NDP calls for Sask. government to delay budget due to effects of 'global market crash'

NDP Leader Ryan Meili said the provincial government should delay its budget to account for the global market crash, oil price drop and the impacts of COVID-19.

The 2020-21 budget is slated to be released next Wednesday afternoon.

"It's only reasonable that the government should revisit their assumptions to ensure we're facing these challenges honestly," Meili said.

He said the government delayed its 2018 budget by two weeks because of the Saskatchewan Party's leadership election.

"If this premier can delay a budget to give him time to take off the training wheels, why can't he delay the budget to take into account the effects of a global market crash?" Meili said.

Meili said the government should release the third quarter financial update saying the most recent estimates pegged oil at $61 US per barrel — double the current price.

On Tuesday, Moe dismissed Meili's request to delay the budget.

"We're not going to make panicky decisions, knee-jerk reactions to what has to date been a couple of days of of variable market forces," Moe said.

On Monday, Minister of Finance Donna Harpauer said the budget was finalized on Feb. 28.

"We had made some adjustments already for the downturn in the markets but the plunge of (Monday) wouldn't be in the budget. We are quite optimistic it won't be a long-term plunge that is that dramatic. It may be ended before the budget comes into effect," Harpauer said.

"I don't think we should adjust it every time there is a plunge in resource revenue that is only 4.5 per cent of your budget."

Oil and natural gas revenue was projected at $691 million in the 2019-20 budget.

The dramatic change was triggered by a severe double whammy — fears the spread of COVID-19 could trigger a global recession and an oil price war between Saudi Arabia and Russia.

The benchmark price for North American oil, West Texas Intermediate, initially fell by the most in one day since the 1991 Gulf War, before eventually settling at $31.13 US per barrel, down $10.15 US, on Monday.

The global benchmark, Brent crude, closed down 24 per cent at $34.36 US a barrel.

Western Canadian Select dropped to as low as $15.73 US per barrel on Monday.

Saskatchewan's 2019-20 budget forecasted oil at $59.75 US per barrel. 

Last May, Harpauer told a government committee, "for every $1 change in a barrel of oil, it affects our budget by $15 million."

Harpauer said if the price of oil stays at $30 per barrel, the province would be facing "a half-a-billion-dollar shortfall."

Harpauer said Monday the province had "stabilized" its finances in recent years transitioning away from a heavier reliance on oil and other non-renewable resource revenues.

"Oil is only 4.5 per cent of the budget," she said.

Harpauer said the price drop would have to be sustained over a few months to affect budget projections and if so, adjustments would be made in the first quarter financial report.