Sask. government surplus forecast plummets by $532M

In a first quarter fiscal update, Saskatchewan slashed more than half of its billion-dollar surplus projection.

Earlier this year the government said it was expecting a $1 billion surplus thanks to strong resource-related revenues.

However, on Thursday the province said it is expecting a $532 million drop in that projection due to the need to budget for potential pension costs and a busy wildfire season.

In a news release, finance minister Donna Harpauer said the province's finances are still in a "strong position."

"The forecast, however, clearly demonstrates the need to be prudent and manage spending carefully, as resource revenue is volatile and forecasts can change quickly due to global impacts on prices and production," Harpauer said during a news conference in Saskatoon.

The provincial government says it saw a nearly $529 million decline in the money collected from the non-renewable resource sector.

At the same time, the province said the drop was "largely offset" by a $405 million increase in other revenue, including PST revenue.

Despite the adjusted forecast, the government is still sticking to its plan to pay down $1 billion in debt.

"We will continue to pay down operating debt, as planned. We're able to do so because higher opening cash balances due to a strong year-end in 2022-23 have offset the drop in the projected surplus," Harpauer said.

Harpauer estimates the plan to pay down the billon-dollar chunk of debt will save $110 million annually in interest payments.

The provincial government says its projected debt-to-revenue ratio is ranked second-best among provinces. 

'SPINNING REALITY'

Saskatchewan NDP MLA and finance critic Trent Wotherspoon said the fiscal update equated to the government “painting a rosy picture” of its record and criticized the lack of affordability measures.

“Unfortunately in this report, instead of getting the straight goods and better performance and cost of living relief this minister is spinning reality,” Wotherspoon said.

“Denying Saskatchewan people of the reality they know as it relates to the hardship they face – with the cost of living and the added cost that this government has imposed upon them.”

The province’s increases in PST also did not go unnoticed by Wotherspoon.

“The first quarter report shows that there is an additional $150 million in PST, which of course Saskatchewan people are paying,” he said.

“The Sask Party has done worse than nothing. While sitting on windfall revenues they hiked taxes and fees and power bills more than three times in the last year.”