The Saskatchewan government has inked in a $100-million cushion into its mid-year financial forecast for any pandemic-related revenue shortfalls as the province deals with a spike in infections.
The Ministry of Finance says that buffer is on top of $160 million left in a $200-million contingency fund to cover expenses tied to COVID-19. About $40 million has spent helping school divisions prepare for the resumption of in-class learning in the fall.
Finance Minister Donna Harpauer said Friday the total $260-million buffer will give the government spending room to pay for unexpected costs in the remaining months of the 2020-21 fiscal year.
“We’re going to be there for our health system, for whatever it takes, and there is no way to say what the magic number will be,” she told a news conference.
She said no decision has been made as to whether more will be spent to support businesses struggling because of restrictions brought in to try to stem the spread of COVID-19.
“Those conversations are taking place as we speak. Right now the restrictions are on for three weeks. There will be an impact. How much of an impact … nothing has been designed or decided.”
The Finance Ministry attributes a rise in revenue at its mid-year forecast to be in part from $443 million more from Ottawa to help the province deal with the pandemic.
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How much federal cash has been spent varies from program to program, said Harpauer. “We will be spending it and it will be allocated accordingly as the year unfolds.”
The province is projecting revenue of $14.2 billion and expenses of $16.2 billion, leaving a deficit of $2 billion.
The financial hole is slightly lower than what was forecast in August, before the October provincial election, and is down about $380 million from the spring budget.
The update includes $133 million in Saskatchewan Party election promises. Premier Scott Moe campaigned on eliminating the deficit by 2024-25 without raising taxes or major spending cuts.
The ministry is also projecting non-renewable resource revenues to be better than imagined in the spring. The West Texas Intermediate oil price is forecast to be US$38 per barrel, up from $30.
The government highlighted how Saskatchewan’s economy has done well throughout the pandemic compared with other provinces and emphasized that last month’s provincial unemployment rate was the lowest in Canada.
“Our recovery has been relatively strong,” said Harpauer.
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