The provincial government released the mid-year financial numbers Monday morning, and they show what was a surplus budget in the spring, is now expected to be a deficit thanks in part to a nearly 60 percent increase in agricultural expenses. A drop in non-renewable resource revenue was also said to contribute to the increase in expenses for the province.
"The drought was unforeseen, reducing projected crop production by 20 percent in 2023 when compared to 2022," Deputy Premier and Finance Minister Donna Harpauer said, as she released the 2023-24 Mid-Year Report. “Crop insurance and relief programs are in place for Saskatchewan producers.
"Potash prices and sales dropped because potash from Russia and Belarus flowed to large markets including China and India despite being subject to Western sanctions in response to Russia's invasion of Ukraine," Harpauer continued. "Even considering these impacts, our fiscal picture is solid, more people than ever are living and working in Saskatchewan, and our economy is resilient."
The forecast for the expenses was up by $1.268 billion, which ate away at the projected surplus in the budget. Instead of a surplus of just over $1 billion, the mid-year report is projecting a deficit of $250.7 million. The largest change was for agriculture, which has expenditures now projected to be $2.3 billion, a 58.8 percent increase from the budget in the spring. Also up was expenses in the category of “Protection of Persons and Property”, which was up by 11.5 percent. This included increased expenses for wildfire response and evacuations.
Revenues were up by $35.3 million in the mid-year report, however, there was still a drop in revenues, with non-renewable resources falling by 21.5 percent, or $718 million. This was offset by an increase in tax revenue of $415 million, and net income from government business enterprises was up by $204.4 million.
In the mid-year report, the provincial government held steadfast in the call to retire up to $1 billion in operating debt. As well, to cover capital investments for schools, highways, hospitals and other infrastructure, the province stated they will be increasing their borrowing.
The report also touted the net debt as a percentage of gross domestic product. It is expected to be 13.3 percent this fiscal year. This is the second lowest among the provinces.
Harpauer also pointed out the latest population and job numbers as proof of a strong provincial economy.
"Saskatchewan's population reached 1,209,107 in July 2023, after experiencing the largest single-year increase since 1914, as 30,685 more people made Saskatchewan their home," Harpauer said. "A record 605,300 people were working in Saskatchewan and the unemployment rate was 4.4 percent in October 2023, the lowest rate among the provinces and well below the 5.7 percent seasonally-adjusted national average.”
The province’s gross debt is forecasted to be $31.6 billion at the end of the fiscal year, up by $709.5 million from the original budget in the spring.
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