2024-25 Mid-Year Report: Saskatchewan Economic Overview

The 2024-25 Mid-Year Report shows that the Saskatchewan economy remains strong; while the economy continues to maintain its strength, as evidenced by its status as the second-fastest-growing economy in Canada in 2023, challenges in agriculture have significantly impacted the financial outlook. Unstable weather during the growing season has negatively affected crop production and the province's financial status at the mid-year mark.

Initially, weather conditions were favourable. However, significant dry spells in many regions during the summer had a detrimental impact on yields. This resulted in a $385 million increase, or 25.1%, in the agriculture expense category compared to the figures outlined in the 2024-25 budget.

Mid-Year Financial Projections

The report anticipates a deficit of $743.5 million, reflecting an increase of $470.4 million from the initial budget forecasts. Overall, expenses are expected to rise by $745.5 million, indicating a 3.7% increase from the budget.

In addition to the impact of adverse weather on crop production, expenses related to the Protection of Persons and Property category rose by $128 million. Furthermore, the Health expense category increased by $100 million to account for service and volume pressures.

Economic Indicators

On a more positive note, total revenue is projected to grow by $275.1 million, or 1.4%, compared to budget estimates. The most significant growth is anticipated within the Other Own-Source and Taxation revenue categories. Other Own-Source revenue is expected to rise by $235.5 million due to better performance in this sector, including investment and insurance income increases. The Taxation revenue category is also projected to increase by $133 million, primarily due to an uptick in corporate income taxes stemming from unexpectedly high tax assessments in 2023 supported by a strong provincial economy.

Economic Forecasts

As of mid-year, Saskatchewan's gross debt is estimated at $35.2 billion, reflecting an increase of $388.5 million from budget expectations. However, it represents a slight decrease of $12.3 million since the first quarter.

Despite changes in debt levels, the province's net debt-to-GDP ratio is expected to be 13.9% by the end of the 2024-25 fiscal year, showing improvement over the budget projection of 14%.

Conclusion: A Stable Economic Performance

Overall, at mid-year, the Saskatchewan economy remains stable. Both population and employment indicators continue to show significant growth, and the province experienced the second-highest economic growth rate in Canada in 2023, with an actual GDP increase of 2.3%.