Why the volatile price of oil can help, or hurt, the Saskatchewan budget
CBC
Saskatchewan has repeatedly used the revenue from its natural resources to help drive annual budgets.
Now, with the price of oil skyrocketing, Saskatchewan Finance Minister Jim Reiter has downplayed the future of that relationship.
"I think the best contingency we can have in this province is to not rely too much on natural resources," Reiter said this week.
That comment has raised eyebrows.
Keith Willoughby, Dean of the Edwards School of Business at the University of Saskatchewan, told Saskatoon Morning host Candice Lipski that natural resources are the "bread and butter" of the provincial budget.
"It's useful to look at opportunities that might exist out there to try to expand, but as a province it's hard to get away from the fact that we are reliant upon those natural resources to help fuel our province and to support our people," Willoughby says.
Relying on the price of a volatile but lucrative resource like oil can have significant consequences for the province.
In the 2025-26 budget, the government estimated the average price of West Texas Intermediate (WTI) oil over the year would be $71 US a barrel.
Revenue from oil and natural gas were budgeted to make up 5.1 per cent of the province's revenues. The budget document also noted that each $1 drop from that $71 US mark would cost the province $17.9 million in oil revenue.
The $71 US benchmark was immediately ridiculed by the official Opposition; NDP finance critic Trent Wotherspoon putt the budget document through a shredder.
In 2025, the price of WTI has only hit or surpassed the $71 US benchmark three times: at the start of the year, for a few weeks in June, and right now, driven by the escalating conflict in the Middle East.
It’s why Wotherspoon has continued to slam the government’s financial outlook.
"In a resource economy, you have to build a solid foundation with respect to your budget. So you can't be overly optimistic or rosy in picking those numbers," Wotherspoon said this week.
"Time and time again, we've seen a government who has built a poor foundation within that budget."
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