Sask. Roughriders add three to roster
Nov 25, 2024
Nick Jones, D'Sean Mimbs and Ben Hadley were signed by the team.
Saskatchewan’s finances have taken a downturn.
The province’s mid-year financial report is forecasting a deficit of $250.5 million at mid-year, down $1.27 billion from budget and $736.1 million from the first-quarter report in August.
However, the government still plans to retire up to $1 billion in operating debt.
Finance Minister Donna Harpauer said there were two main drivers of the downturn — lower potash prices and reduced sales, and higher crop insurance claims as a result of the drought that hit parts of the province this past summer.
“The drought was unforeseen, reducing projected crop production by 20 per cent in 2023 when compared to 2022,” Harpauer said in the release. “Crop insurance and relief programs are in place for Saskatchewan producers.”
The report said total revenue is expected to increase by $35.2 million from budget, to $19.7 billion.
“It is disappointing (to present a deficit), but I’m still optimistic because of the strength that we’re seeing in all of our economic indicators,” said Harpauer.
“The indicators right now are very strong, which speaks to the fact that there will be job creation, which increases our personal income tax jobs available, which increases PST because when people have good jobs they have more money to spend.”
But while taxation and other sources of revenue are up a total of $753 million from budget, those were largely offset by a $717.8-million decrease in non-renewable resources revenue since March.
The report said potash revenue is expected to fall by $551.8 million from budget, reflecting a 28.6 per cent drop in potash prices. According to the report, the average price in 2023 is now expected to be $263 US per tonne, down from $368 US per tonne in March.
As well, potash production in Saskatchewan is down 5.9 per cent since the budget was delivered.
The province had been enjoying a spike in prices and demand when much of the world turned away from Russian and Belarusian potash in the wake of the invasion of Ukraine, but the provincial government said large markets like China and India have gone back to those sources, bringing down both prices and demand.
According to Harpauer, the industry believes where potash is now will likely remain the norm.
“We’ve all lived through those ebbs and flows of that natural resource revenue, which is why I caution pressures of spending it into the year-over-year operating, because if you bake it into your operating budget and then the natural resources prices fall or the volume falls, then you don’t know where you’re going to get that money to meet your expenses,” explained Harpauer.
The province’s expenses at mid-year are forecast to be up by $1.3 billion from budget, to $20.0 billion.
The largest driver there was agriculture, with expenses that were $853 million above budget. The government said that was due mainly to increased crop insurance claims as a result of the drought.
Dry conditions reportedly resulted in a 20 per cent dip in production in 2023.
Expenses for protection of persons and property – mostly due to wildfire response and evacuations during the summer – as well as education also showed marked increases from the budget, at $111 million and $271 million respectively.
The province’s gross debt is forecast to rise by $709.5 million from budget, to $31.6 billion, with the cost of servicing that debt to rise by about $10 million.
“Borrowing is increasing to finance capital, including investment into schools, highways, hospitals and other valued infrastructure,” the report said.
Net debt is forecast to be $15 billion at the end of the fiscal year, up $918 million from budget.
The government said the net debt as a percentage of gross domestic product is expected to be 13.3 per cent at the end of the fiscal year, the second-lowest such figure among the provinces.
The report noted that Saskatchewan had the highest economic growth among provinces in 2022, with real GDP growth of 6.0 per cent. An average of private sector forecasts says the province’s economic growth will be the second-highest among the provinces in each of the next two years, with real GDP growth of 1.6 per cent in 2023 and 1.3 per cent in 2024.
The minister had previously hinted about possibly looking at tax cuts in the next budget, but on Monday she said that’s usually one of the last things the government does when making up the document.
“I would say it’s not likely that we could do any tax cuts in this budget, but we are very early in our budget deliberations and we’ll see where the economy goes,” said Harpauer.
NDP, CTF reactions
The NDP said the Saskatchewan government’s refusal to rein in spending on international trips and what the Opposition called “costly pet projects” was part of the problem.
“Scott Moe has lost all credibility when it comes to managing taxpayer dollars. Once again, they’ve squandered a boom,” NDP Leader Carla Beck said in a media release. “They aren’t focused on the right priorities. They’re jetting off on a million-dollar trip to Dubai and massively overspending on MLA-owned motels.
“Instead of growing the economy, they’ve become more and more dependent on hiking taxes and costs on the people of Saskatchewan during an affordability crisis. We’re all paying more to cover the cost of their mismanagement.”
The Opposition pointed to Premier Scott Moe’s upcoming trip to Dubai and to the controversy surrounding Regina’s Sunrise Motel, owned by Saskatchewan Party MLA Gary Grewal. The Ministry of Social Services paid $172,000 to the motel in the past year to put up people needing shelter.
“This government is a mess,” Finance Critic Trent Wotherspoon said in the release. “Scott Moe and the Sask. Party have one of the worst fiscal records in Canada by a country mile. Families continue to suffer from higher costs, and instead of offering relief, families are getting stuck paying for this Sask. Party government’s mismanagement.”
The NDP noted the Sask. Party has balanced just one budget since 2015-16.
In a media release, the Canadian Taxpayers Federation said the Saskatchewan government failed to prepare for the downtown and taxpayers are paying the price. The report noted taxation revenue is up $414 million from the budget.
“This fiscal update needs to be a wakeup call for the government to get spending down,” CTF prairie director Gage Haubrich said in the release. “Taxpayers can’t afford to have the government waste anymore of their money on debt interest charges.”
— With files from 980 CJME’s Lisa Schick