Saskatchewan faces projected deficit driven by higher crop insurance payouts

Saskatchewan is facing a projected deficit of $250 million for the current fiscal year, according to the provincial government’s mid-year financial report.

The report released on Monday highlighted increased expenses of $1.3 billion, driven primarily by the summer drought’s impact on agriculture and a decline in projected resource revenues.

In a press conference, Finance Minister Donna Harpauer said that the drought led to a 20% reduction in production, triggering higher crop insurance payouts and an additional $853 million allocated to agriculture.

Harpauer also pointed to a decrease in forecasted potash revenues, highlighting how the invasion of Ukraine by Russia has impacted commodity prices and production levels.

Despite sanctions, potash from Russia and Belarus continued to flow into key markets like China and India, according to Harpauer.

“We rely totally on the forecasts of the industry themselves,” the minister said. “So, I don't think they were certain when the market would return to Russia and Belarus.”

While acknowledging the potential for drier years ahead, Harpauer additionally stated that there are no immediate plans to increase the agriculture budget.

She said the province remains committed to ongoing projects with no reduction in capital spending. She also acknowledged that some projects might experience delays, but she emphasized the flexibility of the budget.