Sask. reports $182 million operating surplus at end of fiscal year

Despite two previous updates in the red, Saskatchewan ended the 2023-24 fiscal year with an operating surplus of $182 million.

The Ministry of Finance released the Public Accounts Volume 1 on Thursday.

“For the second year in a row we are proud to report an operating surplus, which demonstrates our province’s strong economic and fiscal positions,” said Finance Minister Donna Harpauer.

She said it felt pretty good to be presenting a surplus.

“It’s not a large surplus, of course, we would like it to be more,” she said.

When the 2023-24 budget was presented it anticipated a $1 billion surplus, but that changed by mid-year when the forecast was a $250.3 million deficit, and in the third quarter update which saw a $482.5 million deficit projection.

The big change in the numbers came in the fourth quarter with an unexpected increase in the corporate income tax from 2022. Harpauer said it reflects the high potash price and volume from two years ago.

“We know that that caused a very large increase in revenues for our province in 2022, but because of the way that we administer corporate income tax through the (Canada Revenue Agency) there’s that two-year lag, and so we’re realizing the corporate income tax from that huge spike in profitability in the potash two years later,” she explained.

The province also saw an increase in liquor and gaming revenue and an unexpected jump in revenue from the Output-Based Performance Standards (OBPS).

The OBPS is the program the provincial government had gotten approved by the federal government and put in to replace the carbon tax on industrial emitters like SaskPower.

The government got back money from the federal government and the carbon tax, adding to the revenues in the 2023-24 third quarter.

READ MORE:

• Federal government posts $50.9 billion deficit for 2023-24 fiscal year
• Saskatoon seeking outside expertise on avoiding future operating budget deficits
• What you need to know about Saskatchewan’s provincial budget

Expenses were down by $55 million when compared to the numbers presented in the government’s third-quarter fiscal update, while revenue increased by $610 million.

Overall expenses ballooned from the budget, largely because of higher crop insurance payouts from the effects of extended drought, and higher demands on healthcare.

“Accelerating our surgeries cause those increases, as well as we’ve definitely increased the number of health care professionals were hiring,” said Harpauer.

The surplus for the 2023-24 fiscal year won’t necessarily affect the expectations for the current year, but Harpauer explained it could put the province in a better position.

“It doesn’t change this year’s projections but it gives us some cash to deal with different pressures that governments deal with throughout the year,” said the minister.

From the NDP

The Sask. NDP’s finance critic said the money that balanced the budget is coming out from people and industry during an affordability crisis.

“It’s all taxes and fees. Scott Moe is trying to balance the budget before an election on the backs of Saskatchewan taxpayers. It’s coming out of your pocket,” said Trent Wotherspoon in a news release.

“During a once-in-a-generation affordability challenge, when people need relief the most, Scott Moe and the Sask. Party are making your life more expensive so that he can claim he managed to balance the budget in the last three months before the election. It’s smoke and mirrors and Saskatchewan people are picking up the tab.”

Government said in its news release about the public accounts that part of the reason revenue was up was more people in the province paying more in taxes, however the NDP calls that misleading. The Opposition said in its news release that the 30,500 person increase to the population in the last year wouldn’t account for the $1.32 billion increase to government revenue.