2021 pandemic budget forecasts deficit of $2.6 billion

The 2021-22 provincial budget is reporting a deficit of $2.6 billion, with a return to balance not expected until 2026-27.

That is the main news from the budget tabled by Deputy Premier and Finance Minister Donna Harpauer.

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The budget’s focus, she said in an embargoed news conference Tuesday morning, is on protecting the “health and public safety of Saskatchewan people and the province's economy in the fight against COVID-19,” while making “record investments in health care, education, social services, and the protection of people and property.”

This budget “will protect Saskatchewan people through the pandemic, as more vaccines are delivered and life begins to return to normal," Harpauer said in speaking to reporters in an embargoed news conference Tuesday. "This budget will build Saskatchewan by investing in new long-term care facilities, hospitals, schools, highways and vital municipal infrastructure. And as our province and our economy emerges from the pandemic, this budget will grow Saskatchewan through incentives and key investments, while keeping life affordable for families."

The government is also not going to be able to keep its campaign pledge to balance the books by 2025. The province is projecting smaller deficits of $1.7 billion in 2022-23, $1.2 billion in 2023-24, and $770 million in 2024-25, with the return to balance expected in 2026-27.

Revenue is forecast at $14.5 billion in 2021-22, with most revenue categories forecast to increase compared to 2020-21. Expenses of $17.1 billion are projected, which is an increase of $1 billion compared to last year's budget.

The total public debt, including Crown corporation debt, is projected at $27.8 billion at March 31, 2022, which will be up $4.2 billion.

The province’s GDP is forecast to grow 3.4 per cent in 2021, on the heels of a projected 4.2 per cent contraction in 2020.

Harpauer called the pandemic the largest economic shock to the provincial, Canadian and world economies since has experienced since the Second World War.

Harpauer described the COVID-19 pandemic as "a once in a lifetime challenge that requires a significant response," she said.

"As a result, this year's deficit will be larger and it will take longer to return to balance than we had anticipated. Because we are going to make the investments needed to protect Saskatchewan people through the end of the pandemic and to drive a strong economic recovery as we emerge from the pandemic.”

Harpauer also said now was not the time for spending cuts or large tax increases that would “jeopardize our COVID-19 response” or the strong recovery.

There are only a few tax changes coming in. Those include taxation of vapour products: a Vapour Products Tax at a rate of 20 per cent on the retail price of all vapour liquids, products and devices takes effect Sept. 1, 2021. As well, heat-not-burn tobacco products will be taxed at approximately 75 per cent of the tax rate on tobacco cigarettes, effective June 1, 2021.

As well, an annual road use fee of $150 is being imposed on passenger electric vehicles at the time of registration in Saskatchewan, which will go towards road maintenance and replacement.

While the return to balance will take longer, Harpauer said the budget otherwise keeps every promise that was made in the 2020 election.

Highlights of what is included in the budget are as follows:

The province is making a multi-year commitment coming to $4.8 billion in the fight against COVID-19. It includes $1.5 billion this year, coming on the heels of a $2 billion investment last year. Another $1.3 billion in support has been put in place for the next two years.

The health budget is set at $6.54 billion - up $359 million or 5.8 per cent from last year, and is aimed at strengthening the provincial health care system. It includes a $90 million increase to support Saskatchewan's COVID response which includes the mass vaccination rollout; purchase of more personal protective equipment; supporting contact tracing measures; expansion of testing and assessment sites; additional provincial lab capacity; support for long-term care; and coverage of added physician costs.

The Saskatchewan Health Authority will get a $3.96 billion grant, up more than $221 million compared to last year. A record $458 million is going to mental health and addictions programs and services, up $23.4 million from last year.

$7.2 million is going to targeted mental health and addictions services including specific youth-focused initiatives, investments in suicide prevention, and expansion of harm reduction and addictions treatment.

Another $6 million is being committed to hiring of approximately 100 continuing care aides to help long-term care clients with personal care, meals and medication. This is the first of a three-year, $18.4 million campaign commitment to hire 300 continuing care aides to work in long-term care and in existing and expanded home-care services in rural and remote areas.

Harpauer said the province is also living up to a $6 million campaign commitment to expand the Autism Spectrum Disorder program to provide individualized funding for children ages six to 11. And the budget includes a $5 million increase to expand eligibility under the Saskatchewan Insulin Pump Program, which will cover the cost of an insulin pump for anyone in Saskatchewan. The funding also covers continuous glucose monitoring for children and youth under age 18 which was another campaign promise.

