Insights - Saskatchewan Budget 2025: In the face of uncertainty

Setting the scene

Saskatchewan Finance Minister Jim Reiter presented his first budget as Minister on Wednesday, which showed Premier Scott Moe’s Saskatchewan Party government forecasting a surprise balanced budget in 2025-26, even as the threat of American and Chinese tariffs continue to haunt the halls of political power across Canada. While no contingencies for tariff impacts are included in the budget, balancing the books is a nice surprise for the Saskatchewan Party government that was re-elected to a smaller majority in October 2024. The budget follows through on several campaigns promises that Moe made in the fall, including tax reductions, investments for more police officers, and supporting small businesses. But the Premier and his team also took steps to do more on education and health care – weak spots that Moe admitted were a reason his party struggled in Saskatoon and Regina last fall. Health care will receive over $8 billion in funding, while education funding received a 5.5% increase compared to the 2024-25 fiscal year.

The decision to not include contingencies for tariffs south of the border will continue to be criticized by the Opposition NDP. But it is a decision that the Moe government appears willing to take at this point and made it clear that they will keep their campaign promises and do more to win back voters in Saskatchewan’s biggest cities until the next election – whether the tariffs end up making a significant impact or not.

Economic outlook

The 2025-26 budget document projects a thin surplus of $12 million for the province, on an estimated $21 billion of spending. This is in comparison with this current year’s fiscal budget ending March 31^st, which is estimated to record a $660 million deficit for the province. Total debt is expected to rise to $38.3 billion by spring 2026.

Total revenue is forecast to be $21.1 billion in 2025-26, an increase of $1.2 billion or 6.0% from the 2024-25 Budget. This is primarily driven by an anticipated increase in potash revenue and provincial sales tax revenue due to ongoing economic growth, increased population and strong construction activity.

After strong economic growth in 2023, when gross domestic product grew by 2.3%, Saskatchewan’s economy slowed slightly in 2024 as commodity prices reset to lower, more sustainable levels. Real GDP growth is forecast to be at 1.8% and 2% for 2025 and 2026, respectively. Over the medium term, real GDP growth is forecast to average 2.2% annually from 2026 to 2029, as outlined in the figure below.

While total revenues are expected to rise, expenses do so in a nearly equal manner. Total expenses are budgeted at $21.0 billion in 2025-26, an increase of $909 million or 4.5%, from the 2024-25 Budget. Notably. financing charges see a significant jump in 2025-26, with an expected cost of $1.1 billion, or 5% of total expenses. This represents an increase of $147 million or 16.1% from the 2024-25 Budget. The government explained the increase as being primarily driven by the need to finance ongoing capital projects and the impact of higher interest rates on the refinancing of maturing debt.

The budget itself does not include any contingency efforts in the event of the coming into force of the U.S. tariffs, with Minister Reiter commenting “The uncertainties will show why including any amount of contingency this time would not be realistic,” prior to presenting the budget in the Legislature. However, he did acknowledge that if tariffs do persist for an extended period of time, the province will undoubtedly be pushed into deficit.

The budget does however outline a worst-case scenario outlook should tariffs be applied broadly by the U.S. as well as taking into account the effect of Canadian countermeasures over a period of one year. In this scenario, the value of Saskatchewan exports to the U.S. could be reduced by $8.2 billion, or 30.4%, while real GDP could see a decline of up to 5.8%, which accounts for $4.9 billion. On top of this, revenues to the province could be reduced by up to $1.4 billion.

Natural resources

In the face of economic uncertainty, Budget 2025-26 predicts a continued resilience in the Saskatchewan resource sector with Non-Renewable Resources Revenue being projected at $2.7 billion in 2025-26, making up 12.8% of total revenue. This represents a $13 million or 0.5% increase from the 2024-25 Budget. Oil and natural gas revenue is projected at $1.1 billion, up $6 million—a similar 0.5%— from the 2024-25 Budget. Notably however, this is a $15 million decrease from last fiscal outlook—the third quarter forecast—produced by the government prior to the election.

Oil revenue is essentially flat budget-over-budget, as a lower West Texas Intermediate oil price in the coming year will be offset by a lower exchange rate forecast. For calculation purposes, the 2025-26 WTI oil price is forecasted to average US$71 per barrel, which is down from US$77 used in the previous budget. Despite the threat of tariffs on energy from the U.S. Saskatchewan’s oil production is projected to grow by 1.8% in the 2025-26 fiscal year, and increase at an average of 1.5% year from 2026-27 to 2029-30.

Potash revenue is budgeted at $720 million, down $76 million or nearly 9.6% from the 2024-25 Budget. The budget-over-budget decline is largely due to a lower forecasted average price of US$239 per tonne compared to US$268 per tonne in the 2024-25 Budget. Global demand for potash is expected to remain at or near record levels moving into 2025. Saskatchewan potash sales are forecast to be 24.9 million tonnes in 2025-26 and grow to 26 million tonnes by 2029-30. Potash markets are set to stabilize in 2025-26 following the global price correction in 2024-25.

