Saying it is a pandemic deficit and not a structural deficit, the province’s finance minister is revealing the cost of COVID19 to Saskatchewan’s chequebook.
Donna Harpauer is providing a range of preliminary revenue impacts using three different scenarios related to the effects COVID19 has had on Saskatchewan. It shows the potential revenue decline in 2020-21 ranges from $1.3 billion to $3.3 billion depending on how long the economic restrictions we are under continue.
“We are less than three weeks into the new fiscal year and right now we just don’t know how long restrictions will remain in place in Saskatchewan, in Canada and around the world,” Harpauer said. “That’s why it is still incredibly difficult to forecast with any certainty. We believe however it is important that we release these different scenarios, to let Saskatchewan people know just how much of an impact the pandemic is having on our economy and revenues.”
The potential revenue declines are based on three economic scenarios. Each scenario includes assumptions on a number of economic factors, including the duration of current economic restrictions, how soon resource prices may recover and anticipated consumer behaviour once restrictions are lifted.
It has some wondering just what the government will do as it works to get back to balance. Harpauer is reluctant to do anything when it comes to cuts or taxes.
“I don’t think it’s helpful for Saskatchewan residents to just start cutting and slashing to try to bring it to a balance in one year,” Harpauer said during the government’s daily briefing on Friday.
Harpauer says there is strong management of the province’s finances to provide a solid fiscal foundation from which to manage the pressure we are facing now and the recovery we will ultimately have and that Saskatchewan will manage through this because we have the strength, foundation and the people to do it.
