Wed. Feb 28th, 2024

Instead of a surplus, Saskatchewan expects a $250M deficit

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According to Saskatchewan Finance Minister Donna Harpauer, drought has reduced expected agricultural production by 20% in 2023 compared to 2022. (File photo)

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Saskatchewan expects a projected deficit of $250.5 million at mid-year, according to the 2023-2024 financial report presented Monday. This decline is due, among other things, to the fall in potash prices and sales as well as the drought which affected part of the province.

The decrease in revenue represents a decrease of approximately $1.3 billion from the budget presented in March and $736.1 million from the first quarter forecast.

The province says the price of potash fell 28.6% and its production saw a decline of 5.9%.

< p class="StyledBodyHtmlParagraph-sc-48221190-4 hnvfyV">Due to Western sanctions in response to Russia's invasion of Ukraine, potash from Russia and Belarus is being transported […] notably to China and India, which has caused fall in potash prices and sales, says Saskatchewan Finance Minister Donna Harpauer in the report.

She also indicates that drought reduced forecast agricultural production by 20% in 2023 compared to 2022, leading to increased crop insurance applications.

However, the financial report indicates that at mid-year, total revenues are expected to increase by $35.2 million, or 0.2 percent, over budget.

Projected revenue increases of $753 million come largely from taxes, including the corporate income tax and the tax. provincial sales (TVP), notes the report.

Revenues from oil and natural gas and the sale of Crown lands also increased compared to budget forecasts.

However, these various increases are largely offset by a decrease of $717.8 million in expected revenues from non-renewable resources.

The financial report also projects total spending to increase by $1.3 billion at the halfway point of the year compared to budget.

The province says agriculture-related spending is expected to be $853 million higher than forecast, mainly due to increased crop insurance claims. p>

Expenses for wildfire response and evacuations are also higher than expected, government says.

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The decrease in revenue represents a drop of about $1.3 billion from the budget presented in March, according to the province. (File photo)

Gross debt is expected to be $31.6 billion at the end of the fiscal year , which is $709.5 million more than expected.

The plan to repay up to $1 billion in debt in 2023-2024 remains unchanged at mid-year, the province assures. The government intends to achieve its objectives through “sound budgetary management and surpluses from the previous fiscal year.”

The net debt of Saskatchewan as a percentage of GDP is expected to stand at 13.3% at the end of the fiscal year, placing it second to last among Canadian provinces.

According to the report, the unemployment rate was 4.4% in October 2023, the lowest rate among the provinces and well below the seasonally adjusted national average. Saskatchewan saw the strongest economic growth among provinces in 2022, with real GDP growth of 6%.

Growth is forecast to The province's economy is expected to rank second among provinces for each of the next two years, with real GDP growing by 1.6% in 2023, and 1.3% in 2024.

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