Saskatchewan projecting $292M deficit; province blames wildfires, low oil prices

The Canadian Press

REGINA — Saskatchewan is forecasting a $292-million deficit this year mainly due to low oil prices and the cost of fighting wildfires that forced thousands of people from their homes this summer.
Finance Minister Kevin Doherty announced the red ink Monday in the province’s first-quarter report for the 2015-16 fiscal year.
The government projected a surplus of just under $107 million in its March budget.
“Lower oil prices combined with an unprecedented number of forest fires and the largest evacuation in Saskatchewan’s history are putting pressure on the province’s finances,” Doherty said in a release.
Total revenue is forecast at $14 billion — down almost $238 million — with expenses up $161 million.
Doherty said the Saskatchewan Party government will work hard in the coming months to balance the books through what he called careful management and restraint. That includes unspecified cuts to discretionary spending and deferring some projects and programs.
“All ministries, Crown corporations and all government agencies are exercising spending restraint while ensuring we continue to provide vitals services.”
The province estimates it will spend about $100 million more than originally budgeted on wildfires. Other expenses that are higher than expected include flood costs and additional services for family services and people with disabilities.
The NDP Opposition said the government was partly responsible for the projected deficit.
NDP deputy leader Trent Wotherspoon said the province should have had a better wildfire plan.
He also said the growing cost of the Regina Bypass project and money spent on consultants show the Saskatchewan Party are bad managers.
“This government hasn’t been able to balance the budget on most years during the best years and has piled on debt every step of the way,” he said.
The government is predicting its revenues based on a West Texas Intermediate oil price of US$49.50 a barrel, down from US$57.15.
Along with lower oil revenues, the province is forecasting decreased revenues from taxes, Crown land sales, uranium and coal.
On the plus side, potash revenues are projected to be higher due lower US-dollar potash prices.
The fiscal update says private-sector forecasters still expect Saskatchewan’s economy to grow this year, but by 0.4 per cent, half of what was projected in March.
Doherty said the outlook for Saskatchewan remains positive due to its growing population, low unemployment and diversified economy.
Alberta also presented its first-quarter update on Monday. Finance Minister Joe Ceci said the province is on track to record a $5.9-billion deficit this year as the oil crunch hits families and businesses.
Oil and gas investment is expected to fall more than 30 per cent in Alberta, including sharp declines in retail sales.
Ceci said the deficit could grow to $6.5 billion if low oil prices persist.
— By John Cotter in Edmonton, with files from CKRM