Saskatchewan’s mid-year financial report reveals a growing deficit, partly driven by adverse weather conditions that significantly impacted crop yields and quality across the province. Dry conditions, particularly during the summer, hurt harvests — especially canola — leading to higher crop insurance claims and an increase in agricultural expenses by over $385 million.
While weather conditions initially started off well, the summer drought in many regions had a lasting impact on crops, particularly canola. These fluctuations resulted in increased crop insurance claims, pushing the Agriculture expense theme up by $385 million, or 25.1 per cent, from the 2024-25 budget.
"Agriculture is an essential element of our provincial economy and plays an important role in the history of our province," said Deputy Premier and Finance Minister Jim Reiter. "When we face years with adverse growing conditions, it is important that we have programs like crop insurance to protect this critical industry."
"Crop insurance was designed to help protect the agriculture sector from circumstances beyond their control, and that was certainly the case with the dry conditions we experienced this past summer," Reiter continued. "However, it is important to note that producers help fund the crop insurance program through the premiums they pay into it."
The 2024-25 Mid-Year Report forecasts a deficit of $743.5 million, an increase of $470.4 million from the budget.
Total expenses are expected to rise by $745.5 million, or 3.7 per cent, from the budget overall.
In addition to the increased agricultural costs, the Protection of Persons and Property expense theme grew by $128 million, primarily due to operating pressures in correctional facilities and wildfire response efforts.
Health expenses also rose by $100 million to address service and volume pressures.
On a positive note, total revenue is projected to increase by $275.1 million, or 1.4 per cent, from the budget.
Other Own-Source and Taxation revenues showed growth. Other Own-Source revenue is expected to increase by $235.5 million compared to budget, reflecting improvements in investment and insurance income.
Taxation revenue is also forecast to rise by $133 million, largely due to higher-than-anticipated 2023 tax assessments.
At mid-year, the total gross debt is projected to reach $35.2 billion, an increase of $388.5 million from the budget, though it is $12.3 million lower than the first quarter. The increase in gross debt is attributed to the Crown sector, as reported earlier this year.
Despite the debt increase, the provincial debt-to-GDP ratio is expected to improve slightly to 13.9 per cent by the end of the 2024-25 fiscal year, down from the previously projected 14 per cent.
Saskatchewan also boasted the second-fastest growing economy in the country in 2023, with real GDP growth of 2.3 per cent.