Saskatchewan’s 2018-19 Budget remains on track at mid-year, with a projected deficit of $348.3 million, $17 million less than what was projected on budget day.
“Saskatchewan’s financial and economic outlook have both improved somewhat compared to our original budget projections,” Finance Minister Donna Harpauer said. “Our government’s plan to return the province to balance by 2019-20 remains on track.”
Higher forecast revenue—up $138.1 million from budget—has helped reduce the projected deficit. Revenue is forecast to be up due to higher projected resource revenue and higher net income from Government Business Enterprises, federal transfers and other own-source revenue, partially offset by lower personal income tax revenue.
Expense is forecast to be up $121.1 million from budget. Nearly half of the increase is pension expense, reflecting changes in interest rates and actuarial assumptions. Increases at mid-year also reflect higher-than-budgeted expense for child and family services, health services and forest-fire operations.
Saskatchewan is showing modest improvement in economic activity in 2018, and Gross Domestic Product (GDP) forecasts remain consistent with budget projections. The current forecast projects cumulative GDP growth of 2.9 per cent for 2017 and 2018 (2.2 per cent in 2017 and 0.7 per cent in 2018), slightly higher than the budget forecast.
Public Debt at March 31, 2019 is forecast to be $19.78 billion, which is $251.6 million lower than budgeted, primarily due to decreased debt for Government Business Enterprises.
“Most of our public debt pertains to infrastructure, either through self-supporting Crown corporations or through the Saskatchewan Builds Capital Plan,” Harpauer said. “Our infrastructure needs are significant and support a growing economy.”
Saskatchewan recently had its triple-A credit rating confirmed by Moody’s Investors Service, and has the second-highest credit rating in Canada when ratings from the three major agencies are combined. Saskatchewan is also forecast to have the third-lowest net debt-to-GDP ratio in the country.
“While we are on course, there is still work to do,” Harpauer said. “We continue to manage spending carefully, invest in priorities for Saskatchewan people, shift from our reliance on volatile resource revenue and help keep our economy strong.”