Saskatchewan's surplus to be short of projection, according to quarterly report

Saskatchewan is on track to produce a surplus, according to the first quarterly report of the fiscal year, but it's less than what was projected.

The Government of Saskatchewan is expecting to see a surplus of $25.8 million, $8.6 million less than the $34.4 million budgeted.

"Overall, I'm encouraged by Saskatchewan's updated budget forecast at first quarter," said Finance Minister Donna Harpauer in a news release.

"In any given year there can be in-year budgetary challenges, and there can also be some up-side."

Revenue for the province is forecast at $15.38 billion, which is $355.3 million — or 2.4 per cent — higher than the $15.02 budgeted. Expenses are forecast at $15.35 billion, which is $363.9 million — also 2.4 per cent  — higher than the $14.99 billion budgeted.

 "At first quarter, the province remains on track to record a small surplus," said Harpauer. "This balance allows sustained investment into the priorities of Saskatchewan people."

The province's debt is $267.5 million lower than what was budgeted, at $21.4 billion compared to the $21.7 billion expected. The report says Saskatchewan's economy "continues to improve and recover" from the oil price collapse in late 2014. 

Saskatchewan added 10,914 jobs in the first seven months of 2019, decreasing the unemployment rate to 5.6 per cent from 6.4 per cent. 

A news release from the province said a significant increase in pension expense and a non-cash accounting adjustment were factors in the lower-than-expected surplus. Those costs are partially offset by higher revenue projections from non-renewable resources and federal transfers, and from increases in Government Business Enterprises net income and own-source revenue, the release said.

Trent Wotherspoon, the opposition NDP finance critic, said the government is being "reckless" with the province's economy and the future of Saskatchewan residents. 

"They couldn't get the job done during an unprecedented resource boom in this province and left us vulnerable when things tightened up," he said. "Certainly this is a time when investments have to happen into areas like education, into our classrooms, because that's what sets up for the future."

Part of the increased revenue recorded in the first quarter report was due to a higher potash prices, but Wotherspoon said he's concerned changes were made to the Potash Production Tax without industry consultation. On April 1, the government removed deductions that allowed companies to pay little to no production tax.