Premier Brad Wall says deficit will be higher than forecast
The government was hoping to get the deficit down to about $260 million in the budget
Saskatchewan Premier Brad Wall says the deficit in the upcoming provincial budget could be higher than initially forecast.
The government was hoping to get the deficit down to about $260 million in the budget that is to be tabled June 1.
"I think it's going to be higher than that," Wall said Friday at the legislature.
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"We haven't gone through the (finalization) process yet, but because of the softening in revenue, significant softening in resource revenue, we might be looking at a higher deficit than what we originally forecast at third-quarter for next year's budget."
In February, Finance Minister Kevin Doherty delivered the update for the third-quarter of the 2015-16 fiscal year.
At that time, Doherty said the province was expecting a $427-million deficit and aiming for a $259-million deficit in the 2016-17 budget coming in June.
But lower resource prices have hit hard.
"There has been a softening in potash prices ... in terms of the forecast. There's no expectation of strengthening uranium prices," said Wall.
"And we've seen with oil that there's been some gain, but it's been outstripped by an increase in the value of the Canadian dollar. Saskatchewan people will know that our exports are valued in Canadian dollars and so this is going to be problematic as well. The dollar's gone up faster than (and) with greater intensity than the price of oil, and so...the usual offset is not there."
However, the premier pointed out the deficit won't be "nearly the scale" of deficits seen in Alberta or Newfoundland and Labrador.
The two provinces, which tabled their budgets last week, are both facing huge budgetary holes where oil and gas revenues used to be.
Newfoundland and Labrador's budget included numerous tax and fee increases, as well as a deficit-fighting levy of up to $900 a year for top earners.
"They had to make those decisions based on their own realities. I don't expect that to be the case here at all," said Wall.
The premier still believes the province will get back to a balanced budget by 2017-18.
The premier also said he hopes this is the bottom of commodity prices and noted that oil is slowly starting to move away from lows hovering around US$30 a barrel. The June contract for benchmark crude rose 57 cents to US$43.75 a barrel Friday.
"We should have an expectation and an optimism that we're going to see prices move forward, move upward steadily — maybe not as quickly as we'd like — but steadily."
Opposition NDP finance critic Cathy Sproule says she's not sure the premier "is being realistic" about getting back to a balanced budget in a year.
She also says the government needs to clearer about how much the deficit has grown.
"That's the information we've been urging this government to be up-front about with (people), but they haven't been. That's all information that the government's sitting on right now and we need to get it out," said Sproule.