Crop insurance and drought relief boosting Saskatchewan deficit: finance minister

Dry weather is costing Saskatchewan big this year. The impact of crop insurance and drought relief is boosting the provincial deficit.

“If you backed out the expense of crop insurance as well as the livestock producer support we would almost be balanced,” Finance Minister Donna Harpauer said Monday at a press conference detailing the province’s mid-year financial report.

“That is how significant that support was for our agricultural producers.”

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The province is projecting a deficit of $2.7 billion this year, up $97 million from initial budget forecasts, despite a forecasted revenue increase of $2.4 billion.

Expenses are up around $2.5 billion from initial budget projections. Crop insurance and drought relief account for $2.1 billion of that increase. The mid-year report notes that assistance for livestock producers has cost $292.5 million this year.

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The total crop insurance indemnity forecast for 2021/2022 is $2.4 billion — the highest it’s ever been.

Healthcare spending is up $250 million over budget projections.

That includes an increase of $220 million for the Saskatchewan Health Authority’s pandemic response, $30 million for the Ministry of Health for pharmacy vaccine delivery, and usage of the Saskatchewan Prescription Drug Plan.

“It was a very, very challenging year,” Harpauer said, adding that the costs associated with transferring patients out-of-province weren’t factored into projections.

“To my knowledge we have not been billed yet. We’ll be billed later. It’s not unlike when we took patients from Manitoba when they were stressed and overwhelmed, I don’t think we billed them until all the patients had returned.”

Costs related to “protection of persons and property”, are up $101 million from projections, due to a worse-than-average wildfire season.

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Tax revenue forecasts are up $616.7 million, which Harpauer said stems from higher personal and corporate income tax assessments. Provincial sales tax revenue is also projected to increase from budget projections.

Federal transfers are up $542.6 million from budget.

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Real GDP is forecast to grow by 3.6 per cent in 2021, up 0.2 per cent from the budget projection.

Harpauer touted growth within the province’s investment portfolio, such as the SGI auto fund, as promising.

She cautioned, however, that federal revenue support is helping lift mid-year finances.

“We are rebounding faster than anticipated,” Harpauer said. “But we have not spiked the ball. Some of the revenue is one-time only, such as the COVID-19 pandemic support from the federal government.”

“In our revenue is also the federal portion of the support for livestock producers,” she added.

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Crop insurance and drought relief boosting Saskatchewan deficit: finance minister