Scotiabank Says Saskatchewan Swings to FY26 Deficit on Higher Wildfire, Health Spending

09:42 AM EST, 11/26/2025 (MT Newswires) -- Saskatchewan released its mid-year economic and fiscal update on Tuesday, with a projected FY26 budget deficit of $427 million, or 0.4% of gross domestic product, compared with a $12 million surplus in the budget, said Scotiabank.

No new policy measures were announced.

Projected spending is up $521 million compared with the budget forecast. Higher-than-expected spending on wildfires and healthcare has led overall projected expenses higher, despite lower planned spending by the agriculture department related to crop insurance.

Overall, expenses are projected to be 2.2% higher than the previous fiscal year, noted the bank.

Projected revenues are up $81.6 million. Tax and resource royalties are lower, reflecting the downward revision to 2024 GDP and lower oil prices. Income from government enterprises is $192 million lower, driven by the removal of the carbon tax from provincial electricity bills.

Providing a partial offset is higher federal transfers, reflecting cost-sharing for the wildfire expenses. Overall, revenues are projected to be 1.4% higher year-over-year.

FY26 net debt as a share of GDP has increased to a projected 14.8%, from 14.6% at the time of the budget. This reflects the higher deficit for this year, in addition to the higher starting point due to the downward revision to 2024 nominal GDP.

Despite the projected increase, Saskatchewan's public debt burden remains substantially lower than most other provinces in Canada, stated Scotiabank.

The Saskatchewan economy has remained "resilient," according to the bank. Despite the tariffs and uncertainty, the Saskatchewan economy has continued to lead the country in many economic indicators, including a 2% increase in employment since the United States tariffs were announced.

Scotiabank expects Saskatchewan to continue to grow faster than the national average, which should support an improvement to the budget next year, as long as expense growth can continue to be limited.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.