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Over Half of Saskatchewan’s Contingency Fund Gone in First Quarter

With the first quarter update, the Government of Saskatchewan has announced they will be using over half of the $300 million contingency fund.

Part of this money is being used to offset compensation savings that won’t be seen this year due to ongoing negotiations. At the time of the budget, the projected compensation savings were $250 million, that has been reduced to $125 million, with $125 million of the contingency fund being used.

“The reason we built a contingency into this year’s budget was to help address in-year pressures,” Finance Minister Kevin Doherty said in a statement.  “We still have work to do to control government’s overall costs, including savings we are working hard to achieve in total compensation expense.”

Another $40 million of the contingency fund is being used to offset expense pressures. At first quarter, expense is forecast to be $14.9 billion, an increase of $81.9 million from the budget. This is due to a number of factors, with agriculture expenses accounting for nearly half of that ($40.7 million) due to higher Crop Insurance expenses. Health, social services and assistance, community development are also reporting higher expense forecasts. This is partially being offset by the transportation expenses forecast being down $19.4 million due to the wind-up of operation at the Saskatchewan Transportation Company.

Revenue is forecast to be $14.2 billion, an increase of $42.0 million from the budget. The non-renewable resource revenues took a $35.6 million hit due to lower that budgeted oil and uranium forecasts, although it was partially offset due to higher than expected potash prices and Crown land sales revenue. Taxation revenue is projected to increase $40 million due to the Fuel Tax and Provincial Sales Tax. Other increases include more funding from the federal government and other own-source revenue.

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The real GDP growth forecasts for 2017 increased from an average of 1.7% at budget to 2.1%.

“At first quarter, our government remains on track with our fiscal plan to return Saskatchewan’s budget to balance in three years, by 2019-20,” says Doherty.

The deficit remains unchanged from the budget at $684.7 million.

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