Deputy Premier and Finance Minister Donna Harpauer presented the 2023-24 Mid-Year Report, revealing that global market conditions, severe drought and potash market dynamics are key factors contributing to a forecasted deficit at mid-year.
The Mid-Year Report outlined a deficit of $250.5 million, down $1.3 billion from the budget and $736.1 million from the first quarter.
Total revenue is forecasted to increase by $35.2 million (0.2 per cent) from the budget, with significant boosts from taxation, including Corporate Income Tax (CIT) and Provincial Sales Tax (PST).
On the expense side, total expenses are forecasted to increase by $1.3 billion (7.0 per cent) from the budget, with agriculture expenses leading the surge, primarily due to increased crop insurance claims resulting from the severe drought.
“The drought was unforeseen, reducing projected crop production by 20 per cent in 2023, when compared to 2022,” Harpauer said, as she released the 2023-24 Mid-Year Report. “Crop insurance and relief programs are in place for Saskatchewan producers.”
“Potash prices and sales dropped because potash from Russia and Belarus flowed to large markets, including China and India, despite being subject to Western sanctions in response to Russia’s invasion of Ukraine.”
Despite these challenges, Harpauer emphasized the resilience of Saskatchewan’s economy.
“Even considering these impacts, our fiscal picture is solid, more people than ever are living and working in Saskatchewan, and our economy is resilient.”
She pointed to the province’s increased population, reaching 1,209,107 in July 2023, with a record 605,300 people employed and an unemployment rate of 4.4 per cent in October 2023, the lowest among provinces.
Overall, Harpauer was disappointed by the mid-year report but is looking at the positive side.
“I’m still very optimistic because of the strength that we’re seeing in all of our economic indicators. I’ll go back to my farming days; droughts don’t last forever, so hopefully, we’ll be back to a more average year or a good year next year,” she said. “Potash, just listening to the industry, I think that we’re probably at the norm, and the huge spikes that we’ve seen a year and two years ago are probably not going to happen again in the near future.”
She added that despite the deficit, the plan to retire up to $1.0 billion in operating debt in 2023-24 remains unchanged at mid-year.
