SASKATOON, Sask. — Despite the continuing uncertainty due to the current geopolitical situation and ongoing trade tensions between Canada and the US, Finance Minister Jim Reiter believes Saskatchewan will survive the threats and that the province’s economy remains resilient.
Reiter commented on Thursday, Aug. 27, as the provincial government released its 2026-2027 First Quarter Financial Report at the Saskatoon Cabinet Office. The report projected an $825-million deficit, $6 million higher than the $819-million deficit forecast in the provincial budget.
He said Saskatchewan’s strong economic fundamentals and fiscal position provide some protection against uncertainty in global markets, adding that the government is closely watching developments that could quickly alter its economic outlook.
“We’re in a situation like every other province. And in this deficit, it is much more manageable. I say I’m a fiscal conservative and I want to get back to balance,” said Reiter, who added that the government must continue to monitor expenditures and ensure healthcare and education are properly funded.
The province is also forecasting $21.7 billion in revenue and $22.6 billion in expenses. Revenue is $331 million higher than budget because of stronger non-renewable resource revenue, while expenses are $337 million over budget due to healthcare pressures, flood response and higher crop-insurance claims.
Much of the revenue is linked to higher oil prices driven by geopolitical instability, including the ongoing conflict in the Middle East, especially in the Strait of Hormuz. The province has increased its forecast for West Texas Intermediate crude to US$75 a barrel from the US$59.75 assumed in the budget.
But Reiter cautioned that geopolitical developments can just as quickly work against Saskatchewan, given the province’s dependence on commodity markets. At the same time, oil prices remain volatile and difficult to predict, making them a significant variable in the province’s fiscal projections.
“You’re going to get some fluctuation, but if you look at the overall trend, it’s significant,” Reiter, who is also the deputy premier, pointed out, noting Saskatchewan’s strong export performance despite the uncertainty surrounding international trade.
He added that the ongoing Canada-US trade wars remain another major risk for the province, with tariffs imposed by the Trump administration so far affecting specific industries, including forestry, steel and equipment manufacturing, rather than the Saskatchewan economy as a whole.
Reiter said. While he described Saskatchewan as fortunate so far, he added that the province is “absolutely very concerned” about industries that have been directly targeted. Situations remain difficult to forecast because the rules governing Canada-US trade can change quickly.
He said the province has to be prepared for the possibility that tariffs could expand or that trade conditions could deteriorate, even as current economic indicators remain positive. For now, Saskatchewan’s export numbers are providing some reassurance.
Saskatchewan’s exports exceeded $24 billion during the first half of 2026, an increase of about 12 per cent from the same period last year, putting the province on pace for one of its strongest annual export totals, with growth across international markets.
Diversifying Saskatchewan’s markets shows the importance of maintaining relationships beyond the US and continuing efforts to find other trading partners. The diversification could help reduce the province’s exposure to disruptions in any one market.
“We’re an export-based economy. When our sectors are doing well, the resulting revenues can help pay for healthcare, education, highways, and other public services,” said Reiter, who added that strong commodity sectors create employment and generate revenues for the provincial government.
He said that despite the uncertainty, private-sector forecasters expect Saskatchewan to remain one of Canada’s fastest-growing provincial economies, with real GDP growth projected to rank third among provinces in 2026 and second in 2027.
Reiter said major private-sector investments, strong housing construction and elevated commodity prices are expected to support that growth. Around 60 major private-sector projects worth over $60 billion are currently underway or planned, providing another source of economic strength.
He added that these investments can create jobs and expand the provincial revenue base, helping the government work to eliminate the deficit and reach the goal through expenditure discipline and increased revenues while continuing to fund healthcare and education properly.
“There’s so much going on internationally in finance that we can’t control,” said Reiter, who also acknowledged that tariffs, commodity prices, borrowing costs and unresolved collective bargaining agreements could change the fiscal picture in future quarterly updates.
Saskatchewan's net debt-to-GDP ratio is projected to be 14.9 per cent as of March 31, 2027, an improvement from the 16.1 per cent projected in the 2026-27 budget. Saskatchewan's net debt-to-GDP ratio remains the second-best among all provinces.
NDP finance critic Trent Wotherspoon responded to Reiter's announcement. See the story here.
