WINNIPEG, Manitoba, Nov 22 (Reuters) - The western Canadian province of Saskatchewan expects to run an C$805.6 million ($601.99 million) deficit in 2016-17, up from the budgeted forecast for a shortfall of C$434.2 million, the government said on Tuesday.
Slumping prices for crude oil and potash produced in Saskatchewan have hit the province’s treasury hard, contributing to a C$322 million drop in provincial revenue, Finance Minister Kevin Doherty said in a statement.
The deficit figure is C$1.04 billion after factoring in a distribution of past earnings from the government’s Workers’ Compensation Board and a pension adjustment.
Premier Brad Wall’s Sask Party government plans to borrow C$500 million to fund government operations due to the larger deficit. Public debt is projected to be C$15.2 billion at March 31, 2017, up C$447.7 million from the budget estimate.
Saskatchewan, home to potash fertilizer mines operated by Potash Corp of Saskatchewan, Mosaic Co and Agrium Inc, lowered its average price forecast for potash in 2016 to $177.69 per tonne, from $205.10 in the budget.
It expects the price of West Texas Intermediate oil in 2016 to average $43.50 per barrel, up $3 per barrel from the budget estimate. ($1 = 1.3389 Canadian dollars) (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Jeffrey Benkoe)