Sask. gov't expects four years of deficits, then surplus in 2024-2025
New $2.1B deficit projection for 2020-21 lower than initial forecast
The Saskatchewan government is projecting deficits until 2024-25, when it is forecasting a $125-million surplus.
Finance Minister Donna Harpauer provided a first-quarter fiscal update on Thursday.
The government is now projecting a $2.1-billion deficit for 2020-21, which is lower than the initial projection of $2.4 billion released in June.
"Saskatchewan's fiscal foundation is solid and our province's economy and economies around the world continue to reopen and recover," Harpauer said in a news release.
"We have seen positive signs in recent months but we are aware that certain sectors and industries continue to face significant challenges."
Thursday's update says revenue is $398 million higher than was budgeted, at $14.05 billion, with $338 million of that due to federal funding from the Safe Restart Agreement. The government is forecasting a "modest" $56-million increase in resource revenue.
Expenses are forecasted at $16.18 billion, an increase of $103 million from the budget. The increases come from $72 million to health, $70 million to municipalities and $35 million for the tourism industry.
The government's COVID-19 contingency fund is now at $160 million, after $40 million was made available to school divisions.
"The health and safety of Saskatchewan people are our highest priorities as we continue to meet the challenge of the global pandemic," Harpauer said.
"Our government is investing in priorities and ensuring the province is well-positioned to recover and return to balance over time."
The province does not forecast revenue to reach pre-COVID levels until 2022-23. Its projected deficits are:
- $1.4 billion in 2021-22.
- $855 million in 2022-23.
- $340 million in 2023-24.
A surplus of $125 million is being projected for 2024-25.
The government said its projections are based on expense growth at 1.5 per cent per year, the reopening of the provincial, Canadian and global economies at their current rates, and mitigating any resurgence in COVID-19.
Harpauer says no tax increases planned
Harpauer said people should not expect "grandiose" spending announcements over the next few years.
She was asked if the public would be OK with "austerity budgets."
"I believe that Saskatchewan people believe we should live within our means and we should put our best efforts into balancing our budgets," Harpauer said.
Harpauer said tax competitiveness "will be more significant than ever before" as jurisdictions compete for investment. She said at this point the government is not projecting any tax increases.
"Our projections are saying there will be no tax increases, so that's the position we have today. Each and every budget is a process and we look at everything every year."
As for jobs, Harpauer said people should not expect to see cuts to cover costs.
"I don't foresee reductions in the public service unless there is some other reason. It won't be to save money."
NDP wants legislation to ensure projections are always included in budget
Opposition finance critic Trent Wotherspoon called the financial update "grossly inadequate."
"It certainly is not a time for more austerity and more cuts," Wotherspoon said.
He said the projections should have been part of June's budget release, which did not have four-year projections.
"These numbers should have been presented as a part of the budget, and because they weren't, we are not able to demand answers about the Sask. Party's plans for austerity," Wotherspoon said.
Harpauer said on Thursday the province had not had enough data to release projections when the budget was introduced in June.
The NDP is again calling for the government to recall the legislature. It wants its questions about the financial projections answered. Last week, NDP Leader Ryan Meili asked for the legislature to resume so the NDP could pose questions about the province's plan to reopen schools.
Wotherspoon said the government should enact legislation to have projections included in every budget.
"We need to legislate minimum transparency standards that would force future governments to provide four years of financial projections in every budget," Wotherspoon said.
The NDP said it also wants to see legislation that would require the provincial auditor to review fiscal and economic projections before a provincial election.