The Government of Saskatchewan gave its mid-year financial update this morning and say drought and the pandemic impacted the province’s bottom line.

Deputy Premier and Finance Minister Donna Harpauer said. ” Absent the drought, we would have seen a significant improvement from budget and a much lower deficit, based on stronger revenue across all major categories.”

The government says a deficit of $2.7 billion is forecast which is up $97 million from the budget forecast.  However, provincial number crunchers are quick to point out it is a $29 million improvement from first quarter.

Total expense is forecast to be up $2.5 billion (14.6 per cent) from budget, due to $1.8 billion for Crop Insurance claims.

Health expense is forecast to be up $250.0 million from budget due to pandemic and drug plan pressures.

Revenue is forecast to increase from budget by $2.4 billion (16.5 per cent), with significant increases across all categories including $668.8 million in non-renewable resource revenue due to higher potash and oil prices.

Tax revenue is up $616.7 million from budget, reflecting higher Personal Income Tax and Corporate Income Tax due to higher 2020 assessments, as well as increased Provincial Sales Tax.

Federal transfers are up $542.6 million from budget with the bulk of that funding going to drought, pandemic, child care and municipal infrastructure.

The province’s real GDP is forecast to grow by 3.6 per cent in 2021, an improvement from the budget forecast of 3.4 per cent. In 2020 the real GDP declined 4.9 per cent.