English
Saskatchewan’s provincial deficit has widened slightly to $825 million in the first quarter of the 2026-2027 fiscal year, edging past the $819 million shortfall forecast when the budget was released in March. Finance Minister Jim Reiter acknowledged the gap but maintained that the provincial economy remains fundamentally strong, even as higher oil revenues failed to fully offset rising expenditures.
Oil Prices Rise, But Spending Rises Further
Total provincial revenue climbed $331 million above budget projections, driven largely by elevated oil prices linked to ongoing conflict in the Middle East. The West Texas Intermediate crude forecast rose to $75 US per barrel, a significant jump from the $59.75 per barrel the government had originally projected.
Stay connected to every major update — subscribe and follow us on the PhoenixQ website and across our social media platforms.
Despite that revenue boost, total expenses increased by $337 million over budget. The two largest spending pressures were growing demand for health care services and the financial toll of spring flooding, particularly in northeastern Saskatchewan.
Agricultural losses added further strain. Reiter noted a $24 million increase in costs tied to unseeded crop insurance claims, stemming from excess moisture during the spring planting season. Major hailstorms across the province also contributed to the budget pressure.
Tariffs Hit Select Industries Hard
Reiter said Saskatchewan has largely navigated the uncertainty created by U.S. trade tensions and broader geopolitical instability. However, he acknowledged that some sectors have not been spared.
The manufacturing, forestry and honey industries have faced direct hits from 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,” Reiter said.
On the debt front, the province projects its net debt-to-GDP ratio will reach 14.9 per cent by March 31, 2027. That figure improves on the 16.1 per cent projected in the original budget and keeps Saskatchewan ranked second best among all Canadian provinces on that measure.
NDP Pushes for Affordability Relief
The Saskatchewan NDP criticized the government for failing to direct higher oil revenues toward affordability measures for residents. Opposition critic Trent Wotherspoon argued the government had a clear opportunity to ease financial pressure on families but chose not to act.
“But yet is still growing the deficit and the debt and is not offering an ounce of relief to the people of this province,” Wotherspoon said. The NDP renewed its calls for a pause on the gas tax and the removal of the provincial sales tax on children’s clothing, citing rising costs across food, housing and fuel.
Reiter pushed back, pointing to tax measures announced in the March budget as evidence of the government’s commitment to affordability. He highlighted permanent personal income tax reductions for all Saskatchewan residents, along with enhancements to broad-based tax credits and the indexation of tax brackets. “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,” Reiter said.
The Saskatchewan government’s first-quarter update reflects a budget environment shaped by volatile commodity markets, extreme weather events and ongoing trade uncertainty — factors that continue to complicate fiscal planning heading into the remainder of the fiscal year.
