Forest fires and the declining price of oil have taken a big bite out of Saskatchewan’s finances.
The books on the first quarter of the 2015-2016 fiscal year were opened up Monday and they show the province currently has a projected deficit of $292 million. The spring budget predicted a surplus of $107 million.
“While it’s concerning, obviously, it is manageable,” stated Finance Minister Kevin Doherty.
Total revenue is now forecast at $14.04 billion. That’s down $237.8 million from the budget. Expenses are now at $14.33 billion, which is up $161 million from the budget.
Doherty said the current deficit only accounts for about two per cent of the total $14 billion budget.
A close watch is being kept on oil prices, which were estimated to be $57 a barrel in the spring budget. Prices have dropped below that and that’s part of the reason the province is now predicting it’ll spend more money than it has.
“It is extraordinarily volatile right now on the oil side. That’s obviously put some pressure on our revenue side as well as some of our consumption taxes that go along with that.
That being our sales tax and that being fuel tax.”
“At the same time, our diversified economy continues to show strength in other areas. Our population continues to grow, our unemployment rate is the lowest among provinces, and we continue to show the strongest growth in wholesale trade in Canada,” he added.
The province is also on track to spend roughly $100 million more on wildfires than what had been budgeted. Doherty said that figure includes fighting the fires and also evacuating people from their homes while protecting those structures.
The government outlined how it will reduce discretionary spending through staffing restraint and other operating reductions, citing contract savings, administration and IT. Some projects and initiatives may also be deferred.
Doherty said he’s asked ministries and crown corporations to find savings. He’s confident the province can bring its books back to balance by year’s end.
“Our government has a strong track record of managing the province’s finances when challenged by volatility and we will meet the challenge again.”