Saskatchewan. projects $463 million deficit, finance minister says government surprised by rapid economic rebound

Saskatchewan Finance Minister Donna Harpauer said the province is “back on track,” predicting a $463 million deficit for 2022-23.

The projection is a far cry from the $2.6 billion deficit projected for 2021-22. It is also lower than last year’s projection of a $1.7 billion deficit for 2022-23.

“We are seeing strong economic growth and strong job creation coming out of the pandemic and as a result, the province’s fiscal outlook has improved significantly,” Harpauer said.

The Minister of Finance says she is sticking to a plan to return to balance by 2026-2027.

The Minister of Finance projects a balanced budget by 2026-2027. (Duk Han Lee/CBC)

The government forecasts a deficit of $463 million for 2022-2023. (Duk Han Lee/CBC)

Provincial revenues are expected to increase due to strong demand for potash and oil. The government forecasts $2.9 billion in revenue from non-renewable resources, up from $1.6 billion last year.

Overall revenue is expected to be $17.2 billion, up $2.7 billion from a year ago.

“While volatile global events have made commodity prices difficult to predict, as always, our revenue guidance is based on conservative oil price projections,” Harpauer said.

“It’s too early to tell if oil prices will remain high for an extended period and what impact that might have on earnings.”

Harpauer said on Wednesday that developments in Ukraine and increases in inflation would be watched closely.

“The risk in this budget and for all of us in the future will certainly be how far inflation will go due to circumstances, both with spending pressures during the pandemic and global issues,” he said. she declared.

“There is no doubt that the political climate due to what is happening in Ukraine is a risk. The supply chain disruptions, which already existed, are further accelerated due to the war.”

Overall, Harpauer told reporters that budget talks were much more pleasant due to economic conditions.

“The surprise was how quickly our economy was recovering. It was actually a positive experience as our revenues are strengthening, which we didn’t expect a year ago.”

The government bases the 2022-23 budget on several forecasts. (Duk Han Lee/CBC)

The government based Wednesday’s budget figures on the following forecast:

  • Real GDP — an increase of 3.7%.
  • WTI oil price — US$75.75/barrel.
  • Potash — $407 per US ton of KCl/tonne of KCl.
  • Canadian dollar — US$0.80
  • Retail sales: up 0.5% in 2022 and 2.7% in 2023.

Harpauer signaled as early as last November that spending would be modest. The budget indicates a spending increase of 3.1%, or $531 million, for a total of $17.6 billion.

Public debt is expected to reach $30 billion by the end of March 2023.

Health care

The largest expenditure in the budget is health care, with a record $6.8 billion, or nearly 40% of total government spending.

Harpauer said the government was spending to reduce its surgical waiting list and hire and retain doctors, nurses and paramedics.

The Saskatchewan Health Authority’s budget has increased by 7% to a total of $4.2 billion.

The government aims to bring surgical wait times back to “pre-COVID levels” by the end of March 2025.

It is also spending $95 million to “support the ongoing pandemic response and continue to protect the people of Saskatchewan as they transition to life with COVID-19.” This money will be used for personal protective equipment, support for 58 acute care beds in Regina and Saskatoon and operating costs.

The government is also creating a new independent agency that will work to recruit and retain healthcare workers.

It is increasing spending by $1.5 million to bring 150 healthcare workers from the Philippines to Saskatchewan, with a goal of reaching 300 by 2023-24.

The province is also spending $12.5 million to add 11 new intensive care unit beds, with an eventual goal of adding 31 beds by 2024-25.

The government is looking to recruit and retain doctors, especially in rural Saskatchewan, and will spend $3.5 million to do so.

Spending on mental health and addictions increases by $8 million and represents 7% of the overall health budget.

Education and social services

Overall spending on education amounted to $3.8 billion, up 1.3% from last year.

Saskatchewan school divisions will receive $1.99 billion, an increase of $24.9 million from 2021-22.

The budget includes $7 million for school divisions to hire up to 200 full-time teacher assistants.

Spending on social services increased by $45.7 million, or 3.4%, over last year. The overall budget for social services is $1.4 billion.

The government is increasing basic social income support benefits by $30 per month and housing benefits by up to $25 per month.

The budget does not include operational funding for second-stage shelters for women and children fleeing domestic violence, or direct funding for safe drug use sites.