Uranium revenue is budgeted at $290 million, up $116 million or 66.8% from the 2024-25 Budget. This increase reflects improved profitability in the sector, increased sales volumes and a lower exchange rate forecast

Key budget priorities

Affordability

The affordability measures in the 2025-26 Budget largely fulfill campaign promises made by the Sask. Party during the recent provincial election.

Budget 2025-26 commits the government to raising the basic personal exemption, spousal and equivalent-to-spousal exemption, dependent child exemption and the seniors supplement by $500 a year, for the next four years. It also increases the monthly income assistance benefits for Saskatchewan Income Support (SIS) and Saskatchewan Assured income for Disability (SAID) clients by 2%. Additionally, the government will be increasing the Disability Tax Credit and Caregiver Tax Credit by 25%.

Additional affordability measures announced in Budget 2025-26 include:

Doubling the Active Families Benefit refundable tax credit from $150 to $300 per child and doubling the income threshold to qualify to $120,000.
Reinstating the Home Renovation Tax Credit.
Increasing the Graduate Retention Program benefit by 20% to a maximum of $24,000.
Permanently maintaining the small business tax rate at 1%.

Healthcare

Budget 2025-26 also addresses healthcare, which was another driving theme from the past election that saw both parties coming forward with ways to solve the provinces backlog of surgeries and emergency wait times.

For 2025-26, the Ministry of Health receives a record $8.1 billion, which is an increase of $485 million, amounting to a 6.4% increase. The Saskatchewan Health Authority will also receive a historic budget, as it sees an additional $261 million flowing to their programs for a record $4.9 billion budget. Aside from these general healthcare increases, the Saskatchewan Cancer Agency will also receive an additional 12.2% increase in their funding, amounting to an increase of $30 million bringing the overall operating budget of $279 million.

Mental health and addictions programs and services will also receive an increase in funding, now receiving approximately 7.7% of the overall healthcare budget, at $624 million. Included in this is an increase of $20 million for targeted initiatives.

Overall, health capital funding will increase by $140 million, for a total of $657 million. This again is the highest ever capital budget for major health infrastructure projects in the province.

Education

Another campaign pillar that the electorate was laser focused on is addressed in Budget 2025-26, and the Ministry of Education will receive $3.5 billion overall. This equates to an increase of $184 million, or 5.5%, over the previous year. This includes an increase of $186 million in school operating funding for a total of $2.4 billion.

A contentious topic leading into the election campaign was the collective agreement bargaining with the Saskatchewan Teachers Federation. To this end, the government has set aside an increase of $130 million to fund the new teacher collective agreement and address growing student enrollment and the challenges facing today’s classrooms. While industry and labour responses have been critical if this is an adequate increase, some see it as a positive first step with more work to be done.

In terms of secondary and post-secondary education, the Ministry of Advanced Education will receive $788 million in this year’s budget. As part of their budget, universities, technical schools, Indigenous institutions and regional colleges will receive $718 million in operating and capital funding. The 2025-26 Budget also extends the current multi-year funding agreement for an additional year for the province’s post-secondary institutions to provide stable funding environments.

Public safety

The Government of Saskatchewan reinforced its position on ensuring the safety of Saskatchewanians across the province through new and continued investments in the 2025-26 Budget, including $679.4 million for the Ministry of Corrections, Policing and Public Safety, $118.9 million for the Saskatchewan Public Safety Agency, $8.8 million for the Saskatchewan Firearms Office (SFO), and $271 million for the Ministry of Justice and Attorney General.

Included in the budget is $260.0 million to fund RCMP operations in the province, including $23.7 million for the First Nations Policing Program. An additional $3.6 million will be invested to hire 50 new officers under the Saskatchewan Marshals Service

Saskatchewan NDP reaction

Saskatchewan NDP Leader Carla Beck was quick to comment on the budget, calling it a “work of fiction”, insisting that the document is written as if the trade issues with the U.S. have not happened the last 3-months. She expanded that this is a budget of cuts, without any contingency plan to address the negative impacts of the potential tariffs. NDP finance critic Trent Wotherspoon echoed Beck’s comments, saying the government’s reliance on special warrants to inject funding into government outside of the regular budget process remains an issue that means the financial numbers published in the budget cannot be trusted.

You can find their full comments and reactions linked below:

NDP Leader Carla Beck responds to Saskatchewan Party’s 2025 Budget

NDP Finance Critic Trent Wotherspoon Responds to Saskatchewan Party’s 2025 Budget

Setting the scene

Economic outlook

Natural resources

Key budget priorities

Affordability

Healthcare

Education

Public safety

Saskatchewan NDP reaction

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