• Saskatchewan intends to maintain a small $12 million surplus in 2025-26 after a deeper than expected deficit of $660 million 2024-25.
  • No contingency fund was included in the plan to account for uncertainty related to the duration and impact of tariffs.
  • Government moved forward with tax cuts, costing $250 million in forgone revenue in fiscal 2025-26.
  • The roll off of one-time costs (like crop insurance claims) will allow expenditures to settle below their 2024-25 level (-0.1%) without large cuts to program spending.
  • Saskatchewan maintains the second lowest net debt-to-gross domestic product ratio among Canadian provinces despite plans for a slight increase over the fiscal plan.

Saskatchewan’s 2025 Budget forecasts a modest $12 million surplus, reflecting solid revenue growth and a slight dip in expenditures due to the roll off of one-time expenses. This is expected to put its books back in the black after recording a deeper than expected $661 million deficit in 2024-25.

Surpluses are expected to be modest at first—$12 million in fiscal 2025-26—and gradually grow to $217 million by the end of the fiscal plan.

Saskatchewan has opted not to include a contingency fund in its budget despite the risk of trade-related disruptions. Modest surpluses and continued revenue growth, however, provide some flexibility to manage unforeseen spending needs.

Revenue growth driven by resource royalties

The government delivered on its election promise of tax relief by lowering the basic personal, spousal, dependent child, and seniors supplement by $500 per year over the next four years. These efforts are set out in the Saskatchewan Affordability Act, which is estimated to cost $250 million in forgone revenue this year. The changes come alongside other affordability and growth-enhancing measures, including increasing the disability tax credit by 25% and maintaining the small business tax rate at 1% permanently.

Even with numerous tax cuts, revenues are expected to grow $648 million (3.2%) in fiscal 2025-26. A significant portion f this growth—nearly one third—is set to come from non-renewable resource revenues ($197 million), particularly uranium. Significant growth in this revenue stream reflects improved profitability, increased sales volumes, and continued weakening of the Canadian dollar against the U.S. dollar, which should bode well for exports.

We’ve argued before that resource royalty volatility remains a key source of uncertainty for revenues—something that will be heightened amid trade tensions, which impact exports as well as the exchange rate. It’s worth noting that our nominal GDP forecast is slightly less optimistic than assumptions underpinning this budget, posing further downside risk to revenue projections.

One-time costs roll off the ledger in 2025-26

Expenditures are expected to decrease $25 million (-0.1%) in fiscal 2025-26, largely due to the roll-off of crop insurance claims from earlier droughts, which resulted in a higher-than-anticipated claims. This is expected to reduce agricultural expenses by $174 million in 2025-26.

This isn’t the only expense category that will lighten in the upcoming fiscal year. The settlement of the teachers’ collective bargaining agreement also added to one-time cost adjustments in 2024-25 due to retroactive salary adjustments.

Health expenses also exceeded the budget allocation by $382 million in 2024-25 due to increased service demand. This, however, is expected to stabilize moving forward as population growth slows.

Meanwhile, Saskatchewan anticipates higher financing charges. These are expected to grow by $110 million in fiscal 2025-26, reflecting the slightly heavier debt burden. This is the largest increase of any expense category.

Maintaining a strong fiscal stance

Saskatchewan’s net debt-to-GDP ratio is projected to rise modestly from 14.6% in 2025-26 to 15% in 2027-28 before returning to a downtrend. It continues to boast of one of the lowest debt burdens and highest credit ratings among Canadian provinces, a testament to its prudent financial management.

This strong fiscal position provides it with the flexibility to respond to emerging risks—including trade related—without needing to implement broad-based cuts to essential programs.

Rachel Battaglia is an economist at RBC. She is a member of the Macro and Regional Analysis Group, providing analysis for the provincial macroeconomic outlook and budget commentaries.

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