This policy brief highlights what the 2023 budget means for Saskatchewan’s digital economy. The province’s annual budget is published in the spring of each year and outlines the government’s main spending priorities.
Economic Update
Saskatchewan’s 2023 Budget, tabled on March 23rd, predominately focuses on provincial and municipal infrastructure projects, which the province calls “the foundation for economic development, job creation, and success in Saskatchewan.” In total, the 2023 budget earmarks $30 billion for infrastructure projects over the next seven years. In addition to infrastructure, Budget 2023 earmarks large investments in the province’s healthcare system, alongside smaller investments in education and social assistance. Saskatchewan remains optimistic despite citing how the growing risk of an economic slowdown could affect its revenues and expenses. The province notes that higher-than-expected spending in 2022 was recovered through record crop yields and high commodity prices, which puts Saskatchewan in a strong fiscal position heading into 2023.
Saskatchewan forecasts a $1 billion surplus driven by a growing economy, higher revenues from corporate tax, and increased revenue from non-renewables such as potash and oil and gas. The province plans to use this surplus to pay down its operating debt, reducing interests costs by $44 million annually. The province expects crop prices and oil prices to remain steady over the short and medium term, stabilizing economic performance. However, the province’s dependence on provincial sales tax could challenge its fiscal position. Consumer and business confidence as well as retail expenditures are tied to inflation and risk decreasing. If consumer spending falls, Saskatchewan will see lost revenues from sales tax. Lastly, the province expects to see an increase in health and social transfers from the federal government, which will offset some of the risk from external factors that can affect non-renewable revenues, like potash, oil and gas, and crown land sales.
Policy and Programs to Support Saskatchewan’s Digital Economy
While the digital economy is not a core focus of Saskatchewan’s 2023 Budget, the province does place significant emphasis on its agri-food and critical minerals sectors, which are both highly related to the digital economy. A total of $4 million will be allocated to expanding Saskatchewan’s Targeted Mineral Exploration Incentive which will accelerate the exploration and mining of critical minerals. The province’s Mineral Exploration Tax Credit is set to increase from 10% to 30% to attract mining companies and increase competitiveness in the critical mining sector. Further to this, $2.4 million will be allocated to improving geoscience data collection and analysis through new technologies and automation techniques. This data will be provided to mining explorers and stakeholders.
Budget 2023 also proposes to allocate $38 million to agricultural research and innovation, including new programs delivered under the five-year Sustainable Canada Agricultural Partnership. Agri-food is one of Canada’s most innovative sectors, however, barriers to adoption, such as a lack of sufficient broadband infrastructure and cost can prevent producers from adopting new technologies. New programs are likely to promote the adoption of precision agriculture and other technologies in ag, which increasingly play a role in sustainable agricultural production, drive efficiencies, and reduce waste.
In addition to natural resources, several budget line items are specifically focused on information and communications technology development and adoption, and could create procurement opportunities for technology businesses. This includes $412.7 million to develop the province’s information and communications technology infrastructure, continue deploying fibre to rural customers, and continue rolling out SaskTel’s 5G wireless network. It also includes $207.1 million to support information technology projects and medical equipment adoption in Saskatchewan’s healthcare sector, and $64.2 million for IT capital to support government services. Finally, $23 million is earmarked to support the startup and operation of the new Saskatchewan Distance learning Corporation, which will provide kindergarten to grade 12 students with a consistent user experience and flexible distance learning opportunities.
Supporting EDI and Workforce Development
The Budget earmarks $164.2 million for the Ministry of Immigration and Career Training, which is a $9.9 million or 6.4% increase over the Ministry’s 2022-2023 operating budget. The funding will be used to deliver workforce development programs that help meet current and future labour market needs in the province. With an eye to the international labour market, the 2023 budget also allocates $5.4 million to increase immigration through the Saskatchewan Immigrant Nominee Program, with additional funding earmarked to help incoming healthcare workers become licensed in Canada. Meanwhile, with an eye to Saskatchewan’s younger generation, the Graduate Retention Program has been extended and will continue to provide up to $20,000 in tax credits to post-secondary students who remain the province to work.
Protecting the Environment
While great emphasis is placed on harvesting the province’s natural resources, such as critical minerals, potash, and agri-food, less emphasis is placed on protecting natural resources. Water is the only natural resource protected by initiatives in the budget—namely, $85.6 million to support water management and irrigation projects. No funding is directly allocated to climate mitigation or reducing greenhouse gas emissions, highlighting a significant gap in the government’s environmental policies and programs.
No funding is earmarked for the development of Saskatchewan’s renewable energy industries, either. Currently, coal and natural gas provide the majority (82%) of Saskatchewan’s electricity generation. According to Canada’s Energy Regulator, for Saskatchewan to have a net-zero electricity grid by 2050, the province will need to make sizeable investments in new wind and solar generation over the next ten years. While the planned upgrades to the EB Campbell hydroelectric station are a welcome investment in the 2023 budget, the province will not be able to achieve net-zero electricity generation without significant investment in additional clean electricity capacity—namely, wind and solar.
Connecting with International Markets
In terms of international trade, Budget 2023 proposes to allocate $1.4 million to open a trade office for the province in Germany. The office will be Saskatchewan’s first office location in the European Union and will enable market access to new international markets for Saskatchewan businesses. The office adds to Saskatchewan’s growing portfolio of international trade offices, which are strategic to the province’s international trade strategy, including offices in the United Kingdom, United Arab Emirates, India, Singapore, Vietnam, China, and Japan. The government has also earmarked funds to support the economic advancement of First Nations and Métis people and organizations: Budget 2023 proposes to provide $249.1 million to support the advancement of First nations and Métis businesses both domestically and internationally through economic initiatives and partnerships.
This brief is part of ICTC’s policy updates series. ICTC provides timely updates on policy and political developments in Canada, including federal, provincial, and territorial elections campaigns, fall economic updates, annual budgets, and other major updates to policy and programs. Written by Allison Clark, Erik Henningsmoen, Mairead Matthews, Mansharn Toor, Justin Ratcliffe, and Todd Legere, with generous support from the ICTC Research and Policy Team.
