Saskatchewan, in a mid-year fiscal update, projected a $348.3 million deficit for 2018-19, compared with its forecast of $306 million in August. It had predicted a $365.3 million deficit in its April budget.
The province heavily depends on revenues from production of crude oil and of potash, a crop nutrient.
While North American benchmark crude oil prices rose more than the government expected in the second quarter, bigger than usual discounts applied to Canadian prices more than offset the rebound.
Western Canadian oil traded at record-large discounts to the North American benchmark this autumn due to full pipelines and limited railway capacity to clear an oil backlog.
Saskatchewan expects to collect $718.2 million in revenue in the 2018-19 fiscal year from oil and gas production, down $87.7 million from its August prediction, but $18.1 million more than it forecast in its budget that was set in April.
The right-leaning Saskatchewan Party is in power, led by Premier Scott Moe.