Crop insurance claims push Sask. into record $2.7B deficit: mid-year financial report

The Saskatchewan government projected a record $2.7-billion deficit in its mid-year financial update, which was released Monday morning.

The deficit projection is up by $97 million from the budget forecast, but down $29 million from the first-quarter update.

According to Finance Minister Donna Harpauer, the shortfall is largely due to an expected $2.4 billion in crop insurance claims $1.5 billion of which have already been paid out.

Aside from the crop insurance claims, other expenditures putting pressure on the province's pocket book include $292.5 million in relief for livestock producers, who also faced high costs due to the drought.

"If you backed out the expense of crop insurance that $2.4 billion as well as the livestock producer support, we would almost be balanced," Harpauer said during a news conference Monday.

"That's how significant that support was for agriculture producers."

On the health front, the province is anticipated to spend an additional $250 million on "pandemic and drug plan pressures," and another $100.9 million in a "Protection of Persons and Property expense" due to recent wildfires and the continued toll of COVID-19.

The Opposition NDP says it would like to see a better breakdown of those costs including how much the province is paying to send ICU patients to Ontario for care. Harpauer said Monday that cost is still unknown.

"The numbers are vague, but what's very clear is that our provincial finances have taken a serious hit as a result of the Sask. Party's mismanagement of COVID-19," Trent Wotherspoon, the NDP's finance critic, told reporters after the financial briefing.

The total expense forecast sits at $2.5 billion 14.6 per cent more than planned in the budget.

Harpauer said the government didn't need to cut spending from anywhere to make up for these expenditures, saying that it used funds from taxation, federal government transfers and resource revenue.

Forecasted revenue up $2.4 billion

The mid-year financial report also shows the province is set to see $2.4 billion (16.5 per cent) in revenue, due partly to higher potash and oil prices.

"Will it hold? We rely on the industry to give us those numbers," Harpauer said. "We're hearing projections from the oil industry that they think these numbers will stay strong for some months to come, but we've all seen that crash so I wouldn't predict a thing."

The tax revenue projection is up $616.7 million from the budget as well. The government attributes that number to higher personal and corporate income tax, due to higher 2020 assessments and an increase in provincial sales tax.

Wotherspoon said a spike in revenue especially when it comes to the non-renewable resource sectoris encouraging, but he wasn't hopeful the money would be spent to his party's liking.

"We have a government that's squandering that opportunity and failing to put us in a position of strength because of their mismanagement," he said. "It's cost people their lives and it's hit our public finances and our economy hard."

Wotherspoon also said the province's job numbers are lower than the NDP would prefer.

The mid-year financial report shows Saskatchewan sawa 2.5 per cent increase in jobs (13,730 more) over the last 10 months compared to the same period last year.