(Reuters) - The western Canadian province of Saskatchewan is forecasting a C$2.4 billion ($1.77 billion) budget deficit in 2020-21 as it grapples with shocks from the coronavirus pandemic and low oil prices.
“This is a pandemic deficit, not a structural deficit,” Saskatchewan Finance Minister Donna Harpauer told reporters at a news conference. The province, she added, had been on track to present a balanced budget before the pandemic hit.
“I am confident that as Saskatchewan’s economy recovers, our revenues will also recover and we will get back to balance in the coming years without having to cut programs and services,” she said.
Saskatchewan unveiled a fiscal plan in March that did not contain any of the usual revenue forecasts, citing economic uncertainty because of the pandemic.
Provincial revenues for the 2020-21 fiscal year are forecast at C$13.6 billion, down C$1.2 billion, or roughly 8%, from the previous year. The province said the decline was because of economic shutdowns tied to the coronavirus pandemic as well the oil price shock.
Located in the Canadian prairies, Saskatchewan’s economy is heavily reliant on oil, gas and potash revenues. The province is also a significant agricultural producer.
Overall spending is projected to increase by C$1.1 billion to C$16.1 billion, a 7% increase compared with last year. That figure, the province said, includes record spending on healthcare, which is forecast at C$6.18 billion.
Budget 2020-21 estimates the price of West Texas Intermediate (WTI) to be $30 per barrel.
Reporting by Kelsey Johnson in Ottawa; Editing by Chris Reese and Jonathan Oatis