Crop insurance claims push Sask. into record $2.7B deficit: mid-year financial report

The Saskatchewan government is projecting a $2.7-billion deficit in its mid-year financial update, which was released Monday morning.

According to Finance Minister Donna Harpauer, the shortfall is largely due to an expected $2.4 billion in crop insurance claims — $1.5 billion of which have already been paid out.

"The drought was unforeseen and farmers were hit hard this spring and summer," Harpauer said in a news release.

"Absent the drought, we would have seen a significant improvement from budget and a much lower deficit, based on stronger revenue across all major categories."

The deficit projection is up by $97 million from the budget forecast, but down $29 million from the first-quarter update.

Aside from the crop insurance claims, other expenditures putting pressure on the province's pocket book include $292.5 million in relief for livestock producers, who also faced high costs due to the drought.

On the health front, the province is forecast to spend $250 million on "pandemic and drug plan pressures," $100.9 million more than expected. On top of COVID-19, the government said the wildfires this past summer also played a role in that increase.

The total expense forecast sits at $2.5 billion — 14.6 per cent more than planned in the budget.

The province is also set to see $2.4 billion (16.5 per cent) in revenue, due to higher potash and oil prices. 

Tax revenue is up $616.7 million from the budget as well. The government attributes that number to higher personal and corporate income tax, due to higher 2020 assessments and an increase in provincial sales tax.

The mid-year financial report also shows Saskatchewan has seen a 2.5 per cent increase in jobs (13, 730 more) over the last 10 months compared to the same period last year.