Saskatchewan on Wednesday forecast a deficit of a C$463 million ($369 million) in the 2022-23 fiscal year, less than a fifth of last year’s C$2.6 billion deficit, as stronger oil and potash prices bring in more revenue.
The Saskatchewan Party government, led by Premier Scott Moe, expects the removal of pandemic restrictions and strength in oil and gas prices, potash, and exports to drive economic recovery. Saskatchewan expects deficits to continue shrinking and said it was on track for a balanced budget in fiscal year 2026-27.
The budget assumes an average North American oil futures price of $75.75 per barrel during its fiscal year, generating C$867.5 million in royalties.
The province, home to the world’s biggest potash industry, accounting for about one-third of annual global production, said it expects revenue to rise by 18.5% to C$17.2 billion in the fiscal year starting in April. Spending is projected to increase by 3.1% to C$17.6 billion.
Potash revenue is budgeted at C$1.5 billion in 2022-23, up from the 2021-22 forecast of C$419.8 million, reflecting a higher average price forecast.
Potash prices are near a 10-year high, and the recent sanctions on Russia and Belarus, the second- and third-largest potash suppliers, are fuelling fears of food shortages globally. The potash price is forecast to increase by 48% in 2022, contributing to Saskatchewan’s strong economic outlook, the provincial government said in the budget.