No one knows how long restrictions related to COVID-19 will last, but the provincial government is trying to predict how this period will impact finances.
According to details released this afternoon, Saskatchewan’s revenue decline could range from $1.3 to $3.3 billion.
The exact number depends on the duration of pandemic-related economic restrictions.
The Government of Saskatchewan provided these numbers, based on three different scenarios.
“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,” Finance Minister Donna Harpauer said in a press release. “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.”
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.
Real GDP scenarios for 2020 are all negative and range from a decline of 4.1 per cent under the most optimistic scenario to a decline of 14.9 per cent in the most pessimistic scenario.
Thus far, the government continues to manage spending within the amounts allocated in the budget estimates released on March 18.
“The 2020-21 deficit is not a structural deficit,” Harpauer said. “It is a pandemic deficit. Saskatchewan will manage through this, because we have the strength, the foundation and the people to do it.”
