The Saskatchewan government is prioritizing affordability promises from the fall election campaign and highlighting a modest forecasted surplus of $12 million in its 2025-26 budget, that comes at a time of uncertainty amidst an ongoing trade war with the United States.
Finance Minister Jim Reiter delivered the fiscal update to the assembly on Wednesday – kicking off the spring sitting of the Legislature, that will run through April and into May.
The province says the balanced budget and small surplus is a strong signal of financial management.
Revenues are expected to be $21.1 billion, a six per cent increase from last year, while total expenses are predicted at $21 billion, an increase of $909 million from the 2024-25 budget, the province said.
Confidence in its financial position has the province predicting an increasing surplus over the next three years, reaching a projected $216.7 million for the 2028-29 fiscal year.
Reiter admitted that if the tariff situation continues for an extended period – the province will be pushed into a deficit.
“The fact of the matter is, provincial budgets that have been released, it’s not like they have a separate account of money that they are setting aside just in case for contingency,” Reiter said.
“We don’t know what the tariffs are going to do or what the cost is going to be, they’re changing by the day it seems. You do see an analysis in the budget, Ministry of Finance officials have done an analysis, but it just shows how uncertain times are.”
According to the province, the budget is based on the average private sector forecast as of Feb. 19, 2025 – prior to any tariffs coming into effect.
The budget analysis on the tariff threat looks at a worst-case scenario of the effects caused by one year of the trade action imposed by the U.S. on March 4 – which includes a 10 per cent tariff on Canadian energy and 25 per cent on all other Canadian exports.
Assuming that an average of 20 per cent of orphaned exports from Saskatchewan find new markets and 50 per cent of displaced imports can be sourced from new suppliers – the tariff scenario could reduce the value of Sask. exports to the U.S. by $8.2 billion (30.4 per cent), reduce real GDP to $4.9 billion (5.8 per cent), and reduce revenue to the province by up to $1.4 billion.
Reiter said the government believes the best way to weather tariffs is to be in a strong financial position.
“We focused on education, health care, community safety and affordability. Beyond that we’re very prudent with expenditures to keep costs low to get in a surplus position,” Reiter said.
“If the tariffs are on for an extended period of time it will push us into a deficit position, but if they’re not we are comfortable with where we are sitting,” he added.
Premier Scott Moe claimed that what makes Saskatchewan’s budget unique is that there are no last-minute claw backs from election and throne speech promises due to U.S. tariffs.
“This is unlike what we see in some other areas of the nation right now where we have provincial governments that are walking away from commitments that they may have made in a campaign or commitments they may have made over the course of the past year in the name of tariffs and other reasons they may be faced with,” Moe said.
Moe added while the ongoing trade war represents the most significant economic challenge Saskatchewan has face in some time, they are “not walking away from commitments they made to Saskatchewan people.”
NDP leader Carla Beck criticized the budget’s lack of contingencies for the ongoing trade war with the U.S.
“In this budget we see no measures to protect workers, producers, business and industry from tariffs,” she told reporters Wednesday.
Beck said the budget makes it seem like Scott Moe and the Sask. Party are “asleep at the wheel at a time when Saskatchewan people need them to be alert and responsive.”
“Unfortunately, this budget will be very little comfort for people who are worried about their jobs and their futures because of Donald Trump’s tariffs,” Beck said.
Beck argued that tariff contingency funds do not count as “walking away from commitments” and pointed to Alberta, New Brunswick and B.C. including them in their recent budgets.
“But this Sask. Party budget offers no such help, only cuts to health care and education,” she said.
According to the province, gross debt is sitting at more than $34.8 billion and is expected to grow to more than $38.3 billion for the 2026-27 budget.
Gross debt is the sum of all liabilities that a province owes and is obligated to pay. It includes loans from financing debts, debts related to pensions and other obligations.
The current fiscal year’s budget that finishes at the end of March is expected to record a $660 million deficit.
Affordability
As promised throughout last fall’s provincial election campaign by the Sask. Party – the budget includes several affordability initiatives that the province says will make life cheaper for all residents.
Many of the measures were already announced as part of the Saskatchewan Affordability Act – which was introduced in December. The province says more than $250 million in tax savings are included in the budget – in addition to the $2 billion in annual affordability measures.
In a budget news release on Wednesday, the province highlighted several tax breaks including raising the child exemption and seniors supplement by $500 per year for the next four years, touted by the province as the largest personal income tax reduction in Saskatchewan since 2008.
There is also a planned increase of two per cent to monthly income assistance provided through the Saskatchewan Income Support (SIS) program and Saskatchewan Assured Income for Disability (SAID) programs, along with a 25 per cent increase to the disability and caregiver tax credits.
Beck called the two per cent increase “fine” but not sufficient to meet the constant cost of living increases, with Wotherspoon noting it will be about $40 per month.
“I think anyone who has paid rent, gotten groceries, put gas in their car or has had to try to balance a budget understands that $40 a month on top of many years of not meeting inflation and needs doesn’t go very far,” Beck said.
For parents and guardians, the province says it is planning to double the Active Families Benefit refundable tax credit from $150 to $300 per child and is doubling the income threshold to qualify for the program to $120,000. The goal is to make children’s sports, arts, cultural and recreational activities more affordable, the province added.
The province also announced the return of the Home Renovation Tax Credit. Homeowners will be able to save up to $420 per year in renovation expenses, seniors are eligible to save as much as $525.
For students, an announced increase to the Graduate Retention Program of 20 per cent to a max of $24,000 is planned, the province said.
The small business tax rate will remain at one per cent which the province claims will help save more than $50 million in corporate income taxes for more than 35,000 small businesses in Saskatchewan.
A reduction to education property tax mill rates was also announced. It was done to absorb the increase in property assessment values and aims to make this assessment year revenue neutral, saving property owners more than $100 million annually, according to the province.
The budget did list two tax increases. The Provincial Sales Tax (PST) will now be included on vape products. Additionally, the annual road service charge on electric vehicles registered in the province will double from $150 to $300. Both changes take effect on June 1, 2025.
