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Harpauer still reporting surplus, but down from budget

First quarter projection is for a $485.5 million surplus, down $532 million from budget projection.
Finance Minister Donna Harpauer seen here when she spoke to reporters at the Legislature on the eve of presenting the budget.

SASKATOON - The province of Saskatchewan is still posting a surplus for 2023, but it's a surplus that isn’t as strong as was projected at budget time.

In their first quarter update released Thursday, Finance Minister Donna Harpauer announced a forecast of a $485.5 million surplus at first quarter.

That is down $532 million from budget, which the government attributes to higher non-cash pension expense, and spending to fight wildfires and to safely evacuate those impacted by the fires. The province is also forecasting lower resource revenue.

Here are highlights of the update according to the province's news release Thursday:

Revenue is forecast as $19.6 billion, down $123.7 million or 0.6 per cent from budget. The province says this is due largely to a $528.9 million reduction in Non-Renewable Resources revenue forecast with lower potash and oil prices, and lower-than-budgeted potash and oil sales forecasts. The resource revenue decrease is being offset by a combined $405.2 million increase across all other revenue categories, including tax revenue. 

Expenses are forecast as having gone up to $19.1 billion, up $408.2 million or 2.2 per cent from budget. 

The province states this is largely due to a combined $317.2 million increase in Education, General Government and Finance Charges, and to a non-cash increase in pension expense related to actuarial adjustments.

There is also an $89 million increase due to fighting the wildfires and safely evacuating those impacted.

"Saskatchewan's finances continue to be in a strong position, with a substantial surplus," said Harpauer in a statement Thursday.

"The forecast, however, clearly demonstrates the need to be prudent and manage spending carefully, as resource revenue is volatile and forecasts can change quickly due to global impacts on prices and production."

In their statement, the province maintains that their goal to retire up to $1 billion in operating debt is still on track.

"We will continue to pay down operating debt, as planned. We're able to do so because higher opening cash balances due to a strong year end in 2022-23 have offset the drop in the projected surplus," Harpauer stated.

"Sticking with our debt reduction plan is important, because paying down up to $1 billion in operating debt this fiscal year, combined with $1.5 billion in debt retirement last fiscal year, is resulting in projected annualized interest savings of $110 million - savings that go directly into supporting priority programs, services and infrastructure for Saskatchewan people.”