Sask. forecasting record $2.6B deficit with increased pandemic spending on health, education

Saskatchewan's 2021-22 budget shows the province is still feeling the financial affects of the COVID-19 pandemic, posting a forecasted $2.6 billion deficit for the fiscal year.

For the second year in a row, the budget focuses heavily on health, education and social services spending to ease assist with pandemic-related costs.

Deficits are projected to continue over the next three years, at $1.7 billion in 2022-23, $1.2 billion in 2023-24 and $770 million in 2024-25.

Based on these projections, Saskatchewan will see seven straight years of deficits through 2025, after posting deficits in each budget since 2018-19.

Scott Moe said a Saskatchewan Party government would balance the budget by 2024, during the 2020 provincial election campaign. Speaking Tuesday, Moe said economic revenue forecasts have changed since the fall, forcing that target to change.

Forecasts for both revenue and expenses are up from 2020-21. Total expense of $17.1 billion is expected this fiscal year, up $1 billion, or 6.3 per cent, from last year's budget. These expenses are also up $1.1 billion from the current 2020-21 forecast.

Forecast revenue also rose by $830 million from last year, or 6.1 per cent, projected at $14.5 billion for 2021-22.

The province is projecting real GDP growth of 3.4 per cent in 2021, following a 4.2 per cent contraction in 2020.

"While Saskatchewan's economy has fared better than most through the global health crisis, with continuing high levels of employment, the pandemic has still had a significant impact on the province's economy and finances," Donna Harpauer, Saskatchewan's Minister of Finance, said.

NDP RESPONSE

The Saskatchewan NDP said this budget comes at a critical time in the province's history.

Leader Ryan Meili criticized the government for a lack of action on the pandemic, jobs for Saskatchewan people and diversifying the economy.

"Specifically, this Sask. Party budget doesn't get the job done," Meili said. "It fails families by taking no responsibility for this Sask. Party's lack of action to prevent the severe second and third wave of COVID-19 in the province, which has cost hundreds of lives and left many more sick and suffering."

He said this budget fails to invest in Saskatchewan classrooms and long-term care.

"Simply put, it is an uninspiring ordinary budget that isn’t fit for the challenges of today," Meili said.

Meili also called out Premier Scott Moe saying the budget shows he has broken three key campaign commitments.

"The premier said he would balance the budget by 2024, knowing full well that he would not. That lie has shown to be the case, to be confirmed today," Meili said.

"He also said there would be no tax increases, but instead property taxes are going up once again under this government."

The NDP leader said the premier also broke his commitment to add 300 new staff for long-term care facilities.

"I can't understand why the premier would break such an important commitment, after the tragedies we have seen in long term care in Saskatchewan," Meili said. "On these three major commitments and on so much more, Scott Moe has mislead the Saskatchewan people."

RECORD HEALTH SPENDING

Saskatchewan is forecasting record health spending for the second year in a row, spurred by continued spending on COVID-19 resources.

The 2021-22 health budget is $6.54 billion, up $359 million or 5.8 per cent from last year.

As part of the increase, $90 million is slated to support the COVID response.

Here's how the rest of the big spending in the budget is broken down:

MINISTRY OF HEALTH

The budget includes $6.12 billion for 2021-22. An additional $23.4 million is being provided for mental health and addictions programs, for a total of $458 million, up 5.4 per cent from last year.

The government is also providing the Saskatchewan Health Authority with a $3.96 billion grant, up $221.4 million - or 5.9 per cent - from 2020-21.

A total of $6 million will be used to hire around 100 continuing care aides for long-term care clients.

Everett Hindley, the Minister of Mental Health and Addictions, said the government will hire 108 continuing care workers this year, as a step towards eventually hiring the full 300 continuing care workers promised during the 2020 election campaign.

"It is our full intention, we will be hiring the full complement of 300 [continuing care aides]. This year, the budget allotment is to hire the first 108 continuing care aides in Saskatchewan, and we'll hire the rest as quickly as we can," Hindley said.

An additional $6.6 million for Emergency Medical Services will provide additional ambulances in Regina and Saskatoon. STARS will also receive $1.4 million to add a new helicopter to respond to rural and remote sites.

