Saskatchewan Premier Brad Wall warns rural leaders of tighter budget

REGINA – Saskatchewan Premier Brad Wall says the province’s revenue is flat and the budget next week will be tight.

Wall made the comments today to reeves and councillors at the Saskatchewan Association of Rural Municipalities annual convention.

The premier told the crowd that the same thing happened in 2009 when the economy was strong, but revenue was weak.

Potash revenues collapsed in 2009, leaving a big hole in the provincial coffers.

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Wall says revenue will be down again this year, in part because of potash, and he says the government will have to make decisions to keep the budget balanced.

The premier later told reporters the government will try to keep spending increases in the three per cent range.

Potash is a mineral used primarily as fertilizer. Saskatchewan collects billions in tax and royalty revenue from companies that mine the resource.

But demand for potash softened and prices fell last year after Russian-based Uralkali, one of the world’s largest potash producers, quit an export partnership. China and India – key markets for fertilizer – then delayed purchases in expectation of lower prices.

The Saskatchewan government said in its third-quarter financial update in February that potash revenue is expected to be down $179.1 million from the budget estimate last March.

The province said it would have to take $135 million out of its savings to offset the shortfall in its general revenue fund.