Minister of Finance and Deputy Premier Jim Reiter, with his second budget on March 18. 2026. Government of Saskatchewan photo

REGINA – There might be a war going on in Iran, the Strait of Hormuz may be shut down, and WTI might currently be US$94 a barrel – but that clearly wasn’t the case when the Saskatchewan 2026-27 budget was crafted.

Because when you dig into it, the budget’s outlook for 2026-27 fiscal year is downright gloomy.

Oil-related numbers were locked down in February, before the Iran War caused a roughly $40 increase in oil prices. But as that conflict is by nature unpredictable, the budget was crafted with what was in hand, and that outlook didn’t look all that great.

The forecast WTI oil price is set at US$59.75 per barrel. That’s down $11.25 from the US$71 that was in last year’s budget. It turns out that US$71 was optimistic, as the forecast for WTI to the year ending March 31, 2026 is just US$61.69. As anyone in the patch can attest, most of the last year was pretty tough, with oil prices on a downward trend for much of the year until just before the Iran war kicked off, and prices down into the US$50s for a barrel of WTI.

And that means a serious drop in expected oil revenue for the upcoming year. The budget noted, “The overall outlook is shaped by lower oil revenue, partially offset by higher potash revenue and stable uranium revenue. Oil and natural gas revenue is forecast at $721 million, a decrease of $347 million, or 32.5 per cent, from the 2025‑26 Budget. The decline reflects significantly lower forecasted oil prices and production levels as compared to the prior budget, partially offset by a lower exchange rate forecast.

That’s a serious hit, despite production volumes being essentially flat. Actual production for 2024-25 was 163.1 million barrels (446,849 bpd). Last year’s budget expected 166.9 million barrels (457,260 bpd), but the forecast now expects the year ending March 31, 2026 to come in at 160.3 million barrels (438,178 bpd). For 2026-27, the budget expects 165.7 million barrels per day (453,973 bpd).

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For every dollar change in the price of WTI, it impacts provincial revenues $16 million. So, for instance, if WTI stayed at US$89.75 for the duration of the fiscal year, or at least averaged that, then presumably the province would receive $480 million CAD in additional revenue during the fiscal year. But if the Canadian dollar goes up one cent compared to the US dollar, then revenues decline $42 million CAD.

So while the elevated price of oil right now could have a positive impact on revenues, the province isn’t banking on it just yet.

The 2026-27 Budget projects $21.4 billion in revenue compared to $22.2 billion in total expense, resulting in a deficit of $819 million.

“Saskatchewan’s diverse economy and growing export markets mean we are better positioned than most provinces to get through the current economic turmoil caused by tariffs and global conflicts,” Deputy Premier and Finance Minister Jim Reiter said. “Still, Saskatchewan is not immune and these events have had an impact on our economy and provincial finances.

“We had a choice: cut services, raise taxes or protect Saskatchewan. We chose to protect Saskatchewan.”

Reiter said the top two concerns the government has heard from Saskatchewan people are affordability and access to health care.

“This budget addresses both by lowering taxes for everyone to make life more affordable and by investing to ensure everyone can get the right care in the right place at the right time through our Patients First Health Care Plan,” Reiter said.

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In an embargoed press briefing, Reiter said, “You know, what keeps me up at night in the whole budget process is just the absolute volatility of world markets.

“I’ll use oil as the example again. The premier was talking about this when he went on that trade mission to India with Prime Minister Carney. When he left, I think the price of oil was around $60 a barrel. They were gone, I don’t know, like six days or something, he came back, and it was almost $100. Like, it’s just so volatile, and other commodities, maybe not as much so, but they’re volatile as well. So it makes it very difficult to take those forces are the forces beyond our control. So you do the best you can with them and the forces that you can’t control, you focus on those you can control.”

Minister of Finance and Deputy Premier Jim Reiter, with his second budget on March 18. 2026. Government of Saskatchewan photo

When asked about possible additional revenues from oil due to the conflict, and what the government might do with them, given the volatility of the markets, Reiter responded, “I’ll tell, you see how volatile the world is today, you never say never. I don’t anticipate that. I, you know, we’ve had some criticism from the opposition already. We’re not even into the new fiscal year that we’re budgeting, that we’re we should be doing something with the extra oil revenues. Well, you know, if, and it’s a big if, there are extra oil revenues, we’re going to have other pressures. There’s health care pressures, or whatever the case may be. So a budget snapshot in time. You estimate both revenues expenditures at that time, and then you take it from there.”

He had pointed out the government’s guideline is to plan on no more that 15 per cent of overall revenue to come from non-renewable resources. This budget pegs it at 11.5 per cent. If there is additional revenue he said, “We obviously would like to use that significant amount of it to pay down debt.”

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Digging deep

Pipeline Online poured through the budget documents, and below are excerpts of energy-related items:

Non-renewable resources:

Non‑renewable resources revenue for 2026‑27 is projected at $2.6 billion, representing 12.0 per cent of total revenue. This reflects a decrease of $132 million, or 4.9 per cent, from the 2025‑26 Budget.

Resource forecast assumptions and sensitivities The 2026‑27 Budget incorporates the average of private‑sector forecasts for global economic growth, commodity prices, and the Canadian dollar— key external factors that significantly influence non‑renewable resources revenue.

