By Sarah Mills/CJME News Staff

UPDATE: $1B deficit forecast for Sask.

Nov 22, 2016 | 7:25 AM

UPDATE: The financial picture for Saskatchewan is far from rosy as a $1 billion deficit is forecast by the end of the fiscal year.

Finance minister Kevin Doherty explained the deficit was exacerbated by the low price of oil and potash. 

“It has now been a full two years since the oil price started to drop in the fall of 2014, and we are seeing a much greater effect on corporate and personal income tax and the Provincial Sales Tax,” he said. 

The deficit sits at $1.042 billion.

From the budget in June, taxation is down $400 million, non-renewable resources – like oil, gas and potash – are down $179.6 million and there’s a $236 million loss in repayments from the Worker’s Compensation Board.

Lighting it up

P.A.'s Zablocki leads Regina to victory on Day 4 at Esso Cup

17h ago

WORLD SOFTBALL

Group stages officially set for Men's Softball World Cup in P.A.

Apr 24, 2024

Safety first

Safety concerns and tips surrounding discarded needles in P.A.

Apr 23, 2024

The one bright spot is an expected increase in federal transfers to the tune of $321.5 million.

In spite of this black hole, government will spend $285 million more than forecast in the second half of the fiscal year. Higher crop insurance claims and pressures in health and social services are to blame.

In total, government saved $217 million in restraint measures and savings. It has also announced a public sector hiring freeze.

“Public sector salary across government is now about $3.6 billion a year, so if we are going to control government spending, we have to control labour costs,” Doherty said.

Government is also hinting that more spending restraint measures will be implemented into the coming year.

—

The Saskatchewan government released its mid-year financial report Tuesday morning giving a clearer indication of how big the deficit is.

In the June budget, the province was in the hole by $434 million and just last week the finance minister was hinting revenues are down $600 million from what was forecast.

It is largely due to the drop in taxation and non-renewable resource revenues, like oil, gas and potash.

Tax increase, job losses and program cuts could be potential solutions moving forward to close the gap.

smills@cjme.com

On Twitter: @smillsSK

Editor’s Note: This story was updated at 1:26 p.m. on Tuesday, Nov. 22 with new information from the Sask. government about the bduget deficit.