Finance Minister Donna Harpauer provides a first-quarter update to the province's 2019-20 budget on Aug. 29, 2019. (Keenan Sorokan/650 CKOM)

By Keenan Sorokan

Balanced Budget

Province still eyeing balanced budget after first-quarter update

Aug 29, 2019 | 3:39 PM

The province believes its budget is slated to remain on track after releasing its first update of the fiscal year on Thursday.

Speaking at a cabinet office in Saskatoon, Finance Minister Donna Harpauer said the government’s first-quarter report for its 2019-20 budget is striking the right balance for Saskatchewan.

“We believe it’s the right balance for Saskatchewan citizens,” Harpauer said. “We think it is very important to balance our budget so that the services that we provide for our citizens in health care, education and social safety nets are sustainable into the future.”

A forecast surplus of $25.8 million was reported in the first quarter, down $8.6 million from an originally budgeted $34.4 million.

Revenue is forecast at $15.38 billion, up $355.3 million, representing a 2.4 per cent increase. Expense is forecast as $15.35 billion, up $363.9 million.

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The largest cost is what Harpauer called a non-cash item. Pension liability, which is very dependent on interest rates, rose significantly in the first quarter.

“When the interest rates fall, our pension liability rises, so that is indeed what happened, which is why we were concerned,” Harpauer said.

Harpauer added that bringing the pension liability into the summary of financial statements represents a big swing in any budget. Pension expenses represented a $285.2-million increase in the first quarter report.

With the surplus margin remaining slim at $8.6 million, Harpauer wasn’t exactly confident when looking at budget updates for the rest of the year.

“I will always be nervous,” she said. “Until that surplus is much larger, I’m very mindful that this is very thin.”

With only a quarter of the fiscal year behind her, Harpauer still has crops, trade issues and weather to worry about before her next update.

“I would like to say it’s early,” she said. “Q2 will be more reflective because a lot of the unknowns will be known at that time.”

Flooding and wildfire uncertainty has passed with little costs, and the latest crop report indicates an average crop for farmers.

“We’re not projecting any massive problem in agriculture — frost is always our next concern,” Harpauer said.

Trade issues remain a problem for the province and farmers.

“The trade disputes that are happening globally are affecting Saskatchewan, we say, disproportionately,” Harpauer said, pointing to the ongoing dispute with China and Saskatchewan’s canola sector.

“We are hoping that there aren’t other trade issues coming in the future, but we know there is a lot of discontent and confrontation globally.”

The population also continues to grow. Between April 1, 2018 and April 1, 2019, Saskatchewan’s population increased by 10,295 to 1,169,131 people.

Another focus of the province is paying down debt — down $267.5 million from the initial budget projection — but Harpauer understands that goal isn’t very sexy as an election budget approaches.

“I don’t think we have room right now,” Harpauer said.

More to come.