Saskatchewan could see its provincial revenues go down between $1.3 billion and $3.3 billion in the 2020-21 year due to the pandemic, according to projections by the provincial government.
Donna Harpauer, the province's finance minister, released three scenarios based on how fast economic restrictions are lifted and how oil prices recover.
“It is unknown at this time how long restrictions will remain in place in Saskatchewan, Canada, and worldwide,” the Humboldt-Watrous MLA said April 17. “It is still incredibly difficult to forecast revenue with any degree of certainty.”
In the province’s best case scenario, which assumes an economic recovery by June and oil prices that are $30 per barrel, there will be a loss of $1.3 billion in revenue in provincial revenues, along with 12,900 job losses.
The mid-range scenario, which assumes a recovery by September and oil prices of $25 per barrel, would see $2.2 billion less in provincial revenues and a loss of 15,800 jobs.
In the worst-case, which assumes a recovery by January and oil prices of $15 per barrel, there would be a loss of $3.3 billion in provincial revenues and a loss of 27,200 jobs.
“The duration and severity of the current economic environment, along with consumer and business behavior after the crisis will ultimately determine how large of a revenue decline we will face,” Harpauer said.
The finance minister said there were no plans to reduce the $14.15 billion in spending announced on March 18 – and that there could be more spending aimed at helping the province deal with the pandemic.
Harpauer said the province’s fiscal foundation was strong, with a small surplus expected before the pandemic.
“The 2020-21 deficit is not a structural deficit. It is a pandemic deficit. We will manage through it.”
As for reductions in government spending or increases in taxes in the future, Harpauer said the province would have to look at that when they prepare the next budget.
“I long for the days where I just worried about a crop failure or a flood,” she said.
Ryan Meili, the leader of the Saskatchewan New Democrats, said the projections are concerning and that the job losses would have a major impact on the economy.
“I think about the people across the province who are looking at those numbers and wondering: is that my job? Is that my family that's not going to have any income coming in?” he said.
“We talked about revenue loss for the province, but it's that income loss for families and households that's going to have the biggest and the most negative impacts for us.”
The NDP leader called for the government to act to stimulate the economy, as well as to help families and business through the pandemic.
He also called on the government to set something up to allow the opposition to scrutinize the government’s actions while the legislature is closed due to public health measures.
“There's never been a plan that's made worse by having an extra set of eyes to make sure that things are going right.”
