Saskatchewan’s provincial deficit persists despite higher oil revenue

Higher oil prices, geopolitical uncertainty and Mother Nature are all affecting the Saskatchewan government’s bottom line.

The provincial government released its first-quarter financial update with a deficit now sitting at $825 million, slightly worse than the $819 million projected when the budget was released in March. But finance minister Jim Reiter said provincial economy remains strong.

Total revenue is up $331 million from budget, primarily stemming from the conflict in the Middle East. In fact, the province said the West Texas Intermediate forecast increased to $75 US per barrel, up significantly from $59.75 forecasted in the budget.

Total expenses are up $337 million from the budget, with the biggest pressures relating to growing demand for health care and the cost of coping with the damage left behind by spring flooding in parts of Saskatchewan, particularly in the northeast.

“In the ag theme, there’s a $24 million increase due to unseeded crop insurance claims resulting from excess moisture in the spring,” Reiter added.

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Major hailstorms have also put a dent in provincial coffers.

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By and large, however, Reiter said the province is weathering the storm through the geopolitical uncertainty and trade tensions with the United States. The exceptions are Saskatchewan’s manufacturing, forestry and honey industries, which have been targeted by U.S. tariffs.

“In certain industries, they’ve been hit very hard. But most have not been hit. So, Saskatchewan has been very fortunate in that regard,” said Reiter.

Reiter said the province’s net debt-to-GDP ratio is projected to be 14.9 per cent as of March 31, 2027, which is an improvement from the 16.1 per cent projected in the 2026-2027 budget. Saskatchewan’s net to debt-to-GDP ratio remains the second best among all provinces.

NDP calls on government to make life more affordable

The Saskatchewan NDP said the government had a chance to use higher oil revenue to help fund affordability measures in Saskatchewan.

“But yet is still growing the deficit and the debt and is not offering an ounce of relief to the people of this province,” said Wotherspoon.

The NDP says costs have gone up on everything from food to housing to gas prices and is still calling for a pause in the gas tax and PST on children’s clothing.

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Reiter pointed out that the government continues to recognize challenges around affordability through measure announced in the March budget.

“That’s why our government continues to implement our plan to lower personal income taxes for everyone across the province on a permanent basis,” Reiter added.

“In the 2026-2027 budget, permanent enhancements to broad based tax credits, an indexation to tax credits and tax bracket will provide tax savings of $200 million this year.”