The Sask Party tabled its 19th budget, built on the assumption that the provincial government needs to protect its province and its people during a period of global political and economic stability.
Faced with softer commodity prices, global volatility and pressures on health care, education and affordability, the budget puts a premium on maintaining core services and veers away from any bold or ambitious policy direction.
It leans on cautious revenue forecasts, targeted tax relief and sustained spending on core services to signal that Saskatchewan can absorb external shocks without abandoning fiscal discipline.
In their first 18 budgets, the Sask Party focused on fiscal prudence, and this economic blueprint is no exception. This direction is especially important at a time when voters are looking for stability and predictability from all levels of government.
Key fiscal metrics:
- WTI oil forecast: $59.75 per barrel
- Light-heavy Oil Differential: $17.70 per barrel
- Real GDP growth forecast: 1.6 per cent in 2026, two per cent in 2027
- Deficit: $819.4 million
- Expense growth rate: 5.7 per cent
- Net debt-to-GDP ratio: 16.1 per cent
- General Contingency Allocation: $250 million
This fiscal plan depends on steady oil prices and restrained spending growth beyond this year’s jump.
The durability of the outlook hinges largely on commodity price stability, given its reliance on oil prices. A sustained drop below the $60 WTI assumption would quickly widen the structural deficit gap. According to the government’s projections, resource revenues are expected to stabilize rather than surge.
Revenue Assumptions: Conservative or Confident?
Total revenue is projected at just under $21 billion, including:
- Non-renewable resource revenue: $2.6 billion, down 4.9 per cent
- Personal income tax: $3.4 billion, up 1.5 per cent
- Corporate income tax: $1.7 billion, down .5 per cent
- Federal transfers: $4 billion, up 5.9 per cent
The fiscal plan is based on very conservative assumptions, with major revenue forecast numbers being flat or down from the previous budget year, reflecting the volatility of the global economy.
The budget forecasts WTI at of $59.75 per barrel. By comparison, Alberta’s budget WTI forecast was $60.50, and today WTI is $98.71 because of upward pressure due to the conflict in Iran.
The Saskatchewan government is also using its fiscal capacity to protect services. At 16.1 per cent, Saskatchewan has the second lowest debt to GDP rate in Canada, with only Alberta at 10.3 per cent being lower and significantly lower than the federal government’s debt to GDP rate of 47.1 per cent.
The fiscal outlook remains closely tied to commodity price assumptions, particularly oil and potash. While the government is maintaining cautious revenue projections, volatility in global markets and geopolitical uncertainty will continue to shape Saskatchewan’s fiscal trajectory over the medium term.
Core Services Protected in 2026 Budget
Despite a challenging economic outlook, the budget remains true to theme: “Protecting Saskatchewan”. Overall spending is $22.2 billion, an increase of 5.7 per cent over the 2025-26 with the highest expenditures in core government programs, including:
- Health care: $8.4 billion
- Education (K-12 and Post Secondary): $4.6 billion
- Social Services and Assistance $1.9 billion
The budget also outlines several affordability measures including $200 million in individual tax savings:
- $194 million for the Saskatchewan Low-Income Tax Credit
- $54 million for the Disability Tax Credit
- $12 million for the Caregivers Tax Credit
- $8 million for the Active Families Benefit
- $3 million for the Fertility Treatment Tax Credit
Budget 2026–27 also reinforces the government’s central fiscal narrative, which is protecting core services while managing economic uncertainty. However, the fiscal plan does not materially alter Saskatchewan’s structural deficit trajectory. Instead, the government is prioritizing incremental adjustments and near-term stability over deeper fiscal reform, signalling that more difficult spending and revenue decisions may be deferred beyond the next election scheduled for 2028.
Energy and Utility Pressures: SaskPower and Affordability Dynamics
As a backdrop to the budget, recently, SaskPower proposed system-wide rate increases of approximately 3.9 per cent in both 2026 and 2027, citing the need for significant capital investment to meet rising demand, modernize aging infrastructure, and manage escalating operating and fuel costs.
These proposed increases have already begun to cascade through the broader municipal and regulatory environment. For example, the City of Saskatoon approved matching rate adjustments to maintain alignment with SaskPower’s pricing structure, underscoring how provincial utility decisions directly influence local affordability pressures and municipal service costs.
