-20 revenue.

DBRS said, "the deficit on an adjusted basis would exceed 1.5 % of GDP."

Those figures put Saskatchewan's 2020-21 estimated deficit at approximately $1.2 billion.

Saskatchewan Opposition Leader Ryan Meili said his focus is on those impacted by the financial troubles hitting the province.

"We have seen a projection of a loss of revenue of $1.2 billion, obviously, that's very significant," he said. 

Meili said the deficit could be even larger because expenditures will likely be higher than projected

"I think one of the wisest things we can do is use this moment to take advantage of what governments can do, that people can't: to borrow at low-interest rates, to borrow large amounts and to invest in the people of the province." 

Conference Board of Canada predicts 5 per cent plunge in Sask. GDP in 2020

On Wednesday, the Conference Board of Canada released its spring 2020 outlook for Saskatchewan.

It is estimating a five per cent decline in the province's GDP this year.

The report said school closures and social gathering restrictions were necessary but "will hurt economic growth in the near term."

The Conference Board of Canada's spring outlook for Saskatchewan shows provincial GDP plummeting in 2020. (The Conference Board of Canada)

"Employment in the province is expected to fall by 2.8 per cent this year. By industry, we expect to see the largest job losses in the arts, entertainment and recreation, and accommodations and food sectors."

The report expects both GDP and employment to rebound in 2021, by 5.4 and 2.9 per cent respectively.


Adam Hunter


Adam Hunter is the provincial affairs reporter at CBC Saskatchewan, based in Regina. He has been with CBC for more than 14 years. Follow him on Twitter @AHiddyCBC. Contact him:


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