MINISTRY OF EDUCATION

Education spending is up to $3.75 billion in this budget, rising $391.3 million or 11.6 per cent from last year. The majority of spending goes towards supports for pre-k to grade 12 students, with $2.66 billion forecasted for 21-22. This is up 59.6 million, or 2.3 per cent, from 20-21.

A total of $1.96 billion in operating funding will be provided to Saskatchewan's 27 school divisions. That funding is up 19.2 million from last year. This money addresses a 2.0 per cent salary increase for teachers, per their collective bargaining agreement.

On the COVID-19 front in schools, $20.7 million in federal-provincial safe schools funding from 2020-21 will carry over for this year's budget. The province allocated $134.2 million of the $155 million provided last year.

Post secondary institutions will receive $678.5 million this year, up 4.4 per cent or $28.4 million from last year. An additional $60 million will be invested over the next two years, to help schools with the COVID-19 recovery.

MINISTRY OF SOCIAL SERVICES

The Ministry of Social Services will receive $1.34 billion in the 2021-22 budget, up $54.5 million or 4.2 per cent from last year.

This is included in a total social services and assistance budget of $1.56 billion.

Funding increases will support added benefits for seniors through the Seniors Income Plan, the enhancement of services by the Canadian National Institute of the Blind and Saskatchewan Deaf and Hard of Hearing Services; and services working with people with intellectual disabilities and at-risk children, youth and families.

A total of $19 million has also been added for the Saskatchewan Assured Income for Disability program, including a $9.1 million increase to address the needs of those with intellectual disabilities.

JUSTICE AND CORRECTIONS

The Ministry of Justice and Attorney General will receive $163.6 million in the 2021-22 budget, up $8.4 million or 5.4 per cent from last year.

The Public Complaints Commission will receive $287,000 to develop a Serious Incident Response Team (SIRT) to provide oversight to Saskatchewan's police, bringing the province up to speed with oversight in other Canadian jurisdictions.

An increase of 23.8 million will bring the Ministry of Corrections and Public Safety budget up to $530.8 million for 2021-22, rising 4.7 per cent.

CAPITAL PROJECTS

The government will spend $3.1 billion on capital projects in 2021-22. This includes $162 million for health care capital, $830 million for roads and highways, $33.1 million for municipal infrastructure and 189.9 million for education.

  • Grenfell long-term care facility - $3.6 million
  • La Ronge long-term care facility - $7.6 million
  • Planning for long-term care facilities in Estevan, Watson and Regina - $1.1 million
  • Weyburn hospital planning - $1.4 million
  • Urgent care centres in Saskatoon and Regina - $5.7 million
  • Highway twinning and passing lanes - $520.1 million
  • Phase one of Lake Diefenbaker Irrigation project - $18.9 million
  • 21 ongoing educations capital projects - $101.9 million

TAX CREDITS

The Saskatchewan Government also amended some tax credits for 2021-22.

Saskatchewan will introduce an annual tax of $150 for each electric vehicle registered in the province beginning October 1. The tax serves as a substitute for the Fuel Tax that applies to other vehicles in the province through purchases at the pump. The Fuel Tax covers road maintenance costs in the province.

The Saskatchewan Home Renovation Tax Credit provides a 10.5 per cent tax credit on up to $20,000 of eligible home renovations done between October 1, 2020 and December 31, 2022, beginning with the 2021 tax year. This could save home owners up to $2,100, according to the Sask. Party.

Expenses eligible for the proposed tax credit include permanent additions to a home, but not furniture, appliances or maintenance such as a new furnace or carpet cleaning.

The province is also set aside $4 million to reinstate the Active Families Benefit. The benefit will encourage youth to enroll in sport, recreation and cultural activities. Eligible families will receive $150 per year per child, and an additional $50 per child with a disability.

The government said approximately 34,000 children and youth are eligible for this credit.

The province will also be increasing the Saskatchewan Advantage Scholarship from $500 to $750 annually per eligible student. $7.1 million has been set aside to fund the scholarships.

With files from CTVNewsRegina.ca's Janelle Blakley