Government messaging continues to frame rate increases as necessary to ensure grid stability, economic competitiveness, and energy security in a period of rising electricity demand and structural transition within the provincial power system. This dynamic illustrates the broader fiscal challenge facing Saskatchewan: balancing infrastructure modernization and decarbonization requirements with targeted affordability measures, particularly in rural and resource-dependent communities.
Spending Priorities: Health, Education, and Infrastructure
Health care remains the Sask Party government’s central spending priority, with record health funding of approximately $8.5 billion directed toward reducing surgical wait times, expanding access to primary care, and strengthening long-term and community-based capacity. Continued implementation of system modernization initiatives, workforce recruitment strategies, and infrastructure expansion aim to stabilize service delivery.
Education funding includes approximately $2.5 billion in operating support for K-12 education, reflecting enrollment growth pressures, teacher compensation considerations, and the need for enhanced classroom supports. The province continues to emphasize targeted investment in post-secondary programming aligned with labour market demand, particularly in trades, health professions, and other high-growth sectors, positioning workforce development as an economic competitiveness priority.
Infrastructure investment has also remained as a major policy pillar. The capital plan prioritizes health facilities, school construction and renewal, transportation corridors, and municipal infrastructure projects. These investments are intended to support economic competitiveness while addressing population growth pressures and regional development needs.
Increased Support for Volunteer First Responders
Budget 2026 doubles the tax credit for volunteer firefighters, search and rescue volunteers and volunteer emergency medical first responders. The 2026-27 Budget announces that the tax credit amount will be doubled from $3,000 to $6,000. The increase will result in personal income tax savings of $1.3 million for volunteer first responders annually.
Intergovernmental Dynamics: Federal Policy, Trade Risk and External Pressures
While not overtly confrontational, Budget 2026–27 reflects Sask’s continued sensitivity to federal policy decisions and broader external economic pressures. Intergovernmental dynamics are framed less through jurisdictional conflict and more through economic risk, including trade uncertainty, regulatory changes, and shifts in national immigration policy.
Federal decisions related to carbon pricing, agricultural programming, and immigration levels continue to shape the province’s fiscal assumptions, labour market outlook, and infrastructure demand projections. As an export-oriented economy, the province remains particularly exposed to global trade conditions and federal trade policy positioning.
Recent developments in agricultural trade underscore both the opportunities and vulnerabilities inherent in this exposure. A new agreement with China to reduce tariffs on canola seed and temporarily eliminate tariffs on canola meal and peas provides near-term relief for producers and supports export recovery following last year’s trade disruptions. However, the sector remains sensitive to shifting geopolitical dynamics, ongoing export competition, and broader trade policy uncertainty.
Together, these factors highlight the increasingly interconnected nature of fiscal policy across orders of government. Saskatchewan’s economic performance is shaped not only by provincial policy choices, but by national regulatory frameworks, federal trade strategy, and evolving international market conditions.
What Saskatchewan Businesses and Residents Should Watch
- Commodity price sensitivity: Saskatchewan’s fiscal outlook remains closely tied to oil, potash, and uranium markets. Continued volatility in global commodity prices could materially affect revenue projections and the province’s path to fiscal stabilization.
- Health system capacity and reform: Record health spending signals continued efforts to expand access to care, reduce wait times, and address workforce shortages. The scale of investment also suggests ongoing structural reform and procurement activity across the health system.
- Affordability pressures beyond tax policy: While tax relief measures are prominent, underlying affordability challenges, particularly related to housing, utilities, and service access, are likely to remain a key policy issue. Cost-of-living dynamics are likely to increasingly influence labour mobility, workforce participation, and economic competitiveness.
- Capital plan delivery risk: Significant multi-year infrastructure commitments will test the government’s capacity to deliver major projects in a high-cost construction environment, particularly as population growth increases service demand.
- Debt and fiscal sustainability: With deficits projected in the near term, rising debt servicing costs will place pressure on program spending and fiscal flexibility beyond 2026–27.
Budget 2026–27 is positioned as a stabilizing fiscal plan that seeks to balance economic uncertainty with continued investment in core public services. Its success will depend on revenue performance, execution discipline, and the government’s ability to transition from deficit management toward longer-term fiscal sustainability.
Counsel Public Affairs works with organizations to assess political risk, align messaging with government priorities, and navigate periods of policy uncertainty. If Saskatchewan’s Budget 2026–27 affects your files, we can help you recalibrate and identify strategic next steps.