Inflated oil prices from war in the Middle East were not enough to pump Saskatchewan’s budget out of a projected deficit, which stayed nearly static at $825.2 million, prompting criticism from the Opposition NDP.
Original budget projections made in March for the 2026-27 fiscal year put the province in an $819.4-million deficit. In the provincial fiscal update Thursday, both Saskatchewan’s expected annual revenue and expenses rose for the fiscal year, ending in March 2027.
Saskatchewan budgeted West Texas Intermediate – the North American benchmark oil price – at an average of US$59.75 per barrel for the year, much lower than the new expectation of US$75 per barrel. Well-head oil price also rose from a budgeted $62.92 to $79.35.
A dollar increase to the price of a barrel of oil is equal to about $17 million to the provincial treasury, Saskatchewan Finance Minister Jim Reiter said.
“Now, it’s still early in the fiscal year, and there continues to be, as you know, a lot of volatility geopolitically around the world and in global oil markets, so we’ll continue to monitor this closely,” Reiter said in Saskatoon on Thursday.
Global oil prices have surged since the United States and Israel launched their war on Iran in late February, just before Saskatchewan tabled its 2026-27 budget in mid-March. The conflict forced one-fifth of the world’s oil tanker shipments to anchor rather than cut through the Strait of Hormuz.
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That conflict-driven, non-renewable resource revenue is largely behind the $331-million increase in expected revenue for the budget year.
Trent Wotherspoon, the NDP’s finance critic, called the fiscal report “damning.”
“You have a government that actually has an additional boost of hundreds of millions of dollars from an international conflict, which we’ve been pointing to, but yet is still growing the deficit, the debt, and not offering an ounce of cost-of-living relief to the people of this province,” he told reporters Thursday morning outside Reiter’s office at the legislature.
Wotherspoon says while the fiscal update has shown the budget dip $6 million deeper into a deficit, the provincial NDP is still calling on the government to divert those increased oil revenues to suspend a provincial 15-cent-per-litre gas and diesel tax to give households a break.
In an emailed statement, a spokesperson for the Saskatchewan government said all of the provincial fuel tax is used for its highways and related infrastructure.
“The Government of Saskatchewan does not plan to cut the revenues that keep people safe on our roads and allow for the transportation of the exports our economy relies on,” Jesse Knisley said.
Projected health-care costs largely beat back the revenue rise in Saskatchewan, with service demands, inflation and salaries expected to cost $200 million more than expected. Overall, expenses jumped to $337 million more for the fiscal year.
Reiter said the province is working through collective agreements with health-care workers, which could affect the next fiscal update.
The cost of flood responses and recovery is also anticipated to drive up expenses alongside more costly crop insurance claims because of how the wet spring affected seeding.
“We’re gonna have to be fiscally prudent, keep an eye on expenditures. We’re gonna do that, but we’re also going to ensure that health care is properly funded, education properly funded, it’s not going to be any drastic cuts,” said Reiter. He added private investment is going to boost revenue, as well.
Saskatchewan also took on $65 million more debt than budgeted, for a total of $43.6 billion, largely because SaskPower needed to borrow more money because of a lower net income, the quarterly report said.
SaskPower’s net income is expected to be $59.5 million, less than half of the $138.4 million that it was budgeted to profit throughout the year.
Despite that, the outlook for the provincial net debt-to-GDP ratio has improved, expected to drop to 14.9 per cent from 16.1 per cent. That ratio is the second lowest in Canada, next to the 9.4 per cent Alberta is expecting to reach by the end of March 2027, the report states.
Reiter said while U.S. tariffs have carved into some Saskatchewan industries, the province’s exports were more than $24 billion in the first half of 2026, about 12 per cent higher than the same period the year before.
The greed of our nurses is staggering. Overpaid, overhyped, over confident.
Reiter couldn’t balance the books if they were fully completed by a competent accountant and all he was required to do was sign it without eating the crayon.