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Saskatchewan not slashing spending despite $2.4B deficit looming for 2020-21

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WATCH: On Monday, Finance Minister Donna Harpauer unveiled the 2020-21 budget, which includes $16.1 billion in spending, an increase of 7.2 per cent from last year’s budget – Jun 15, 2020

Despite an estimated $2.4-billion budget deficit for the fiscal year, the Saskatchewan Party government plans to pass a budget that avoids slashing funds for education, health care and infrastructure.

On Monday, Finance Minister Donna Harpauer unveiled the 2020-21 budget, which includes $16.1 billion in spending, an increase of 7.2 per cent from last year’s budget.

“This investment in infrastructure will help stimulate our economy and create jobs as we meet the challenge presented by the global pandemic,” Harpauer said.

Investments include construction on new hospitals, schools, highways and municipal infrastructure, with the government committing $3.1 billion in capital projects this year.

READ MORE: Saskatchewan’s 2020-21 spending plan aims to serve as stimulus package during coronavirus pandemic

However, Saskatchewan’s government faces a $2.4-billion deficit for 2020-21 as a result of the oil price crash and the coronavirus pandemic.

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The deficit is a result of $1.2 billion in revenue loss and over $900 million in additional costs related to COVID-19, including a $200-million contingency fund for health and public safety.

Since March 18, the government of Saskatchewan has spent over $502 million for COVID-19-related expenses. This includes over $171 million for new capital stimulus funding for third parties and $150 million for shovel-ready construction projects for municipalities.

“This is a pandemic deficit, not a structural deficit,” Harpauer said. “Prior to the pandemic, Saskatchewan was on track for balanced budgets last year and this year, and I am confident that as Saskatchewan’s economy recovers, our revenues will also recover and we will get back to balance in the coming years without having to cut programs and services.”

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Saskatchewan unveils 2020-21 budget, includes $16.1 billion in spending despite $2.4B deficit – Jun 15, 2020

Harpauer said there will be no tax increases this fiscal year.

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The finance minister’s budget reflects $6.18 billion for the health-care sector, which has been incurring costs related to COVID-19. Over $700 million has been allocated to address the pandemic, including social programs.

Harpauer says it will take years to recover from the coronavirus pandemic.

READ MORE: Coronavirus — Saskatchewan announces $10M in aid for livestock producers

The budget also boosts funding to mental health and addictions with $425 million, which makes up 7.5 per cent of the Ministry of Health’s overall budget.

Over $79.4 million has been added to this year’s $3.36 billion budget for education, including the pre-K and post-secondary sectors.

Additionally, Crown corporations will invest over $1.7 billion into capital projects.

Harpauer’s budget also introduced new incentives to support the building of homes and pipelines, including a PST rebate of up to 42 per cent on new home construction.

As for new sources of revenue, the government will start collecting provincial sales tax on out-of-province e-commerce platforms.

The 2020-21 budget will push the province’s public debt to $24.2 billion, an increase of over $3 billion from last year.

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Saskatchewan government dedicating more funding towards health care – Jun 15, 2020

However, the government remains hopeful the economy will recover within the next three to four years as it relies on exports and the agriculture sector – where revenue remains strong. On Monday, Harpauer said it’s likely the 2021-22 budget won’t be balanced either.

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“The products Saskatchewan has, people…still need,” Premier Scott Moe said.

“People are still seeding crops this year. They need potash fertilizer. We have it. People still need to eat, and we have the Agri-Food products to supply the world.

“This speaks to why we’re able to retain 80 per cent of our jobs, and that is why you’re seeing Saskatchewan being hit somewhat less than other jurisdictions in Canada.”