Saskatchewan Budget Faces Potential $1 Billion Deficit, Economics Professor Warns
As the Saskatchewan government prepares to deliver its 2026-27 budget in mid-March, University of Regina economics professor Jason Childs suggests it wouldn't be unreasonable to see a deficit of $1 billion reported. The province's financial outlook has been significantly impacted by multiple economic shocks that have battered revenue streams.
Economic Shocks and Revenue Challenges
"It's kind of the way things have gone again this fiscal year," Childs said in a recent interview. "We got hit by two pretty potent shocks that would impact revenue: the canola tariffs and the oil prices. We did see the economy kind of slow down."
The province has faced particular challenges with declining oil prices and China's previous canola tariffs, though those tariffs are expected to be reduced by March 1. Additionally, Saskatchewan has experienced a spike in unemployment rates, further straining the provincial economy.
"Those are big problems and that's going to hurt our revenue side," Childs emphasized, noting that Saskatchewan's economy has been "beaten up" by these combined factors.
Budget Projections Versus Reality
The Saskatchewan NDP has criticized recent financial measures, suggesting the province is on track to tally a $1.08-billion deficit despite pledging a $12.1-million surplus last spring. This criticism came after the government sought an additional $654.7 million via special warrants on February 13 as a bridge to finish out the last six weeks of the fiscal year.
"Budgets almost never match reality, but it does happen that you miss by quite a bit on occasion," Childs observed, highlighting the challenges of accurate financial forecasting in volatile economic conditions.
Rising Healthcare Costs and Government Response
The cost to deliver healthcare—one of two factors Finance Minister Jim Reiter cited as causing the mid-year deficit—continues to rise significantly. Healthcare expenses make up more than half of the $654.7 million in top-up expenses filed earlier this month.
According to orders-in-council documents, the Ministry of Health is to receive an additional $338 million, including $284.8 million for the Saskatchewan Health Authority. Other significant allocations include $103.8 million to the Ministry of Agriculture (with $99.1 million for the AgriStability program that assists producers facing significant farming income losses) and $75 million to the Ministry of Social Services for income support programs.
Finance Minister Jim Reiter was not available for an interview to comment on current deficit projections, which stood at $427 million as of November when the mid-year forecast was tabled. Instead, a government spokesperson provided an emailed statement promising a "fulsome update" on Saskatchewan's third-quarter finances when the 2026-27 budget is presented.
Looking Ahead to the Budget Release
The province has not yet released its third-quarter financial report for 2025-26, leaving many questions unanswered about the exact financial position. However, Childs believes the combination of revenue challenges and rising expenses creates a difficult fiscal environment for the upcoming budget.
As Saskatchewan prepares for its budget announcement in mid-March, all eyes will be on how the government addresses these significant financial challenges while maintaining essential services and supporting economic recovery across the province.
