Saskatchewan is forecasting a $349 million deficit for 2025-26 in its first quarter financial report, a sharp reversal from the $12 million surplus projected in the spring budget.
The province now expects revenue of $20.9 billion and spending of $21.2 billion. Finance Minister Jim Reiter said the update reflects both global economic uncertainty and the government’s focus on core services.
“Today’s update underscores government’s commitment to keeping our communities safe and continuing to spend on healthcare, education, and other essential services,” Reiter said. “While economic uncertainty is creating financial challenges both nationally and globally, Saskatchewan’s financial position remains stable.”
Revenue is forecast to be $172 million lower than the budget, driven largely by a $163 million drop in SaskPower’s net income following the removal of the federal carbon tax from customer bills. Non-renewable resource revenue is also expected to fall by $30 million due to weaker oil prices and a stronger Canadian dollar.
Spending, meanwhile, is forecast to be $189 million higher than the budget. The largest pressure comes from wildfire costs, with an $80-million increase tied to firefighting and evacuations. Reiter said the spending will be formalized in a special warrant to be released on August 25.
“Government remains committed to ensuring the necessary resources are available to combat Saskatchewan’s ongoing and devastating wildfire season,” he 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.”
The province is also facing a $115 million increase in pension expenses due to year end actuarial adjustments.
Despite the deficit, the government pointed to strength in the broader economy, citing strong housing construction, retail sales, and job growth in the first half of the year. Saskatchewan continues to hold the highest credit rating among provinces when all three major agencies are considered.
The province’s net debt-to-GDP ratio is projected at 14.5% by March 2026 — an improvement over budget and the second-lowest among provinces.