July 20, 2024
Sask. projects $1B surplus for 2023-24, plans to pay down debt | CBC News

Sask. projects $1B surplus for 2023-24, plans to pay down debt | CBC News

The Saskatchewan government is projecting a $1-billion surplus for 2023-24 and opting to use that money to pay down debt.

“There are no tax increases and no new taxes included in this budget, helping keep life affordable for Saskatchewan people. When taxes, utilities, and housing costs combined are considered, our province is the most affordable place to live in Canada for a family of four,” Finance Minister Donna Harpauer said.

She said the government discussed the possibility of another round of affordability cheques to adults in the province but decided against it, instead choosing to be more targeted with spending.

Harpauer said Saskatchewan cannot rely on “volatile” resource revenues every year. She said her government doesn’t see this year’s large surplus as a trend.

“We have to be very careful as a government to not take one-time revenue and bake it into our year-over-year operational costs.”

Last year, the government projected a $463-million deficit for the coming year and said it didn’t expect a surplus until 2026-27.

Those forecasts turned out to be significantly more pessimistic than the outcome. By the first-quarter update, the government was projecting ending the 2022-23 year with a $1-billion surplus.

Harpauer said the government wants to pay down operating debt with this year’s projected $1.017 billion surplus. 

“With a growing economy and strong finances in Saskatchewan, our government will pay down up to $1 billion in operating debt this fiscal year, reducing interest costs and investing those savings into needed services, programs, and capital.”

The government is forecasting four year's of surpluses.
The government is forecasting four year’s of surpluses. (CBC Graphics)

The government said that, including last year, debt retirement and lower borrowing have generated $117 million in annual interest savings.

Gross debt is forecasted to hit $30.9 billion by the end of March 2024.

Revenues for the coming fiscal year are projected at $19.7 billion, an increase of $2.5 billion or 14.7 per cent from the 2022-23 budget. The top three revenue generators are:

  • Taxes: $9.6 billion.
  • Federal transfers: $3.6 billion.
  • Non-renewable resources: $3.3 billion.

Harpauer said the government decided not to increase or expand taxes. Last year, the government placed PST on entertainment events and gym memberships, before eventually rescinding the gym membership tax a few months later.

This are the government's forecast of economic indicators.
The government’s forecasts are based on these predictions for economic indicators. (CBC Graphics)

With the province’s finances in the black, Harpauer said the government chose not to reduce or remove the PST on certain items, a move the Opposition has been calling for.

Harpauer said the “difficult decision” to increase and expand the PST in the past was done to reduce reliance on resource revenue.

“I don’t think we are in the spot to try and walk some of that back. I have a lot of optimism we are going to get there though, because there is a large private sector investment for growth in our province.”

The government based Wednesday’s budget on the following predictions:

  • WTI Oil price  — $79.50 US/barrel.
  • Potash — $396  per KCl tonne US/KCI tonne.
  • Canadian dollar — $0.74 US.
  • Real GDP — up 1.8 per cent.
  • Retail Sales —  up 2.4 per cent.

Spending is also going up, but not at the same rate as revenues. The government said it will spend $18.7 billion in 2023-24, up 5.9 per cent from 2022-23 budget.

Saskatchewan's revenue is projected at 19.7 billion for 2023-24.
Saskatchewan’s revenue is projected at 19.7 billion for 2023-24. (CBC Graphics)

Health

Ministry of Health spending is pegged at $6.9 billion, an increase of $431 million or 6.7 per cent. Operating funding for the Saskatchewan Health Authority is rising by $191.4 million.

Harpauer said the spending is “strengthening the health-care system and taking significant steps to further attract, train and retain doctors, nurses and other key health-care professionals in a growing province.”

The budget features $98.8 million for the government’s Health and Human Resources Action Plan. The plan is funded through three ministries.

More than $55 million is for an effort to recruit 250 full-time and expand part-time positions in rural and remote areas of the province.

In the advanced education portfolio, the government is committing $25.2 million to add 550 seats in 18 health training programs.

The budget includes an additional $42.5 million for surgeries, with a goal of reducing the surgical wait-list to “pre-COVID levels” by the end of March 2024.

Mental health and addictions spending now account for $518 million, which is 7.5 per cent of the overall health budget.

Here's how Sask. revenue sources breakdown in 2023-24.
Here’s how Saskatchewan’s projected revenue sources break down in 2023-24. (CBC Graphics)

Education

Saskatchewan’s 27 school divisions will see a combined increase of $49.4 million, or 2.5 per cent, from last year. The government will also spend $7 million to retain more than 200 educational assistants. The ministry provided $7 million to hire the EAs last year.

The province is launching the Saskatchewan Distance Learning Corporation at a cost of $23 million. It will offer online education with classes from kindergarten to Grade 12.

The largest portion of new spending in the education budget is $72.1 million in child care and early learning funding from the federal government, so that Saskatchewan can offer $10-per-day child care.

Social Services

The Ministry of Social Services is budgeted $1.43 billion, an increase of $46.7 million, or 3.4 per cent, from last year.

Saskatchewan Income Support (SIS) recipients will see both the Adult Basic Benefit and Shelter Benefit increase by $30 per month. People who use alternative heat sources on SIS will see a $30 increase as well.

Saskatchewan Assured Income for Disability (SAID) clients will receive $30 per month in living income benefits. SAID clients under 65 who live in personal care homes will receive up to $684 more per month.

The Seniors’ Income Benefit will rise by $30 per month to $360. The Personal Care Home Benefit will increase by up to $400 per month.

The ministry is spending an additional $6.7 million for support services for people with intellectual disabilities.

Opposition says budget spends in wrong places

The NDP Opposition said the 2023-24 budget falls short of helping address the rising cost of living.

“If you’re a parent struggling to make ends meet, this budget does not help you. Budgets are about choices, and the Sask. Party chooses to neglect the issues keeping regular people up at night,” said Opposition Leader Carla Beck.

The Opposition called the increases to income support “a meagre dollar-a-day bump.”

Beck said the budget does not address issues facing health-care workers and in the province’s classrooms.

“I really thought we’d see some sort of investment in our K-12 system in this budget. We don’t see that. We don’t see an investment that even meets inflation.”

Finance critic Trent Wotherspoon said the government is “flush with cash,” but is spending it in the wrong places.

“This budget offers no new cost of living relief for families struggling to pay their bills at the end of the month.”

Capital Spending

The government has budgeted $3.7 billion for capital projects this year:

Projects include:

  • $98.6 million for the Prince Albert Victoria Hospital.
  • $38 million for the Weyburn General Hospital.
  • $20 million for a La Ronge long-term care home.
  • $776 million on provincial roads and highways.
  • $152.3 million for education capital (five new schools, planning and construction of 15 new schools, and the renovation of five existing schools).

Future projections

The government is projecting three straight years of surpluses:

  • 2024/25: $208 million.
  • 2025/26: $134 million.
  • 2026/27: $101 million.

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