Finance Ministry weighs COVID-19 impact on budget
REGINA As the Saskatchewan government finalizes its upcoming budget, it’s unclear how much the economic impact of the novel coronavirus will figure into its bottom line.
This week, COVID -19 outbreaks sweeping across the globe have triggered a stock market sell-off, plunging oil prices and fears of a worldwide slowdown.
All of that could affect the economic assumptions on which budgeting depends. Lower oil prices mean less money through resource royalties, while GDP growth forecasts weigh heavily on other revenue sources.
The government said the Ministry of Finance “is closely monitoring the situation as (it) pertains to Saskatchewan’s fiscal outlook.”
But it won’t say much else, pointing to the confidentiality of the budget process. There was little information on how — or even whether — finance officials have reworked the budget at such a late stage. The budget is expected on March 18.
“As this is an evolving situation, Finance will incorporate recent private sector forecasts into some fiscal assumptions to mitigate some market related risks,” said a statement from Jim Billington, press secretary to Premier Scott Moe.
NDP Leader Ryan Meili said the impact of the COVID -19 outbreaks on the economy should be weighing on the minds of finance officials.
“It absolutely should be factored into the projections for economic activity here in the province of Saskatchewan.”
Instead, Meili said he’s expecting a budget “full of fictions.”
Amid global financial jitters, oil prices have fallen to a 12-month low, with the benchmark West Texas Intermediate (WTI) at US$45 a barrel on Friday. Western Canadian Select was at US$31 a barrel.
Saskatchewan’s 2019-20 midyear financial update forecast the WTI price at US$57.
A fall of roughly US$1 in the price of oil shaves about C$15 million off of government revenue.