Saskatchewan's financial outlook has taken a dramatic turn, with the province now projecting a substantial deficit of $427 million according to a mid-year report released Tuesday. This represents a stark reversal from the $12 million surplus initially forecast in March as part of the 2025-26 budget.
From Surplus to Deficit: What Changed?
The province's financial situation has deteriorated significantly since the first quarter, with the current projected deficit increasing by $79 million. Finance Minister Jim Reiter presented the updated figures, highlighting two primary factors driving the budgetary shortfall: unprecedented wildfire expenses and mounting healthcare pressures.
Total revenue projections show some positive movement, now forecast at $21.13 billion - an increase of $82 million from initial budget estimates. This improvement stems largely from $273 million in additional federal transfers and $129 million in own-source revenue.
Economic Challenges and Export Declines
The provincial economy faces significant headwinds, particularly in the export sector. Year-to-date in 2025, exports have fallen by a substantial $1.4 billion, which the report primarily attributes to decreasing global oil prices.
Non-renewable resource revenue has also taken a hit, projected to be down $93 million due to the combination of lower oil prices and a higher exchange rate affecting international sales.
Spending Pressures Mount
On the expenditure side, total projected expenses have reached $21.56 billion, representing an increase of $521.2 million from the original budget. The breakdown reveals where the additional spending is concentrated.
Wildfire-related costs have added $295 million to provincial expenses, reflecting the severe fire season that impacted many communities. Healthcare represents another major pressure point, with an additional $250 million allocated to address what the province describes as "health care utilization pressures."
Pension expenses have also contributed to the increased spending, adding another $114 million to the total. Some relief comes from lower-than-expected crop insurance claims, though the government notes these costs won't be finalized until the third quarter of the budget cycle.
The mid-year financial update paints a challenging picture for Saskatchewan's fiscal health, demonstrating how quickly external factors like natural disasters and healthcare demands can transform a balanced budget into a significant deficit.
