Saskatchewan forecasts $463M deficit in 2022-23 budget

Click to play video: 'Sask. finance minister Donna Harpauer on Budget 2022'
Sask. finance minister Donna Harpauer on Budget 2022
Global's Connor O'Donovan speaks to Saskatchewan Finance Minister Donna Harpauer about Saskatchewan Budget 2022 – Mar 23, 2022

Donna Harpauer says Saskatchewan is on track to balance its budget by 2026-27.

Harpauer, the province’s finance minister, is projecting a $463-million deficit in the upcoming year as she tabled a 2022-23 budget Wednesday with record spending and revenue.

She said a growing economy and more jobs have improved Saskatchewan’s financial outlook, with the forecast deficit now $2.1 billion lower than last year’s budget.

“Our finances will steadily improve and we are on track to balance as a result of careful management of spending and prudent revenue forecasts,” Harpauer said.

Harpauer is forecasting revenue of $17.2 billion in the upcoming fiscal year, up from $2.7 billion in last year’s budget.

Spending will rise to $17.6 billion, up 3.1 per cent from 2021-22.

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Harpauer said the increase in revenue is largely due to higher oil and potash price forecasts.

“While volatile world events have made commodity prices difficult to forecast, as always our revenue forecasts are based on cautious oil price projections,” Harpauer said.

“It’s too soon to tell if oil prices will remain high for an extended period and what impact that could have on revenues. We will continue to monitor the impact on both revenues and affordability and respond as required.”

Read more: Potash, oil drive revenue growth in Saskatchewan

Opposition Leader Ryan Meili said there is nothing in the budget to help families deal with the high cost of living.

“Saskatchewan people needed a lifeline and instead, the Sask. Party threw them an anchor,” he said.

“This budget provides zero relief, nothing at all, for the costs that are making it harder for families to make ends meet.”

The Canadian Federation of Independent Business said the budget provides little relief for small business owners.

“We would have liked to see additional cost relief measures introduced in the budget, such as holding the small business tax rate at zero per cent for the foreseeable future and freezing education property tax mill rates,” said Brianna Solberg, CFIB senior policy analyst.

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“These actions would go a long way to help small businesses.”

Todd McKay said the budget failed to provide any tax relief and increases the provincial debt.

“The Saskatchewan budget projects soaring revenues, but the government is planning to spend every penny and still borrow another $463 million,” said Todd MacKay, Prairie director for the Canadian Taxpayers Federation.

“If a family ran up their credit cards during tough times and then won the 50-50 draw at a Rider game, they wouldn’t spend the windfall and keep borrowing, yet that’s exactly what the Saskatchewan government is doing.”

Harpauer cautioned, however, that there is risk to the economic growth she set out in the budget.

She said new COVID-19 variants, higher inflation and interest rates and a downturn in commodity prices could limit growth over the medium term.

Geopolitical tension between Russia and Ukraine could worsen global supply changes and tensions with trading partners could pose a significant risk to the outlook, she added.

Total public debt is forecast at $30 billion, which Harpauer said was an increase of $2.3 billion from last year’s budget.

She added that higher revenues reduced operating debt requirement by $450 million in 2021-22, bringing the operating debt to under $10 billion. That will carry through to the 2022-23 debt forecast, she added.

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Health care

One area seeing more money is health care, where Harpauer said a record $6.8 billion will be spent.

“It includes increases to hire and retain physicians, to hire and train more nurses, and to hire more paramedics to provide the best possible health care services for Saskatchewan people,” she said.

“(It) includes funding for thousands of additional surgeries to bring down wait times.”

The province is allocating an additional $21.6 million to address surgical wait times and to fund thousands of additional surgeries this year.

It is part of a three-year plan, previously announced by the province, to address the roughly 30,000 surgery backlog caused by the COVID-19 pandemic.

Read more: Saskatchewan government spends big on health care in Budget 2022

Meili said there are huge gaps in the province’s health-care system and the budget does nothing to address the shortcomings.

“This health-care budget goes nowhere near the generational investment that’s required to get things back in order,” he said.

“Instead, we see a recycled announcement on surgeries that will go nowhere near what we need to address the huge backlog.”

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Education spending is up 1.3 per cent from last year to $3.8 billion.

Harpauer said Saskatchewan’s 27 school divisions will receive $1.99 billion in operational funding for the 2022 school year, up $24.9 million from the current school year.

She is also allocating $7 million to set up a new fund to allow school divisions to hire up to an additional 200 full-time educational assistants.

Meili said the government has an “economic illiteracy” when it comes to education funding.

“This budget will force school divisions to make cuts to programs at a time when kids need more help,” he said.

“If kids don’t learn today, we can’t grow tomorrow.”

The head of the Saskatchewan Teachers’ Federation said the budget cuts more than three per cent from operational spending and could impact programs and services at schools.

“Classroom size and complexity are growing and becoming more urgent each year. These challenges are symptoms of a chronically underfunded education system,” said Patrick Maze.

“Teachers and school staff have shown incredible creativity and resiliency in trying to meet growing needs without the proper tools but there is only so much they can do. Students’ needs are going unmet.”

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Creative Saskatchewan

The film and television industry are getting a boost from the budget.

The province said it is investing an additional $8 million in Creative Saskatchewan, bringing total funding to $10 million for the grant program.

Read more: Sask. government provides $10 million for film and TV production grant in budget 2022

Harpauer estimated it would generate a $50-million increase in production.

“Including significant increased spending in the hospitality industry, which has been hit hard by the pandemic,” she said.

“We are going to see a busy sound stage in Regina.”

Tax increases

It will be more expensive to attend sporting events, movies and concerts later in the year.

Harpauer said the provincial sales tax (PST) is being broadened to match the federal GST base for admissions and entertainment events.

It will apply, in part, to sporting events, concerts, museums, fairs, movies, gym memberships and golf green fees. It comes into effect on Oct. 1.

Read more: Roughrider games, concerts, games, gyms to get more expensive with Sask. gov’t adding sales tax

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Harpauer expects it will add $10.5 million in revenue this year, and $21 million annually in the following years.

Smokers will have to pay more for cigarettes starting Thursday.

Tobacco taxes are going up 2 cents a cigarette and 8 cents a gram at midnight, March 23. The province is also increasing the tax on heat-not-burn products by 1.3 cents per stick.

The increase is projected to generate $12.1 million in revenue.

Harpauer is also adjusting the mill rate for the education portion of property taxes, and is decreasing the differential between the highest and lowest mill rates to improve overall fairness.

She said a slight increase in mill rates, along with forecasted base growth, are expected to add $20 million in revenue during 2022-23.

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