Because of the reduction in revenue and additional costs from COVID-19, what was to be a balanced budget is now in the red. Finance Minister Donna Harpauer forecasts the deficit for this fiscal year to be $2.4-billion. Harpauer stresses prior to the pandemic, Saskatchewan was on track for balanced budgets last year and this year. She adds that while it is a significant number, it’s much smaller than what is expected in many other provinces. She gives the example of Manitoba possibly having a $5-billion dollar deficit and as high as $20-billion in Alberta.
Revenue is forecast to be $13.6-billion, down about 8 per cent from last year because of the pandemic and the oil price collapse. Spending is up by about 7 per cent, at $16.1-billion. Part of that is the spending on health care during the pandemic. To help stimulate Saskatchewan’s economy and create jobs, the province’s capital plan includes $3.1-billion to build hospitals, schools, roads and highways and municipal and Crown Corporation infrastructure.
This fiscal year’s budget contains no PST increase and the Finance Minister doesn’t believe it will be needed to deal with the deficit because of COVID-19. Harpauer says it will take a few years to get back to balance. There are no program changes or cuts in the budget either. The Minister explains the largest expenditure in dealing with the pandemic is on the Health Ministry side, but there are contingencies in the budget as well as some savings. She gives the example of all the surgeries that were delayed because of the pandemic response.
Harpauer feels Saskatchewan is better positioned than most to provide the needed support to help people get through the pandemic and see the economy recover and jobs return.
Health:
The provincial government is investing a record $5.8 billion in health care this year. That’s an increase of $255 million. $118 million has been committed specifically to the COVID-19 response on hospital equipment, testing equipment, personal protective equipment and operating costs. A $200 million contingency fund has been set up, if needed, to address any COVID-related costs that can’t be covered with the existing health budget.
$435 million is being made available for mental health and addictions supports and services. It’s the highest amount in history. This includes the establishment of a specialised crystal meth inpatient treatment centre in Estevan and increased access to mental health and addictions services through the province.
$20 million in additional funding will go to reduce surgical wait times. Nearly $1.8 million will enhance the provincial gynecological-oncology programs with additional resources including a sixth specialist position to stabilize the provincial program. Saskatchewan is also committing $1 million to Ovarian Cancer Canada for treatment, research, and clinical trials. The funds will remain in Saskatchewan.
Overall, the budget provides $3.7 billion to the Saskatchewan Health Authority which is an increase of $140.6 million from last year.
Rural Health:
The province says plans are on-going for the Weyburn General Hospital replacement project. Existing funding of $2.5 million will be directed to additional site selection, land purchases and other planning activities. A further investment of $15.7 million in capital funding will be provided in addition to last year’s capital commitment for the construction of a new 72-bed long-term care facility in Meadow Lake. More than $4 million is directed toward diagnostic imaging equipment, including funding toward a $2 million CT scanner for Melfort and area patients.
Mental Health and Addictions:
The provincial budget dedicates $435 million to mental health and addictions services. That includes development of an innovative crystal methamphetamine treatment program in Estevan. The centre will bring specialized training to Saskatchewan. It will include 15 beds for people recovering from crystal meth and five beds for other addiction treatment needs. There will also be four pre-treatment beds and six post-treatment beds. The centre will offer flexibility in lengths of stay beyond the traditional 28-day treatment model.
Rural and Remote Health Minister Warren Kaeding says, “Plans for enhancements are underway, and it’s also important to be aware many support services are currently available for individuals and families struggling with issues that feel more intensified by the COVID-19 pandemic.”
There is an overall increase in this budget of $33 million for mental health and addictions services. There is an increase of $1.6 million of Saskatchewan Hospital in North Battleford.
Health Capital Spending:
Victoria Hospital in Prince Albert will be one of the facilities benefiting from Government spending in this year’s budget. $172 million has been set aside for health care capital spending which includes $15 million this year for planning, design, and procurement activates for the more than $300 million project for a renewed and expanded Victoria Hospital. Plans for that facility include a multi-storey addition with a new acute-care tower, adult mental health space, and the development of culturally appropriate spaces in partnership with local First Nations.
Also in the budget is $15.7 million toward continued construction of a new 72-bed long-term senior’s care facility in Meadow Lake. $4 million has been set aside for diagnostic imaging equipment, including $2 million to fulfill a government commitment for a new CT scanner in Melfort.
Taxes:
The budget reintroduces full indexation of the Personal Income Tax system beginning with the 2021 tax year. The government says it will protect taxpayers from bracket creep, or automatic increases in tax caused by inflation. The province has also introduced a PST rebate for new residential home construction of up to 42 per cent of the PST paid on a new house contract up to $350 thousand, excluding the land, for new homes purchased after March 31st, 2020 and before April 1, 2023. And, the Oil Infrastructure Investment Program has been introduced to support new and expanded pipelines as well as new pipeline terminals to flow oil to markets.
