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Inflated oil prices from war in the Middle East were not enough to pump Saskatchewan’s budget out of a projected deficit, which stayed nearly static at $825.2-million.
Original budget projections made in March for the 2026-27 fiscal year put the province in an $819.4-million deficit. In the provincial fiscal update Thursday, both Saskatchewan’s expected annual revenue and expenses rose for the fiscal year, ending in March 2027.
Saskatchewan budgeted West Texas Intermediate – the North American benchmark oil price – at an average of US$59.75 per barrel for the year, much lower than the new expectation of US$75 per barrel. Well-head oil price also rose from a budgeted $62.92 to $79.35.
Global oil prices have surged since the U.S. and Israel launched their war on Iran in late February, just before Saskatchewan tabled its 2026-27 budget in mid-March. The conflict forced one-fifth of the world’s oil tanker shipments to anchor rather than cut through the Strait of Hormuz.
That conflict-driven, non-renewable resource revenue is largely behind the $331-million increase in expected revenue for the budget year.
Projected health-care costs largely beat back the revenue rise in Saskatchewan, with service demands, inflation and salaries expected to cost $200 million more than expected. Overall, expenses jumped to $337 million more for the fiscal year.
The cost of flood responses and recovery is also anticipated to drive up expenses alongside more costly crop insurance claims because of how the wet spring affected seeding.
Saskatchewan also took on $65 million more debt than budgeted, for a total of $43.6 billion, largely because SaskPower needed to borrow more money because of a lower net income, the quarterly report said.
SaskPower’s net income is expected to be $59.5 million, less than half of the $138.4 million that it was budgeted to profit throughout the year.
Despite that, the outlook for the provincial net debt-to-GDP ratio has improved, expected to drop to 14.9 per cent from 16.1 per cent. That ratio is the second lowest in Canada, next to the 9.4 per cent Alberta is expecting to reach by the end of March 2027, the report states.
Neighbouring Alberta also benefited from rising oil prices, a boon that lifted its budget projections further out of the red in its most recent fiscal update.
This report by The Canadian Press was first published Aug. 27, 2026.
The Canadian Press
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