Saskatchewan's first quarter budget report shows $126.5M increase in deficit

The Saskatchewan government released its first quarter update for the 2021-22 annual budget on Thursday, revealing a deficit projection $126.5 million higher than originally anticipated.

The deficit is expected to reach $2.74 billion by the end of March. That's the highest the province has ever seen in its history.

The province said the hot weather, which has hurt the agricultural industry, is the reason for the additional debt. Expenditures increased in part because of $707 million in financial support given to Saskatchewan farmers, who have struggled with hot and dry conditions marring their yields.

"All of that can quite frankly be attributed to the disastrous year that our agricultural producers are experiencing. We are projecting that there will be crop insurance claims increased by $588 million," Finance Minister Donna Harpauer said.

On top of the the crop insurance, the province set aside another $119 million for producers to maintain breeding stock and for other financial hardships.

That forecasted financial support weighed heaviest on the province's bottom line, followed by $113.9 million more put toward the education sector.

While the province is forecasting $757 million more in revenue than the budget anticipated thanks to federal support and nonrenewable resources like coal and potash it doesn't offset the increases in expenditures.

Harpauer said that the federal government has "stepped up" to be partners with the Saskatchewan government on Livestock Drought Assistance program, which would mean the cattle producers will receive $200 per head in support.

She said besides the partnership, the government isn't asking for any additional assistance from the federal government at the moment.

Harpauer is still hopeful about the potential of investments coming into Saskatchewan.

"With agriculture, hopefully it's just one year and it will be back to being our strength and our shining light for budgets in thefuture," Harpauer said.

"What's very encouraging is the amount of investment we've seen coming into our province, the confidence that outside investors and corporations are seeing in the province."

She said almost $10 billion in the private sector investments have been announced for the coming year, which means more activity in construction and further spin off to sectors like supply, housing and restaurants.

As per the quarterly update, federal transfers are also up by about $401 million from budget, including almost $132 million for early learning and child care, about $124 million for Saskatchewan's share of the Helping Our Health Systems Recover program and about $63 million in one-time top-up funding for the Canada Community-Building Fund.

The increased deficit did not sit well with the Opposition NDP's finance and agriculture critic, Trent Wotherspoon, who told the media he didn't like what he was seeing.

Wotherspoon said the provincial government has been missing in action and that the Saskatchewan party is a "train wreck" when it comes to finances.

"We see a government once again that plays fast and loose with the finances, that just can't be trusted with our finances, that is bringing in dollars from the federal government and seeming to sit on those dollars again," Wotherspoon said in reference to the funding Saskatchewan received last year from the federal government.

He said the government is failing Saskatchewan people.

"We've seen a government that has taken the summer off. We see a financial report that doesn't rise to the occasion with the challenges we face across Saskatchewan, doesn't rise to occasion with respect to the fourth wave of COVID-19," he said.