Released on November 29, 2021
Aspects of Saskatchewan's economy are performing well, underscoring the province's economic resilience and strength.
However, the severe and widespread drought this spring and summer meant substantially increased support was needed for the agriculture sector.
"The drought was unforeseen and farmers were hit hard this spring and summer," Deputy Premier and Finance Minister Donna Harpauer said. "Our government is here to provide support to Saskatchewan people when they need it. Absent the drought, we would have seen a significant improvement from budget and a much lower deficit, based on stronger revenue across all major categories."
A deficit of $2.7 billion is forecast, up $97 million from the budget forecast but a $29 million improvement from first quarter.
Revenue is forecast to increase from budget by $2.4 billion (16.5 per cent), with significant increases across all categories including $668.8 million in non-renewable resource revenue due to higher potash and oil prices.
"We are seeing indications, in many aspects of our economy, of a return to pre-pandemic strength in Saskatchewan even as the pandemic persists," Harpauer said.
Tax revenue is up $616.7 million from budget, reflecting higher Personal Income Tax and Corporate Income Tax due to higher 2020 assessments, as well as increased Provincial Sales Tax.
Federal transfers are up $542.6 million from budget, mainly for drought, pandemic, child care and municipal infrastructure funding.
Total expense is forecast to be up $2.5 billion (14.6 per cent) from budget, due to $1.8 billion for Crop Insurance claims, bringing the total crop insurance indemnity forecast to $2.4 billion for 2021-22. There is also $292.5 million in relief for livestock producers who faced high costs due to the drought.
Health expense is forecast to be up $250.0 million from budget due to pandemic and drug plan pressures. An increase from budget of $100.9 million in Protection of Persons and Property expense is due wildfires which emerged during a dry spring and summer, as well as continued costs of the pandemic.
The province's real GDP is forecast to grow by 3.6 per cent in 2021, an improvement from the budget forecast of 3.4 per cent and a substantial turnaround from the 4.9 per cent decline in 2020 which was caused by the economic impact of the pandemic and low oil prices.
"Saskatchewan has the highest growth in manufacturing sales and the second strongest growth in housing starts in the country so far this year," Harpauer said. "We are seeing many economic indicators trend up."
Employment year-to-date has increased by 13,730 jobs, or 2.5 per cent compared to the same time period last year. And Saskatchewan's employment rate of 62.6 per cent so far this year is second highest among the provinces.
"Our net-to-GDP ratio at March 31, 2022 is now estimated to be 19.4 per cent, projected to be one of the lowest ratios among Canadian provinces this year," Harpauer said. "And we continue to have the second-highest credit rating in Canada, when ratings from all three major rating agencies are combined."
For more information, contact:Jeff Welke