Saskatchewan Budget 2025-26: Back in the Black

3 Key Takeaways:  

• Budget 2025/26 squeezes a surplus of $12.2 million 

• No tariff measures or contingencies being introduced  

• Investments are focused on infrastructure needed for a growing province 

Following the Saskatchewan Party’s re-election in October 2024, Minister of Finance Jim Reiter delivered his first budget earlier today.  

Budget 2025-26, titled Delivering For You included a small surplus of $12.2 million – putting the government’s finances back in the black. With the headwinds and challenges facing the province from the threat of tariffs south of the border, and increasing affordability concerns at home, the budget attempts to strike a balance between maintaining fiscal stability and delivering support for Saskatchewan residents. However, with the threat of tariffs looming, particularly in key export sectors such as agriculture, steel, and energy, questions remain about the province’s economic resilience.  

“…. We’ve been cautious on expenditures in today’s budget and prudent on revenues to put us in the best possible financial position to weather the impacts of tariffs. In developing this budget, we did not allow the threat of tariffs to back us away from any of our election commitments on affordability and safer communities. Our commitment to deliver change by addressing the challenges of growth, like crowded classrooms and access to health care.” – Hon Jim Reiter, Minister of Finance  

The Fiscal Fundamentals 

• Revenue: The total revenue for 2025-26 is projected at $21.056 billion, an increase from the 2024-25 forecast of $20.408 billion. This growth is attributed to higher taxation revenues and federal transfers. 

• Expenditures: Total expenses are estimated at $21.044 billion, slightly down from the 2024-25 forecast of $21.069 billion. Key allocations include: 

• Debt: The province’s total debt is projected to rise to $38.332 billion by March 31, 2026, up from $34.813 billion in 2025. Taxpayer-supported debt is expected to be $23.459 billion, while self-supporting debt is anticipated at $14.873 billion. 

• Deficit/Surplus: The budget forecasts a modest operating surplus of $12.2 million for 2025-26, marking a positive shift from the previous year’s deficit of $660.6 million. 

• WTI Oil Price Assumptions: For 2025-26, the WTI oil price is forecast to average US$71.00 per barrel, down from US$77.00 in the 2024-25 Budget. 

Healthcare 

• Allocates $8.07 billion – an increase of $484 million from the previous year. The health increase aims to enhance patient access to acute and emergency care, expand team-based primary care and improve continuing care services in all regions of the province.  

• Funding is also being dedicated to support the recruitment and retention of health care professionals, addressing ongoing workforce shortages. 

• $623.8 million to support mental health and addictions services – a $52.8 million, or 9.2 per cent, increase from 2024-25.  

Affordability Relief 

• Several broad-based income tax reductions for all residents, families and businesses in Saskatchewan, including raising the basic personal exemption, spousal and equivalent-to-spouse exemption, dependent child exemption and the seniors supplement by $500 a year, for the next four years – over and above the impact of indexation. According to the government, this is the largest personal income tax reduction in the province since 2008. 

• The budget includes affordability initiatives that were introduced in The Saskatchewan Affordability Act in December 2024 

• Includes Education Property Tax mill rates reductions for all property tax classifications 

• Introduces and maintains ‘made-in-Saskatchewan’ tax credits, incentives and programs to encourage investment and diversify the provincial economy.  

Education 

• The budget allocates $3.5 billion towards education; an increase of $183.5 million over last year: 
• $130 million is going towards the new teacher collective agreement to address the pressure of increased student enrollment and assist the complex classroom dynamic. 
• $191.3 million in capital funding for the construction of more schools.  

Potential Impact of Tariffs on Saskatchewan’s Economy 

Tariffs threaten to decrease the competitiveness of Saskatchewan products, potentially leading to reduced investment and economic contraction. The Saskatchewan Chamber of Commerce is anticipating a 2.6% annual decline in Canada’s real GDP, equating to a loss of $1,900 per person, if a 25% tariff is imposed on trade.  

Despite these external pressures, the provincial government has not allocated contingency funds in the current budget to address potential tariff impacts, raising concerns about the sustainability of its affordability measures and the overall economic resilience of Saskatchewan.  

Analysis/Commentary:  

The 2025-26 Saskatchewan budget, unveiled amid escalating global trade tensions, underscores the province’s commitment to affordability and fiscal prudence. The budget introduces over $250 million in tax savings through several affordability measures. However, the imposition of 25% tariffs by the US on Canadian goods and China’s announcement of 100% tariffs on key Saskatchewan exports, such as canola oil and peas, present significant challenges to the province’s economic stability. Looking ahead, depending on the length and impact of the tariffs on exposed sectors, the province may need to administer relief funding – similar to those programs launched in response to the economic impacts of the COVID-19 pandemic. Undoubtedly, such relief programs could put the province’s finances back in the red.  

While the 2025-26 Saskatchewan budget endeavors to support residents through tax reductions and investments in essential services, the looming threat of tariffs poses a substantial risk to the province’s economic health. The absence of contingency planning for these trade disruptions may undermine the efficacy of the budget’s affordability measures and may necessitate a reassessment of its fiscal strategies to safeguard Saskatchewan’s economic future. 

To learn more about what this means for your sector, business, or association, please reach out directly to the Counsel Public Affairs Saskatchewan team: