The Government of Saskatchewan is projecting a $2.1 billion deficit in 2020-21 with the budget returning to a surplus in 2024-25.
Finance Minister Donna Harpauer presented the first quarter budget update which forecasted the deficit at $296 million less than initially thought of in June.
“Saskatchewan’s fiscal foundation is solid and our province’s economy and economies around the world continue to re-open and recover. We have seen positive signs in recent months but we are aware that certain sectors and industries continue to face significant challenges.”
The provincial GDP is forecasted to fall by 5.5 per cent in 2020 and rebound next year with a growth of 4.6 per cent. Revenues are set at $14.05 billion and expenses at $16.18 billion. The spending includes a $72 million increase for the health system, $70 million increase for municipalities and $35 million increase for supports for the tourism industry.
“The health and safety of Saskatchewan people are our highest priorities as we continue to meet the challenge of the global pandemic. Our government is investing in priorities and ensuring the province is well-positioned to recover and return to balance over time.”
She says revenues will not return to pre-crisis levels until 2022-23. The budget is expected to remain in a deficit with $855 million in 2022-23 and $340 million in 2023-24 before balancing out in 2024-25 with a $125 million surplus.
The government says the budget is based on the pace of reopening in Saskatchewan, Canada and globally and mitigating an resurgence of COVID-19.
The first quarter report says public debt will decrease by $455 million due to the change in deficit forecast and a lower Government Business Enterprise debt. Public debt is then forecasted to rise to $33.6 billion by 2024-25 for infrastructure.