Saskatchewan’s deficit is increasing by $126.5 million.
The province’s agricultural industry has been hit hard by drought conditions, which has forced the government to provide financial support. Because of this increase in spending, the province’s deficit is projected to be $2.74 billion for 2021-22.
The province has spent over $700 million supporting the agricultural sector. This includes crop insurance expenses of about $588 million and $119 million to help producers maintain breeding stock and address high costs due to drought conditions.
Total expense is up about $884 million, or 5.2 per cent, from budget.
The first quarter report indicates that higher expenses are somewhat offset by increased revenue from higher than expected oil and potash prices and from higher federal transfers.
Revenue is forecast to increase from budget by about $757 million, or 5.2 per cent. The government says $360 million of that increase is from non-renewable resources.
Federal transfers are up approximately $401 million from budget
"Recent commitments to help our farmers through the emerging drought, has affected the province's fiscal situation," Deputy Premier and Finance Minister Donna Harpauer said. "However, higher oil and potash prices and increased federal transfers have helped to combat the increase in the projected deficit."
According to private-sector forecasters, Saskatchewan's real GDP is expected to grow by 5.6 per cent in 2021 and by 3.8 per cent in 2022.