Following the economic turmoil from the coronavirus pandemic, the government of Saskatchewan says the province’s budget will return to a surplus in 2024-25.
On Thursday, the provincial government released its first quarter budget update, which forecasts a $2.1 billion deficit, $296 million less than previously projected.
The government says its medium-term outlook includes smaller deficits over the next three years with deficits of $1.4 billion in 2021-22, $855 million in 2022-23, and $340 million in 2023-24.
The province says in 2024-25, they expect a surplus of $125 million.
Earlier this year, the government was prepared to release a balanced budget, but with the oil crash and the coronavirus pandemic hitting at the same time, provincial revenues were down while expenses were up as the government dealt with the health crisis.
The province’s GDP is projected to decrease by 5.5 per cent in 2020, which is less than the 6.3 per cent contraction initially forecasted in the 2020-21 budget.
“Higher-than-expected oil prices and production, along with the positive impact of federal and provincial support measures, including provincial capital stimulus, are the primary reasons for the improved outlook,” said Finance Minister Donna Harpauer.
At the first quarter, revenue is forecasted to be $14.05 billion, an increase of 2.9 per cent over what the 2020-21 budget forecasted.
According to the finance minister, this is largely because of federal funding. An increase in resource revenue is also forecasted at first quarter. The forecasts for taxation and other own-source revenues are unchanged from the 2020-21 budget.
While revenues are higher than projected, the province says, revenue will not return to pre-crisis levels until 2022-23, says Harpauer.
“The outlook is consistent with the province’s economic forecast and is based on a reopening of the economies in Saskatchewan, Canada and globally at its current pace, and that any resurgence in COVID-19 can be successfully mitigated,” said Harpauer in a press release.
Over the course of the medium term, public debt is forecast to rise to $33.6 billion by 2024-25, primarily for needed infrastructure.
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