Canada's Saskatchewan forecasts smaller, C$262.2 mln deficit

Mon Nov 30, 2015 11:30am EST
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By Rod Nickel

WINNIPEG, Manitoba Nov 30 (Reuters) - The Western Canadian province of Saskatchewan said on Monday that its projected deficit looks to be smaller than previously predicted, due to cost-cutting and increased revenues from Ottawa.

The province's 2015/16 deficit, its first in two decades, looks to be C$262.2 million ($196.68 million), down from a C$292 million forecast in August.

Finance Minister Kevin Doherty said in a mid-year report that higher-than-budgeted net income from government businesses - including telecommunications and natural gas utilities - also helped offset sliding oil and potash prices from which Saskatchewan collects royalties.

Saskatchewan has until this year remained in the black even as most provinces ran deficits when their economies slowed. Premier Brad Wall's right-leaning Saskatchewan Party government faces an election in April.

Canada's biggest wheat-growing province expects to spend about C$14.3 billion for the year ending March 31, and collect roughly C$14 billion in revenue.

Saskatchewan estimates the price of West Texas Intermediate oil to average $49.50 per barrel in 2015/16, the same assumption it made in August, but down from the budgeted $57.15 per barrel.

The province sees potash prices averaging $282 per tonne in 2015/16, down from the $294 per tonne it forecast in August.

Saskatchewan's public debt is forecast to rise to C$13.1 billion by March 31 - slightly less than budgeted - from C$11.7 billion a year earlier,

Its operational debt, which excludes debt held by government-owned corporations, health authorities and school divisions, is expected to remain C$3.8 billion. ($1 = 1.3331 Canadian dollars) (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Nick Zieminski)