Revenue from non-renewable resources, taxes make Sask. deficit $1.14B lower than projected

Saskatchewan's Finance Minister Donna Harpauer released the year-end financial report for 2021-22 on Thursday, showing the deficitended up being $1.14 billion lower than projections.

The 2021-22 budget forecasted a $2.6-billion deficit, the largest total in provincial history. That projection grew to $2.7 billion at the mid-year financial update in November.

In March, when the 2022-23 budget was released, Harpauer said the deficit would be smaller than projected thanks to higher oil and potash prices and rising revenues from taxes.

On Thursday, Harpauer's final update for 2021-22 showed a deficit of $1.47 billion.

"Saskatchewan's improvement through the fiscal year and our government's strong financial plan has the province back on track," Harpauer said.

She said tax revenue, which was up nearly $1 billion from the budget projection, is a good indicator the province is emerging well from the pandemic financially.

"All levels of taxation were far above what we had anticipated, not above pre-pandemic levels, but the fact they were so strong is a direct indicator that our economy recovered deeper and faster," Harpauer said.

During November's mid-year update, Harpauer said "we would almost be balanced" if not for the drought experienced in 2021 and the resulting crop insurance claims and livestock supports.

On Thursday, she said the drought played a significant part in how the province's finances ended the year.

"We still have a substantial deficit largely due to the crop insurance claim. It was the highest in the history of the province, $2.5 billion. We had that in the account, we did not have to borrow for crop insurance."

Revenue

Total revenue for 2021-22 was $18.14 billion, up $3.66 billion from the budget projection:

• Non-renewable resource revenue was $2.92 billion, an increase of $1.59 billion from budget.
  • Potash revenue was $1.27 billion.
  • Oil and natural gas revenue were $1.01 billion.
• Taxation revenue was $8.20 billion, an increase of $964.26 million from budget.
• Federal transfer revenue was $3.46 billion, an increase of $551 million from budget.

Expenses

Total expenses for 2021-22 were$19.6 billion, up $2.52 billion from budget:

• Agriculture expenses were$3.19 billion, an increase of $2.32 billion (263 per cent) from budget.
• Health spending was $6.88 billion, up $348 million from budget.

Saskatchewan's public debt came in at $27.24 billion, $529 million lower than the budget projection.

"As government [we]needed to borrow less, largely due to a lower deficit," Harpauer said.

Opposition says govt. should provide relief for inflation

In response to the financial update Opposition finance critic Trent Wotherspooon said Saskatchewan people are facing "an extraordinary situation" when it comes to increases in the cost-of-living.

"The reality is Saskatchewan people are rolling into Canada Day with a 40-year high on inflation."

Wotherspoon said Thursday that the government has the fiscal capacity to pass savings on to the Saskatchewan people due to "windfall revenues" from high commodity prices.

He called on the province to "immediately scrap that nonsensical increases and new measures around the PST. And to immediately deploy a cost-of-living and fuel rebate. And to immediately suspend the fuel tax for the summer months of $0.15 per litre."

Wotherspoon said the government should also "step-up" and provide $50 million to school divisions facing budget deficits.

When asked about the potential for cost-of-living rebates, Harpauer said the government would wait until August when it releases its first-quarter financial update.

"We are not going to spend what we're not assured won't be there."