With an eye to Saskatchewan's growing debt, expert sees 'stormy weather ahead'

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3 days ago

That the Saskatchewan government posted yet another deficit is of no surprise to economics professor Keith Willoughby, but he says a critical eye reveals some trouble brewing on the horizon.
On Monday, the government published its 2024-25 Public Accounts Volume 1, which details the province's finances and indicated a $249-million deficit, down from the $273 million-deficit projected in March.
Willoughby, Dean of the Edwards School of Business at the University of Saskatchewan, had three major take-aways after reading it: the deficit is to be expected, the province is doing well compared to other jurisdictions but the increasing net debt per capita and net debt to the province's growth domestic product (GDP) needs to be addressed.
'I believe that there is some stormy weather ahead to which the province needs to pay special attention,' he said in an interview Wednesday.
Net debt per capita is effectively a figure reached by taking the net debt carried by the province then dividing it by every single resident of the province. According the government's public accounts, each citizen is carrying a provincial debt burden of $12,500.
'If you look back a decade ago, it was about $7,000 per man, woman and child in the province,' said Willoughby. 'That speaks to some challenges that the province will need to address as we go forward.'
Net debt per capita peaked in 2022 at $13,100 per citizen but the statistic is now trending up again. Coupled with a year-over-year uptick in net debt to the province's GDP coming in at 13.7 per cent, he said there are some headwinds being faced.
Saskatchewan is still in a relatively good position compared to other provinces, with Manitoba's net debt to GDP forecast at 36.1 per cent in 2024 and Alberta's forecast at 7.6 per cent.
'How large do you want the debt to grow? Because if it gets unsustainable, in terms of the GDP or the people in the province, that puts the burden back on the taxpayers and citizens of this province,' he said.
In an emailed statement, the government touted its position as the province with the second-lowest net debt to GDP in Canada.
'The Government of Saskatchewan continues to make investments that deliver on what the people of Saskatchewan have said is important to them – affordability, health care, education, community safety and fiscal responsibility,' read the statement.
But not all debt is made equal.
Spending on infrastructure, health care, education, etc. are touched on in the accounts document but for Willoughby, citizens should take stock of how the government's spending is impacting them in their day-to-day lives.
'Are we getting access to better services? Are our health-care wait times dropping? Are the roads improved? Are we seeing access to better services in terms of teacher contracts?' he said.
When the province released its 2025-26 budget in March, a slim surplus of $12.2 was forecast.
Oil trading well below projections, wildfire expenses, suspensions of the provincial output based carbon pricing regime and increased drought pressure throughout the province are all making the likelihood of that surplus low, argued NDP finance critic Trent Wotherspoon.
According to the province, total revenues in 2024-25 were $20.9 billion, up $994 million from targets, in part due to $400 million from a national tobacco settlement. At the same time, expenses came in at $21.1 billion.
Wotherspoon said without the settlement the deficit would have been $600 million, adding the province 'squandered' the settlement.
'They overspent by a billion dollars, they failed to balance the budget and failed to properly address the real, big challenges that Saskatchewan people face,' he said at a media availability Wednesday.
Wotherspoon also took issue with the timing of the release of public accounts, which happened the day before the Canada Day holiday.
He likened it to the recent release of Crown earnings reports. Historically, they are released in a staggered manner over the course of an entire week with opportunities for technical briefings and interviews with media at the legislative building. This year, all the reports were simultaneously on June 23 in Saskatoon.
'They don't like accountability, they don't like scrutiny,' said Wotherspoon.
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