Deficit smaller than forecast in province’s latest financial report

There is some good news in the province’s latest fiscal update.

The third quarter financial report released Friday shows the government’s plan remains on track, with a smaller deficit forecast.

“While we are seeing progress, there is more to accomplish,” said Finance Minister Donna Harpauer.

“Our economy is performing well and is expected to post positive growth for the first time in two years.  We will meet our fiscal challenges by controlling spending and ensuring we do what we can to help keep our economy strong.”

At the third quarter, the 2017-18 deficit projection is $595 million, $101 million lower than the forecast deficit of $696 million at budget time.

Revenue is projected to be $13.9 billion at third quarter, down $222 million or 1.6 per cent from the budget.

The decrease largely reflects lower than expected 2016 assessments for personal and corporate income taxes, offset by increases in government business enterprise net income and other own source revenue.

Expenses are projected to be $14.5 billion at third quarter, $273 million or 1.8 per cent less than the budget forecast.

A large reduction in crop insurance claims, as well as inclusion of pension accrual adjustments, were offset somewhat by utilization-driven spending increases for medical services, income assistance, child and family services, forest firefighting costs, and higher custody counts.

The budget and third quarter expense forecast now reflect pension adjustments, aligned with audited financial statements which appear in public accounts at year-end.

“Our fiscal plan is focused on returning the budget to balance in 2019-20,” Harpauer said.  “Our work is far from done but we are following our plan and continuing on our path of growth, to provide services, programs and infrastructure Saskatchewan people value, today and into the future.”

Part of that plan includes a goal of a five per cent reduction in staffing across all of government over the next two years. It will be achieved largely through attrition.

There were mid-year adjustments made, most notably the recent commitments made by Premier Scott Moe to exempt PST on premiums for agriculture, life and health insurance, and restoring some funding to K-12 education.

Despite the reduction in the deficit, the NDP doesn’t think the government is getting the finances right.

“There’s a serious problem in terms of managing our funds right now and we need to see better management,” opposition finance critic Cathy Sproule said. “What we’ve seen is a government that’s rolled back issue after issue in this last budget and still haven’t been able to come to terms with the fiscal situation that we are in.”