Thanks to a decrease in revenue related to the removal of the federal carbon levy and higher than expected costs for wildfire control and evacuation activities, the Saskatchewan government is now projecting a deficit of $349 million following the first quarter of 2025-2026.
Originally, the 2025-2026 budget passed in March predicted a razor-thin surplus of $12 million. However, the first quarter report released on Friday, August 22 shows total forecasted revenue to be $20.9 billion and forecasted expenses to $21.2 billion.
Deputy Premier and Finance Minister Jim Reiter said, “While economic uncertainty is creating financial challenges both nationally and globally, Saskatchewan’s financial position remains stable. We will continue to protect and advocate for the province’s economic interests.”
Total revenue is expected to be $172 million lower than budgeted largely due to a reduction in Government Business Enterprise income, including a $163 million decrease in SaskPower net income as a result of the federal government levy being removed from customer bills in the first quarter.
Non-renewable resources revenue is also forecast to decline by $30 million compared to budget due to lower oil prices and a higher exchange rate.
Meanwhile, total expenses after the first quarter are expected to be $189 million higher than originally budget, primarily because of an $80 million increase in wildfire costs and evacuation activities.
To align with the province’s immediate wildfire response, this expense is included in the first quarter report forecasts and will be addressed in a special warrant that will be released on August 25.
“Government remains committed to ensuring the necessary resources are available to combat Saskatchewan’s ongoing and devastating wildfire season,” Reiter said. “Our priority is to support firefighting efforts and help affected families and communities access the assistance they need as they work toward safely returning to their homes.”
There is also a $115 million increase in expenses associated with year-end updates to pension accrual assumptions.
Despite this turnaround, not all the news is negative: major private sector projects and housing construction, retail sales and labour market performance in Saskatchewan have remained among the strongest in Canada.
Saskatchewan also continues to demonstrate financial stability, maintaining the highest credit rating among the provinces when the ratings from all three major agencies are considered.
Further reinforcing the province’s strong fiscal position, Saskatchewan’s net debt-to-GDP ratio is projected to be 14.5 per cent as of March 31, 2026, an improvement over budget projections and the second-lowest among the provinces.