Provincial deficit to increase due to agricultural struggles

A tough year for farmers is having an impact on the province’s bottom line.

The government of Saskatchewan revealed the province’s deficit is expected to increase by $126.5 million, bringing the 2021-22 forecast deficit to $2.74 billion during the province’s first-quarter update Thursday.

“We are projecting there will be crop insurance claims increased by $588 million and a little over a week ago we announced a drought assistance program for our livestock producers which will cost $119 million,” said provincial finance minister Donna Harpauer.

“The federal government — and we do thank them — has stepped up and they will be partners with the livestock drought assistance program which means our livestock producers, the cattle producers will get the $200 a head we had hoped for.

“I always said every time I introduce a budget, I hold my breath until the crop is in the bin.”

She said the resource revenues continue to remain strong and the province is receiving transfers from the federal government which will help the province reduce how much of a loss it will absorb.

Revenue is expected to increase from budget by about $757 million with about $360 million of the increase from non-renewable resources such as oil and potash.

Federal transfers are up by about $401 million from budget.

Harpauer that with agriculture, the hope is things can return to normal next year.

“With agriculture, hopefully it is just one year and it will be back and be a strength and shining light for our budgets in the future,” Harpauer said.

Harpauer pointed out she also used to be a producer in the province, noting 1988 and 2002 were both high years for crop insurance claims.

“The general cycle within agriculture is if you have a disastrous year, the next year will be average, hopefully, and then it becomes very strong,” Harpauer said. “Agriculture is an extremely resilient industry.”

Harpauer said there has been a lot of investment coming into the province, saying nearly $10 billion in projects announced by the private sector set to begin in the coming year.

For this reason, Harpauer doesn’t believe the current issues will throw a wrench it the province’s plans to eventually return to budget.

Harpauer said there was an additional $90 million put into the budget for COVID expenses within the healthcare system. The province has seen a rise in cases with many calling it the fourth wave of COVID in Canada.

But Saskatchewan NDP finance critic Trent Wotherspoon believes Saskatchewan people need more from the province.

“Producers and farms and ranchers are facing devastation due to a drought. We have a fourth wave of COVID that’s coming directly at us … We have kids and teachers and education staff that are heading back to classrooms after an unprecedented disruption to their learning with classrooms that have been further cut,” Wotherspoon said.

“We’ve seen a government missing in action. We’ve seen a government that’s taken the summer off.”

Wotherspoon said the current response by the government has been “inadequate to the challenge folks face.”

“Crops that have been devastated, livestock producers that have no access to feed, that didn’t have access to water and had poisoned water and were having to sell off cattle which sets back our industry in a huge way,” Wotherspoon said.

Wotherspoon said the government hasn’t adjusted crop insurance so people are getting half the price of the market price for their commodities.

And with COVID numbers on the rise, Wotherspoon believes the province has been missing in action.

“What’s at risk once again are people’s lives, their livelihoods, our economy and our kid’s classrooms,” Wotherspoon said. “The fiscal cost of this short-sighted, knee-jerk, sort of watch the train wreck come to our finances and that shows up by way of the cost in our ICUs and in our hospitals.”