Entertainment Events PST Extension

The government said it would generate $21 million a year by adding PST to many entertainment events.

He said he will match GST on events including:

  • Sport events.
  • Gigs.
  • Museums.
  • Movies.
  • Gym memberships.
  • Green fees.

“We did it with some hesitation,” Sask said. Premier Scott Moe said Wednesday.

“We are also using these dollars to fund our surgical initiatives, our increased funding to reduce this surgical wait list that we have acquired.”

He said the government would prefer to lower taxes in Saskatchewan, but he said the government is looking to balance the many sources of revenue available to the province and redistribute them effectively, in order “to have an impact on families across Saskatchewan”.

There are exemptions for amateur events, school activities, events organized by non-profit organizations and children’s activities.

It is also raising tobacco taxes starting at midnight March 23 and expects to raise $12.1 million in revenue.

The province is spending $50.7 million to create a Provincial Protective Services Branch that will unite the province’s peace officers into a single entity.

Overall expenditures in the field of Protection of persons and property increased by $91.1 million, for a total of $936.2 million.

The budget provides funding for a new Saskatchewan Indigenous Investment Finance Corporation. The government has said it will “provide loan guarantees for projects that will help indigenous peoples participate in our growing economy”.

The program will provide up to $75 million in loan guarantees “for private sector loans to Indigenous communities and organizations for investments in natural resource and value-added agriculture projects.”

The film and television subsidy has increased

The government is increasing its grant for film and television through Creative Saskatchewan from $2 million to $10 million, saying “increasing streaming services means [it is] Now is the time to attract new investment.”

The government reduced the Saskatchewan Film Employment Tax Credit in 2012.

One of the conditions of the Creative Saskatchewan grant is that “only Saskatchewan labour, goods and services are eligible for support under the program”.

“This investment is expected to generate a $50 million increase in film and television production and millions in annual economic activity, including a significant increase in spending in the hospitality industry, which has been hit hard by the pandemic,” Harpauer said.

Harpauer said the province is naming the Regina soundstage after the late John Hopkins, longtime CEO of the Regina & Chamber of Commerce, who died last month after a long battle with cancer.

The NDP says the budget is “no help” for Saskatchewan. people

Opposition Leader Ryan Meili speaks during a Budget Day press conference at the Legislative Building in Regina on March 23, 2022. (Moreen Mugerwa/CBC)

Opposition Leader Ryan Meili said the budget did not provide enough relief to Saskatchewan residents.

“At a time when Saskatchewan families need a lifeline, the Saskatchewan Party has dropped an anchor for them,” Meili said.

Opposition finance critic Trent Wotherspoon called the budget “no help” for the people of Saskatchewan. He said the government did not offer relief for rising fuel and grocery costs, but instead increased taxes and fees.

“This is a budget with booming resource revenues that does not benefit people crushed by increases in the cost of living.”

Meili and Wotherspoon both pointed to a slight increase in spending on education, 1.3%, which follows increases in spending on health (4.4%), social services (4.3%) and child protection. people and property (10.8%).

“We saw a 2.6% increase in property tax on education, but only a 1.3% increase in education, so they bring in more and invest less.”

Meili said when you take out the planned increase in teacher salaries, the government is giving the 27 school divisions $6 million for staffing and support out of a budget increase of $24.9 million.

“I know we’re going to hear from school divisions in the coming weeks that they’re going to have to let teachers go and close programs.”

Capital expenditure

The government is spending $3.2 billion on capital projects in 2022-23.

Here are some of these spending commitments:

  • $52.9 million for the continuation of hospital projects in Prince Albert and Weyburn, urgent care centers in Regina and Saskatoon and long-term care centers.
  • $95.2 million for 15 new schools and five renovations.
  • $452.5 million to upgrade 1,100 km of provincial highways.
  • $18.1 million to update the Wildfire Air Fleet.

Deficit projections

Last year, the government forecast the 2022-23 deficit to be $1.7 billion.

Here are the projections for the next three budgets:

  • $384 million in 2023-2024.
  • $321 million in 2024-2025.
  • $165 million in 2025-2026.
  • A balanced budget in 2026-27.

Harpauer said she’s “optimistic” that deficits in coming years will be lower than those projections.