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Saskatchewan is starting the 2024-25 fiscal year forecasting a $354-million deficit by year’s end — $80.6 million more than first anticipated.
That’s according to the first-quarter financial report published Thursday morning by the provincial government, which detailed a 0.9-per-cent increase in expenses, outpacing a 0.5-per-cent increase in revenue.
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However, outgoing Finance Minister Donna Harpauer says the Saskatchewan economy continues to be “strong.”
“Our government will continue to carefully manage spending while maintaining our commitment to make record investments in priority programs and services, to ensure strong and vibrant communities,” stated Harpauer in a news release.
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Highlighted in the release was a new contract ratified between the province and the Saskatchewan Government and General Employees’ Union (SGEU). At the end of the first quarter, provincial expenses are “forecast to increase $172.5 million,” with “an estimated $133.8 million” of that coming from the contract, the report notes.
In addition, financing charges are forecast to increase by $38.7 million due to an earlier issuance timeline for 2024-25 debt to take advantage of favourable market conditions.
Harpauer said in the release there was a “decline in net debt,” but the update shows total gross debt increased to $35.2 billion, up by $401 million from initial projections in March. Self-supported debt increased by $404.3 million, or 2.9 per cent.
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Taxpayer-supported debt “is virtually unchanged from budget,” and the projected net debt to gross domestic product (GDP) is set to come in at 13.4 per cent instead of 14 per cent.
Regarding debt to GDP, Saskatchewan is “the second-best performer under this key fiscal health metric in Canada,” according to the Ministry of Finance.
“Gross debt is borrowings through the issuance of debt instruments… Net debt represents the future revenue required to pay for past transactions or events.”
At the end of the last budget cycle, the province adjusted an initially projected surplus of $1 billion, knocking it down to a much smaller surplus of $182 million.
Speaking at a campaign event in Saskatoon on Thursday, Opposition Leader Carla Beck pointed to “the history” of the NDP “when it comes to debt.” She also called attention to the record of the current government, saying it promises every year to balance the budget “only to have that updated to find out that we’re in a deficit position.”
The provincial general election is set to take place on or before Oct. 28.
At the end of the first quarter, potash prices in the American and Canadian markets are below projections set at budget time. Prices are $27 and $60 below estimates, respectively — a modest decrease in anticipated profit from potash. At the same time, there is better-than-anticipated performance in the oil sector with WTI trading above projections.
Projected tax revenue from potash is expected to be down by $131.4 million, according to the report. Oil and gas is projected to bring in $100.2 million above anticipated targets, which works out to a projected $14 million decrease in the non-renewable revenues.
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