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Forest Fires and Falling Oil Price Impact Provincial Finances

Released on August 31, 2015

Restraint Measures Being Implemented To Restore Balance

Finance Minister Kevin Doherty today released the 2015-16 First Quarter Financial Report, which shows that forest fires and the decline in oil prices have put the province’s finances into a deficit position after the first quarter of the fiscal year.

Doherty said the government will work hard to bring the province’s finances back to balance by the end of the year through careful management and restraint measures.

“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.  “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.

“Our government has a strong track record of managing the province’s finances when challenged by volatility and we will meet the challenge again.”

Total revenue for 2015-16 is now forecast at $14.04 billion, down $237.8 million from budget.  Total expense is now forecast at $14.33 billion, up $161.0 million from budget, putting the current projected deficit for the fiscal year at $292.0 million.

Given the fiscal pressures and continued volatility of world markets and the oil price, the government will reduce discretionary spending through staffing restraint and other operating reductions (contract savings, administration and IT, for example).  In addition, the government will defer projects and initiatives where possible and work with its third-party partners to also reduce discretionary spending in their organizations.

“Our government will be working hard to bring the province’s finances back to balance by year-end, to keep Saskatchewan strong,” Doherty said.  “All ministries, Crown corporations and all government agencies are exercising spending restraint while ensuring we continue to provide vital services to Saskatchewan citizens.”

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For more information, contact:

Jeff Welke
Finance
Regina
Phone: 306-787-6046
Email: jeff.welke@gov.sk.ca
Cell: 306-536-1185

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