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April 07, 2021SASKATCHEWAN BUDGET 2021-22 Saskatchewan's 2021-22 Budget estimates a deficit of $2.61 billion in 2021-22, up from $1.87 billion forecast for 2020-21. Over the next three fiscal years, Saskatchewan's budget deficits are projected to narrow, but not to close. The Saskatchewan Budget is not expected to be balanced until 2026-27.
In its 2020-21 fiscal plan, the Province of Saskatchewan presented its expectation of near term revenue declines and expenditure increases associated with the COVID-19 pandemic. The 2021-22 fiscal plan updates and extends these projections. Revenue declines in 2020-21 were milder than anticipated, while expenditures grew somewhat more slowly. In 2021-22, revenues are projected to recover almost to their 2019-20 levels, but expenditure growth accelerates. In the next three fiscal years, expenditures are projected to fall and then rise while revenues continue to grow at a steady pace.
Saskatchewan's budget deficit improved to $1,865 million for 2020-21, which is smaller than anticipated in the 2020-21 Budget. Saskatchewan's budget deficit is expected to peak at $2,611 million in 2021-22 before narrowing in subsequent fiscal years.
Saskatchewan's budget deficit is expected to peak at 3.2% of GDP in 2021-22 before falling to 0.9% by 2024-25 as the deficit declines and the economy grows again.
The footprint of Saskatchewan's government relative to its GDP is expected to peak at just over 21% in 2021-22 before falling to just above 19% by 2024-25 as the economy recovers while expenditure growth is limited.
Saskatchewan's net debt is forecast to have risen to 19.0% of GDP at the end of 2020-21. In 2021-22 this is projected to rise to 21.7%. In the subsequent three fiscal years, Saskatchewan's debt is projected to rise to 26.3% of GDP.
As a commodity-producing region, Saskatchewan's economy faced dual shocks from both COVID-19 as well as the decline in oil investment that followed the steep drop in oil prices in 2020. Saskatchewan's real GDP is estimated to have fallen by 4.2% in 2020 (7.8% in nominal terms). As commodity markets recover and high crop yields are sustained, Saskatchewan's real GDP is expected to rebound with growth of 3.4% in 2021 (5.9% nominal) and 3.2% in 2022 (4.1% nominal). Rising business and consumer confidence is expected in the near term with continued vaccine rollout.
Key Measures and Initiatives
Saskatchewan's 2021-22 Budget prioritizes protecting the population from COVID-19, building infrastructure for public service and growing the economy as the world recovers from COVID-19.
Key initiatives include:
- $90 million for COVID-19 response (vaccination, protective equipment, lab capacity, physician costs)
- Increased mental health and addiction funding of $23.4 million (to $458 million)
- Hiring 100 continuing care aides
- $3.1 billion in capital investments
- $174.8 million for a 10% electricity rebate
- $285 million Auto Fund Recovery Rebate
- Establishing international trade and export offices in China, India, Japan and Singapore
- Royalty relief for methane emission reduction programs.
- Extending the Home Renovation Tax Credit to include expenditures made in 2022
- Reinstating the Active Families Benefit ($150/year per child)
- The small business tax rate (set to 0% on October 1, 2020) will be returned to 1% on July 1, 2022 and to 2% on July 1, 2023
- Extending the Technology State-up Incentive through 2025-26
- Introducing a new Vapour Products Tax and adding a heat-not-burn category to the tobacco tax to bring these products in line with existing tobacco taxes
- Adding a tax of $150 per year for electric vehicles to equalize contributions to road infrastructure with internal combustion vehicles that pay fuel taxes
Saskatchewan Budget 2021-22
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