Saskatchewan: Sowing Deficits, Hoping for Balance

Highlights

• Saskatchewan’s Budget 2026 marks a clear deviation from last year’s balanced path, with higher‑than‑planned program spending driving a $1.2B deficit in fiscal year 2025–26 (FY2026) and delaying balance until FY2031 (graph 1). Table 1 summarizes the province’s updated fiscal forecasts.
• Higher investments in health care and affordability measures have lifted near‑term expenditures, while the government continues to project a moderate spending trajectory over the medium term.
• Resilient economic fundamentals remain supportive of revenue growth, albeit at a softer pace than previously anticipated. Real GDP is expected to have risen by 2.2% in 2025 and is projected to grow by 1.6% in 2026, underpinned by capital investment, a firm labour market, and ongoing population gains.
• The revenue mix continues to appear less dependent on the energy sector. Expected weakness in oil and gas is largely offset by strength in potash and uranium, limiting its impact on the fiscal outlook. Recent geopolitical developments have increased energy‑market volatility, with upside oil‑price risks offering a potential buffer.
• The net debt‑to‑GDP ratio is on a modest upward path, peaking at 16.7% in FY2029, compared with a previously estimated peak of 15.0% in FY2028, yet remaining well below that of all provinces except Alberta. 
• Although near‑term spending growth is now outpacing revenue growth, reopening the fiscal shortfall, Saskatchewan continues to stand out, supported by a steady, well‑anchored revenue outlook and relatively contained spending pressures.