Infrastructure:
The provincial budget has $3.1 billion for infrastructure in fiscal 2020-21. This is the first of a two-year $7.5 billion capital plan to invest in schools, hospitals, highways, Crown utility projects, municipal infrastructure, and other projects to stimulate the economy, and create jobs. The initial capital plan, announced in March, supports more than 17,500 jobs; it has an economic impact of $1.8 billion on nominal GDP. The two-year plan is expected to support 10,000 jobs with a $1.2 billion impact on the province’s nominal GDP.
Business:
To ensure growth of Saskatchewan’s export markets, the Ministry of Trade and Export Development is getting $4.2 million in the budget to establish three provincial trade and investment offices in Japan, India, and Singapore. The offices will focus on diversifying markets, connecting Saskatchewan businesses with investors and customers, and encouraging direct foreign investment.
The budget also introduces a new Saskatchewan Chemical Fertilizer Incentive, providing a 15 per cent tax credit to encourage new investment that will grow Saskatchewan’s value-added sector.
The budget extends the existing Manufacturing and Processing Exporter tax incentive for an additional three years. The tax credits provided under this incentive for new production and head office hiring helps to support efforts by eligible businesses to expand their production and export capacity.
$5 million for this fiscal year is being provided to identify opportunities for irrigated agriculture and further develop land and water resources.
Municipalities:
This year’s budget provides a record $278 million in Municipal revenue sharing. That’s up nearly $27 million from last year. The government says that, in total, the budget invests more than $571million in direct provincial support to municipalities. This includes revenue sharing and the $150 million Municipal Economic Enhancement Program, additional infrastructure funding, and a number of grants and initiatives from various government ministries.
The province is taking credit for securing $900 million in federal funding to support local priorities. This is coming from the Investing in Canada Infrastructure Program.
An increase of $14 million is designed to help fund the operations of community service organizations that provide services to families and assisting those who are most vulnerable; considered particularly important as the province respond to the COVID-19 pandemic.
Additional highlights according to the govenrment include: $35.3 million for urban and rural road projects, $18.78 million for policing grants, $11.22 million for provincial libraries, $8.98 million for grants in lieu of taxes to municiplities and libraries, and $3.79 million for the Transit Assistance for People with Disabilities Program.
Education K-12:
Saskatoon schools will be benefiting from the provincial budget announced today [mon]. The investment in K-12 capital includes more than $37 million in economic stimulus funding. Among the projects in the province to benefit are a new St. Francis Elementary School in Saskatoon, and the consolidation of Princess Alexandra, King George, and Pleasant Hill Elementary schools in the city. There will also be a new consolidated elementary and high school in Carrot River, a new joint-use school in Regina, and a consolidation of three schools in that city.
The official opposition has been asking what funds would be made available to school divisions in response to any expenses for dealing with safety protocols as schools begin again in the fall, but nothing specific has been added to the budget.
Finance Minister Donna Harpauer says every Ministry has contingency funds built in to their budgets, including the Ministry of Education.
“Should there be a solid, defendable of why classrooms need more funding, particularly COVID related, that is what the contingency funds would be there for.
Post-Secondary Education:
$749 million has been ear-marked in the provincial budget for expanding funding for the student loans program, and operating grant increases for universities, federated and affiliated colleges, technical institutes and regional colleges. Advanced Education Minister Tina Beaudry-Mellor says, “Our investment in post-secondary education is $20.9 million higher than last year.” $35 million dollars will go to student loans, scholarships, and grants. $694 million will be split between the universities, Sask Polytechnic, the Saskatchewan Indian Institute of Technologies, Gabriel Dumont Institute, and regional colleges.
Highways:
More than one thousand kilometres of provincial highways will be upgraded because of funding in this year’s provincial budget. That will include multiple sets of passing lanes, and various safety improvements. $715 million has been set aside for highways and infrastructure. The budget includes $411 million for capital projects, including $54 million added through stimulus funding.
Tech Sector:
Another boost for the Saskatoon lab that’s working on a vaccine for COVID-19. The provincial budget is putting $400 thousand into the facility. Innovation Saskatchewan will provide the funding for the Vaccine and Infectious Diseases Organization toward construction of a vaccine manufacturing facility. That facility will be the first of its kind in Canada.
Elsewhere in the tech sector, $1 million is being put into an agricultural technology program to drive investment into local early-state ag-tech innovations and attract international ag-tech companies to the province.
$125 thousand in additional funding is heading to Saskatoon-based tech business incubator Co.Labs. It’s to help expand programing and scale-up support for all technology start-ups. Since launching in 2017, Co.Labs has worked with 100 companies, attracted more than $8 million in private equity investment and created more than 170 jobs.
