Saskatchewan is now forecasting an $825 million deficit for the 2026–27 fiscal year, $6 million more than projected when the provincial budget was introduced in March.

The province’s first-quarter financial report forecasts total revenue of $21.7 billion and expenses of $22.6 billion.

Revenue is expected to exceed the original budget projection by $331 million, driven mainly by a $320 million increase in anticipated non-renewable resource revenue. The government attributes much of the gain to higher oil prices resulting from the ongoing conflict in the Middle East.

Saskatchewan has raised its West Texas Intermediate oil-price assumption to US$75 per barrel, up from the US$59.75 used in the provincial budget.

However, the additional revenue is being offset by an estimated $337 million increase in expenses.

The province says health-system pressures—including rising demand, inflation and compensation costs—are responsible for much of the increase. Flood-response and recovery measures, along with higher Crop Insurance claims for land left unseeded because of excessive spring moisture, are also adding to provincial spending.

Deputy Premier and Finance Minister Jim Reiter said the government remains committed to maintaining essential programs and services while responding to emerging financial pressures.

Economic outlook improves

Despite the deficit, the government says Saskatchewan’s broader economic outlook has improved since the budget was released.

Strong construction activity and improved commodity prices are expected to help Saskatchewan remain among Canada’s fastest-growing provincial economies. The province projects that real gross domestic product growth will rank third among the provinces in 2026 and second in 2027.

Exports increased by 11.6 per cent during the first six months of 2026 compared with the same period last year. Major private-sector projects and housing construction are also supporting economic activity.

Saskatchewan’s net debt-to-GDP ratio is now forecast at 14.9 per cent as of March 31, 2027. That is lower than the 16.1 per cent projected in the budget and would remain the second-lowest ratio among Canadian provinces.

The province also says Saskatchewan continues to hold the highest credit rating among provincial governments.

Opposition questions government’s fiscal management

Opposition Finance Critic Trent Wotherspoon described the first-quarter results as “damning,” arguing that the government is increasing spending despite receiving hundreds of millions of dollars in additional resource revenue.

Wotherspoon said Saskatchewan residents are not receiving meaningful cost-of-living relief and renewed the NDP’s call for the province to suspend its fuel tax.

He also criticized what he characterized as repeated spending overruns and called on the government to remove American alcohol from Saskatchewan liquor-store shelves in response to recent United States trade measures.

The updated $825 million deficit is close to the original budget forecast, but it follows a difficult fiscal year for the province. Saskatchewan ended 2025–26 with a $947 million operating deficit after initially projecting a $12 million surplus.

The complete first-quarter financial report is available through the Government of Saskatchewan.