Finance Minister Donna Harpauer speaks at an embargoed news conference prior to the release of the Saskatchewan Budget in Regina, Wednesday, March 23, 2022. THE CANADIAN PRESS/Liam Richards
REGINA – Saskatchewan’s bank account remains relatively unchanged while its bottom line continues to be affected by Russia’s invasion of Ukraine, global supply shortages and rising inflation.
The province is reporting a $1.1 billion surplus in its mid-year financial update, an increase of over $50 million from last quarter.
The Saskatchewan Party government says the province brought in more than $2.4 billion in the first six months of the year, mostly from a rise in oil and potash production.
“We are to a certain degree benefiting “¦ from what’s happening globally because of what we have here: food, fertilizer and fuel,” Finance Minister Donna Harpauer said Tuesday.
“We feel that we will have a relatively strong position (in 2023), because there will be a demand for all three of those commodities.”
Saskatchewan has used some of its new revenue to dole out inflation-fighting cheques to residents – $500 for every adult – and to pay down debt.
It has also spent $7.5 million to help settle over 3,000 displaced Ukrainians.
“We feel we absolutely have a compassionate reason to be able to do this for Ukraine,” Harpauer said. “Many of our residents are of Ukraine ancestry.”
Harpauer added: “We feel they will be a huge asset to our labour stressors here in the province.”
The last time Saskatchewan saw this large of a windfall was in 2008-09, when it reported a $2.97 billion surplus.
Potash has been doing the heavy lifting in bringing in revenue, with oil to a lesser extent, said deputy finance minister Max Hendricks.
Canada is the top potash producer in the world, with Saskatchewan producing 30 per cent of the global production, followed by Russia and Belarus.
Amid global shortages, Nutrien Ltd. announced earlier this year it would ramp up its annual potash capability to 18 million tonnes by 2025, and create more jobs.
“When the province is in a strong and growing fiscal position, it becomes attractive to investment,” Harpauer said.
Potash prices have slowed in the second half of the year, a trend that could continue as increased supply from Russia and Belarus finds its way to market, the government said.
“We’re seeing oil already dropping significantly from where it peaked earlier in the year. Potash has been more steady, but there still has been some softening,” Harpauer said.
Despite this, she projects Saskatchewan’s economic growth will still be relatively strong next year and the province’s gross domestic product will grow 1.4 per cent in 2023.
Opposition NDP finance critic Trent Wotherspoon said he wants to see the province spend its new cash by offering more affordability relief for people.
He called on the government to cancel its rate hike on power and energy bills, and to scrap the recent provincial sales tax added to entertainment events.
“The (fiscal update) offers no lasting, long-term affordability relief for Saskatchewan people and it’s incredibly disappointing to see this government fail that important test for Saskatchewan people,” Wotherspoon said.
This report by The Canadian Press was first published Nov. 29, 2022.
