Saskatchewan is forecasting a $427 million deficit at mid-year, representing a vast departure from the modest $12 million surplus projected in the 2025-26 budget.

Finance Minister Jim Reiter delivered the update Tuesday morning, where he identified ongoing trade issues with the U.S., China and India as the main determining factors of the current economic climate.

“A lot of the economic factors we’re dealing with, most of them, in fact, aren’t provincial issues,” Reiter told reporters. “They’re geopolitical issues. They’re Canada-wide, North America-wide, worldwide – and when you have an export-based economy, like us, you’re susceptible to trade issues around the world, and geopolitical issues around the world.”

According to the minister, Saskatchewan has evaded the worst effects of the U.S. tariffs so far, but a swift end to all trade related conflicts is still needed.

“We’ve been fortunate so far that the vast majority of our products that are shipped from here are CUSMA compliant, and so we haven’t had a huge impact. But having said that, we’ve got to get this trade issue settled with both the U.S. and China and now India, our major trading partners,” Reiter said.

“It’s going to continue to have an impact if it doesn’t get sorted out.”

The current deficit represents a $79 million increase from the province’s first quarter projections and a $440 million increase from the 2025-26 budget.

Saskatchewan NDP MLA Trent Wotherspoon had some choice words for the government’s latest update.

“The Sask. Party’s so-called $12 million surplus was blown on Budget Day before the crowd in the gallery departed to eat cream puffs in the library at the Budget Day Tea,” he told reporters.

“They promised a $12 million surplus and now it’s looking more like a half-billion-dollar deficit with a billion more in debt from their bogus budget. As we said at budget time, this budget wasn’t worth the paper it was printed on. Sure enough, the numbers have come home to roost.”

Total expense at mid-year is forecast to increase $521 million or 2.5 per cent from budget thanks to an additional $295 million allocated to the Saskatchewan Public Safety Agency (SPSA), $250 million to address health care utilization pressures and $114 million in pension expenses, partially offset by a decrease in expected crop insurance claims.

Saskatchewan’s total gross debt is forecast to be $39.3 billion at fiscal year end, which represents an increase of $962 million or 2.5 per cent from budget.

Total revenue is forecast to increase by $82 million. Increases include $273 million from federal transfers, $129 million in other own-source revenue – which are mainly due to higher fees driven by population and economic growth – in addition to increased gaming revenue.

However, the revenue increase is largely being offset by a $292 million reduction in SaskPower income. According to the province, this is due to the removal of the federal carbon tax charge from customer’s bills.

Non-renewable resource revenue is forecast to decrease by $93 million to a higher exchange rate and lower price of oil.

Saskatchewan’s GDP growth is forecast to be 1.7 per cent in 2025, coming off a three per cent increase in 2024.

Despite the rising deficit, Reiter defended the province’s position and fiscal health.

“There’s not a balanced budget across the country right now because of economic headwinds. So, we are in the best position of any province in the country,” he said.

“We’ve got lots of work to do ahead of us. There’s going to be lots of issues to deal with.”