Finance Minister Donna Harpauer. (Canadian Press)

By paNOW Staff

three different scenarios

Province says worst case scenario for revenue decline could reach $3.3 billion

Apr 17, 2020 | 3:16 PM

The provincial government has released three different scenarios in relation to the economic impact of COVID-19.

The province said it was important to note that the projections were not explicit forecasts as it’s unknown how long the physical distancing requirements set out by Public Health are set to remain.

The 2020-21 revenue decline could range from $1.3 billion to $3.3 billion depending on the duration of the social distancing restrictions caused by the pandemic.

“We are less than three weeks into the new fiscal year and right now we just don’t know how long restrictions will remain in place in Saskatchewan, in Canada and around the world,” Finance Minister Donna Harpauer said. “That’s why it is still incredibly difficult to forecast with any certainty. We believe however it is important that we release these different scenarios, to let Saskatchewan people know just how much of an impact the pandemic is having on our economy and revenues.”

Each economic scenario included a number of factors, including the duration of the restrictions, how soon the resource prices can recover and the anticipated consumer behaviour once restrictions are lifted.

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GDP scenarios for the year are all negative and will range from an optimistic decline of 4.1 per cent, to a 14.9 per cent decline in the most pessimistic scenario.

Right now, the government is managing spending with amounts allocated in the Budget Estimates the province released March 18.

“Our government has committed to provide all financial resources necessary to address the COVID-19 pandemic, and this will likely result in spending increases beyond the amounts allocated in the 2020-21 Estimates,” Harpauer said.

“The 2020-21 deficit is not a structural deficit, it is a pandemic deficit. Saskatchewan will manage through this, because we have the strength, the foundation and the people to do it,” she said.

The media release said the province has strong management of its finances and has a solid fiscal foundation.

Prior to the pandemic, Saskatchewan was on track for a surplus. The release said Saskatchewan maintains the second highest credit rating in the country, with one of the lowest net debts as a percentage of GDP along with a “solid cash position.”

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panews@jpbg.ca