Also committed is a $6.7 million increase to reduce ambulance fees for seniors to $135 per trip, down from $275, which was another election pledge. An additional $1.4 million is going to the addition of a new STARS helicopter to deliver emergency care to rural and remote areas.

Education spending across government is $3.75 billion in the 2021-22 Budget, up more than $391 million or 11.6 per cent.

The 27 school divisions will receive $1.96 billion in operating funding for the 2021-22 school year, for a $19.2 million increase. This includes a two per cent salary increase in the teachers' collective bargaining agreement.

There is an increase of $2 million in child care funding, bringing funding up to $75.5 million to create 176 additional licensed home-based spaces and 51 new licensed centre spaces.

A total of $735 million will go to the post-secondary sector in 2021-22 and includes an additional $60 million over the next two years for COVID recovery, revenue generation, and achieving priorities in the Growth Plan.

The budget includes $678.5 million for post-secondary institutions, up 4.4 per cent compared to the previous year, as well as $39.8 million for student supports, a 10 per cent increase. This includes an increase in the Saskatchewan Advantage Scholarship from $500 to $750 annually per student to help with tuition costs, fulfilling another campaign pledge.

The social services budget is $1.56 billion, up more than $66 million to last year.

Benefits to seniors go up, fulfilling another election promise, with $3.5 million in additional funding for the Seniors Income Plan, with maximum payments increasing by $30 a month effective July 1.

Also fulfilling a campaign pledge is $246,000 to enhance communication services provided by the Canadian National Institute for the Blind and Saskatchewan Deaf and Hard of Hearing Services. $6.7 million is going to community based organizations including $4.2 million increase for people working with those with intellectual disabilities.

For protective services, over $845 million has been allocated for an increase of $38.6 million. This includes $92.4 million for the Saskatchewan Public Safety Agency.

On the justice side, nearly $4.3 million in funding goes to pandemic-related measures in Saskatchewan's courts and correctional facilities. This includes personal protective equipment, cleaning services and other measures.

Included in the budget is a strong capital plan to stimulate the economy. Harpauer said $3.1 billion in planned capital spending has been included in the budget, including $162 million in health care capital. This includes $7.6 million for the La Ronge long-term care facility and $3.6 million for an upcoming facility in Grenfell.

Also in the budget is $5.7 million for Urgent Care Centres in Regina and Saskatoon, $1.4 million for Weyburn Hospital planning, and $1.4 million for ongoing work on program and design plans for Prince Albert Victoria Hospital.

Roads and highways are seeing an operating and maintenance investment of $830 million, up $115 million, or 16 per cent.

Projects include passing lane projects on Highways 2, 3, 12, 14 and 16, and three sets of passing lanes on Highway 7 - Kindersley to the Saskatchewan-Alberta border.

Nearly $190 million is going to education capital, up $22.3 million, and includes nearly $102 million to support 21 ongoing projects to build 16 new schools and renovate five more.

$24.3 million is provided in 2021-22 for major renovations to a number of high schools, including John Paul II Collegiate in North Battleford.

$65.4 million is going to elementary school projects one of which is the new K-12 school to replace Blaine Lake Composite School.

Over $324 million is going to government services infrastructure, including $52 million for construction of the remand centre at Saskatoon Correctional Centre.

The budget includes $70.1 million for maintenance and upgrades to dams and canals, and $18.9 million for phase one of the $4 billion Lake Diefenbaker Irrigation Expansion Project.

$39 million has been allocated in the budget towards workforce development.

The 2021-22 Budget also includes nearly $245 million for municipal infrastructure. Crown corporations are to spend $1.6 billion on major capital projects this year, including nearly $938 million by SaskPower to improve the electricity system.

The government says it is living up to its election commitment to provide all SaskPower customers with a 10 percent rebate on power bills, with nearly $175 million going towards that pledge.

Rebates are also coming in May on vehicle registrations from the Auto Fund, at about $285 per vehicle. With these combined rebates, Harpauer said Saskatchewan people this year will pay the lowest total utility rates in Canada.

More than $16.5 million is allocated to capital improvements at provincial parks, and that includes new campground service centres for the Battlefords Provincial Park.

The budget also includes the reinstatement of the Community Rink Affordability Grant, providing $2,500 per ice surface — again a campaign commitment.

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