Saskatchewan fiscal update: More revenue, more spending, smaller deficit

REGINA — The Saskatchewan government says higher oil and potash prices will mean more money for the province this year.

But Finance Minister Donna Harpauer says she's not sure that situation will last and that's why the government must balance its budget next year.

"I don't have confidence," she said Monday. "I have been ... involved with govenrment for a number of years now and I've seen really strong prices and I've seen them plummet overnight."

The provincial Finance Ministry released its first-quarter update showing a deficit of $306 million, nearly $60 million smaller than forecast in the April budget.

Revenue is predicted to be almost $170 million more than expected thanks largely in a boost to the forecasted price of oil.

But more spending on health care, social services and public-sector pensions will eat up a good portion of that windfall.

"We are borrowing, or projecting to borrow, within this budget. We still have a deficit," Harpauer said. "That shows us how critical it is to come back to balance so that our income coming in and our expenses going out are equitable."

The government is planning to spend $20 million extra on health care, because more people are using the system, and $20 million more on social services because of an increased caseload.

Changes to interest rates also mean more than $50 million in extra pension expenses.

(The Canadian Press, CJWW)

The Canadian Press