The province released their full budget on Monday which showed a $1.9 billion addition to the debt total that can be attributed to the COVID-19 pandemic.
According to the provincial budget, public debt will rise by $3 billion in 2020-21 including the $1.9 billion attributable to COVID-19.
In addition, a deficit of $319 million is now expected for 2019-20 as a result of “economic deterioration” over the final quarter of the year.
Additionally, oil investment and production in Saskatchewan are expected to decline by 37.1 per cent and 13.8 per cent respectively. Some projections say the price of oil will average $37 dollars a barrel in 2020 and rise to $48 a barrel in 2021.
The report says Saskatchewan is “seemingly well positioned” to face the challenges going forward. According to the province, agriculture exports were up 20.1 per cent year-over-year.
“Although total goods exported in April still fell by 8.2 per cent, other provinces experienced much larger declines,” the report said.
Real GDP is projected to decline by 6.3 per cent this year while nominal GDP is anticipated to fall by 12.8 per cent.
The province also said average employment in Saskatchewan in 2020 is forecast to decline by 15,800. The province said the economic growth outlook for 2021 is “positive.”
“Oil prices are expected to rebound as well next year as global growth picks up. Saskatchewan real GDP is forecast to grow by 4.6 per cent in 2021 while nominal GDP is forecast to rise by 7.2 per cent.”
The provincial budget said despite the ongoing success of the Re-Open Saskatchewan Plan, considerable uncertainty with respect to the pace and strength of the economic recovery exists, both in Saskatchewan and around the world.
“The fiscal outlook assumes that global measures to limit the spread of COVID-19 will be successful and that the economic impact of the recent pandemic will be relatively short. Any deviation from this assumed path of economic recovery has the potential to alter the 2020-21 revenue outlook.”
Finance Minister Donna Harpauer said the province entered the crisis in a strong financial position.
“Other provinces are expecting deficits that are comparably higher than ours. Saskatchewan was on track for a surplus in 2019-20 and 2020-21 prior to the COVID-19 pandemic and oil price collapse,” said Harpauer.
“The 2020-21 deficit is not a structural deficit. It is a pandemic deficit,” she added.
