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Saskatchewan sees drop in projected surplus, still aims to cut debt

Click to play video: 'Saskatchewan sees drop in projected surplus, still aims to cut debt'
Saskatchewan sees drop in projected surplus, still aims to cut debt
Saskatchewan Finance Minister Donna Harpauer commented on the effect of drought, a teachers strike, and the Vancouver Port strike upon Saskatchewan's financial surplus on Thursday. "We have a strong cash position but will likely see the full impact of these challenges in the second quarter," she explained – Aug 31, 2023

Saskatchewan is projecting a $485.5 million surplus in the first quarter and says the plan to address $1 billion in operating debt is on track.

The province said the surplus is down $532 million from the budget, pointing to wildfire fighting efforts and higher non-cash pension expenses as the reason for that.

Click to play video: 'Effect of three factors not fully realized upon Saskatchewan’s surplus in Q1, finance minister says'
Effect of three factors not fully realized upon Saskatchewan’s surplus in Q1, finance minister says

“Saskatchewan’s finances continue to be in a strong position, with a substantial surplus. The forecast, however, clearly demonstrates the need to be prudent and manage spending carefully, as resource revenue is volatile and forecasts can change quickly due to global impacts on prices and production,” said Finance Minister Donna Harpauer.

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The revenue forecast at the first quarter is down $123.7 million, sitting at $19.6 billion.

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A decrease in the the non-renewable resources revenue forecast was considered the culprit, with the province saying there was a $528.9-million decrease which was largely due to lower potash and oil prices and forecasted sales.

It said this decrease was offset due to increased revenues in other areas like taxation to the tune of $405.2 million.

Click to play video: 'Saskatchewan forecasts $1.1 billion in surplus: Finance minister'
Saskatchewan forecasts $1.1 billion in surplus: Finance minister

Expenses are projected to be up at the first quarter, hitting $19.1 billion, up from $408.2 million.

The province says that increased expense forecast is due to a $317.2-million increase to education, general government and finance charges, as well as a $89-million increase used to fight wildfires.

“We will continue to pay down operating debt, as planned. We’re able to do so because higher opening cash balances due to a strong year end in 2022-23 have offset the drop in the projected surplus.”

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The province touted that it has the second best net-debt-to-GDP among the provinces, adding that it’s projected to be at 13.4 per cent at the end of 2023-24.

“Sticking with our debt reduction plan is important, because paying down up to $1 billion in operating debt this fiscal year, combined with $1.5 billion in debt retirement last fiscal year, is resulting in projected annualized interest savings of $110 million — savings that go directly into supporting priority programs, services and infrastructure for Saskatchewan people.”

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