Finance Minister Kevin Doherty said the province is still crunching the numbers in their mid-year financial update, but the projected deficit isn’t looking good.
“The $434 million deficit will be higher this year, if the fiscal year ended today,” Doherty said.
Doherty said he couldn’t provide an estimate on what the projected deficit is at this time because the numbers not being finalized.
The minister said the financial impact can be attributed to a variety of factors including low resource prices and a stronger than predicated Canadian dollar effect on export prices.
He also said Potash Corp’s anticipation of softer prices in their third quarter update attributes to that.
Jason Childs, an associate economics professor at the University of Regina, explained that all of these factors create a ripple effect on revenue.
“We’re seeing lower levels of coming in off corporate income tax. We’re going to see lower levels come in corporate income tax. We’re going to see lower levels from personal income tax, lower levels from land sales, etcetera,” he said.
Doherty added increased demand for social services in a difficult economy, healthcare expenditures, and incarceration rates as a few reasons he’s been told the deficit will be larger than forecast.
With 20 per cent of the crop still out on the field, the province is bracing for increased crop insurance claims, which will also impact the bottom line.
The mid-year update is expected to be released before the end of November.