Higher oil revenues aren’t enough to improve Saskatchewan’s bottom line, as rising healthcare and disaster-related costs push the province’s projected deficit to $825 million. In a first-quarter financial update Thursday, Finance Minister Jim Reiter said the deficit is less than one per cent higher than projected at budget. “I’m a fiscal conservative, I want to get back to balance,” Reiter said. Reiter said there won’t be “any drastic cuts” to return to balance, but said the province will “be fiscally prudent, keep an eye on expenditures” and work to increase revenues. The province is forecast to bring in $331 million more in revenue than projected at budget, largely driven by higher oil prices. Reiter said every $1 increase in the average price of a barrel of oil translates to about $17 million for the provincial treasury, but cautioned that global oil markets remain volatile. The boost in oil revenue is being wiped out by higher spending. Expenses are forecast to come in 1.5 per cent, or $337 million, over budget. Healthcare spending alone is forecast to be $200 million, or 2.4 per cent, higher than budgeted. As several healthcare unions bargain new contracts, that spending could continue to climb. “Obviously we want to get as many agreements done as we can, and so we’ll have to make adjustments as we go,” Reiter said. “We’re going to make sure that we properly fund healthcare, and education, and all the services.” Protection of Persons and Property saw the largest percentage increase in spending — up 8.6 per cent, or $100 million — largely due to flood response costs. The province’s total gross debt is also forecast to be $65 million higher than projected at budget, largely due to additional borrowing needs at SaskPower. Reiter attributed the increased borrowing needs to capital projects and rising costs. Despite uncertainty surrounding U.S. trade, Reiter said the provincial economy has remained resilient noting no “dramatic drop in exports in Saskatchewan.”
