National Bank Says Saskatchewan's 2026 Budget Uses "Modest" Deficits to Protect The Province's Economy

06:42 AM EDT, 03/19/2026 (MT Newswires) -- Saskatchewan's plan for a balanced budget in 2025-26 didn't come to fruition as the province now expects to register a $1.2 billion deficit, or 1.0% of gross domestic product, in the outgoing fiscal year, said National Bank of Canada.

In 2026-27, Saskatchewan is set to run a shortfall again, though it's expected to be smaller at $819 million, 0.7% of GDP. Important to note is that very cautious commodity price assumptions -- for example, oil at less than US$60/barrel -- create immediate budgetary upside given the recent run-up in oil prices, stated the bank.

Like other Canadian provinces, Saskatchewan will make record investments in healthcare and pencil in one of the largest capital plans in provincial history, noted National Bank.

At the same time, tax regimes will remain favorable as Budget 2026 provides nearly $200 million in aggregate savings on this front, while reductions to the civil service are also planned.

Over the course of the five-year fiscal plan, budget deficits will steadily moderate and by 2030-31, the province expects to be running a surplus again, pointed out the bank.

Consistent with ongoing shortfalls and a large capital plan, Saskatchewan's net debt will be on an upward trajectory in the coming years, added National Bank. The province's debt burden is set to rise from 15.2% of GDP in 2025-26 to 16.1% in 2026-27 before peaking at 16.7% of GDP in 2028-29.

Financing charges are also on the rise and will consume a greater share of revenue in 2026-27 (5.7% versus 5.1% in 2025-26). Still, the province's debt burden and interest bite are low compared with the weighted provincial average.

Consistent with a rising debt burden, Saskatchewan's bond stock is set to grow over the budgetary horizon, though gross term issuance will take a slight step down in the upcoming fiscal year ($4.8 billion from $5.3 billion in 2025-26). Still, the province is an increasingly active issuer and the roughly $5 billion annual program is a decisive step up from levels seen just a couple of years ago, according to the bank.

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