The revenue outlook is subject to several risks, including volatility in global commodity markets, geopolitical developments, exchange rate movements, and potential supply chain or transportation disruptions. These factors can materially influence both commodity prices and production levels, and therefore the value of Saskatchewan’s non-renewable resource revenues.

For 2026‑27, the West Texas Intermediate (WTI) oil price is assumed to average US$59.75 per barrel, reflecting a lower price environment compared to the 2025‑26 Budget. A significant portion of

Saskatchewan’s oil production continues to trade at a discount to WTI due to its heavier quality, and the light‑heavy differential is expected to remain stable budget-over-budget at 14.7 per cent. This assumption reflects current North American supply dynamics and available pipeline capacity.

Other non‑renewable resources revenue—including coal, precious metals, mineral disposition public offerings, and other fees—is projected at $106 million, an improvement of $11 million, or 11.8 per cent, from the previous budget, reflecting expected activity levels across the sector at levels similar to the 2025-26 third quarter report.

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High Water-Cut Oil Well Program

First introduced in 1999 and redesigned in 2021, the High Water-Cut Oil Well Program addresses the increased operating costs of oil wells that produce a water-cut (water-to-oil ratio at production) of 90 per cent or higher. The program offers a royalty rate reduction for qualifying high water-cut oil wells that incur a minimum qualifying investment to directly improve water handling capabilities and extend the production cycle.

The 2026-27 Budget announces a five-year extension of the program eligibility period to March 31, 2031. Eligible high water-cut old, new and third-tier oil wells receive the fourth-tier royalty rate (the lowest among all royalty classifications) on the incremental production volume, and fourth-tier oil wells receive a two per cent royalty rate reduction on all oil produced.

The minimum investment per well will also be increased from $20,000 to $30,000 to reflect inflationary pressures. This increased amount is comparable to the average investment that the prospective incentive recipients must spend given the current economic environment.

 


As an export-oriented economy, Saskatchewan is particularly sensitive to the state of the global economy. In 2025, Saskatchewan recorded one of the highest ever values of goods exported at $43.5 billion.

This was a strong performance despite generally weak global commodity prices, particularly oil prices, coupled with the effects of tariffs from the U.S., China and India.

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Saskatchewan economic outlook

Saskatchewan’s economy was resilient in 2025 amid the effects of weak global oil prices, trade uncertainty and population growth slowing. Saskatchewan is forecast to have the third highest growth among Canadian provinces in 2025, with real GDP estimated to have grown by 2.2 per cent, according to the average of private sector forecasters1.

According to private sector forecasters, Saskatchewan’s real GDP is projected to grow by 1.6 per cent in 2026, with significant investment in business and residential construction supporting continued employment growth despite ongoing trade uncertainty.

Over the medium term, real GDP growth is forecast to average 2.3 per cent annually from 2027 to 2030 as recovery from trade uncertainty is expected to propel the economy back to its historical growth path. Strong investment activity, especially in the natural resource sectors and value-added agriculture, will be a key driver of growth over this period.

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Oil production to grow over the medium term

(Editor’s note: This was drafted before the Iran war kicked off, so take these forecasts with a grain of salt.)

Global oil production continues to expand, resulting from the Organization of Petroleum Exporting Countries Plus (OPEC+) decision to keep unwinding its crude oil production cuts. According to the International Energy Agency, global oil production is expected to increase by 2.5 million barrels per day in 2026, following supply growth of 3.0 million barrels per day in 2025.

Saskatchewan’s oil production is projected to grow by 3.4 per cent in the 2026-27 fiscal year and increase at an average of 1.1 per cent per year over the medium term (2027-28 to 2030-31). This is expected to be driven by growth in investment in response to a narrower price differential and improved local pricing following the completion of the Trans Mountain Pipeline expansion.

The increase in OPEC+ oil production and weak global growth in oil demand have combined to create an oversupplied market, resulting in a lower West Texas Intermediate (WTI) oil price in 2025. The oversupplied condition is expected to continue in 2026, leading to softer WTI prices in the near term.

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Trade uncertainty and tariffs persist, but their impact has been milder than initially feared

Amid rising trade protectionism and softer global demand, Saskatchewan’s total goods exports were valued at $43.5 billion in 2025, above the prior five-year average level of $42.8 billion, but down 4.0 per cent compared to 2024. The largest declines were in energy products (-$1.9 billion) where low oil prices drove the reduction in exports. Other notable declines in tariff-impacted sectors were in agricultural products (-$612.1 million), forestry products (-$192.2 million), industrial machinery (-$95.9 million, and metal and related products (-$124.3 million). These declines were partially offset by an increase in mining product exports under the category of metal ores and non-metallic minerals (+$1.0 billion).

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From the Energy and Resources press release:

“This budget makes strategic investments in our energy and mining sectors so they can continue to grow their industries, create good jobs and power economic growth in our province,” Energy and Resources Minister Chris Beaudry said. “Our government will continue to be a strong supporter of our world class resource sectors, which are key to our province’s future and our commitment to protecting Saskatchewan.”

This year’s budget includes $2.3 million for the third year of the Saskatchewan Geological Survey’s (SGS) Public Geoscience Initiative. This investment will improve access to new, high-quality geoscience information to encourage mineral exploration and promote new critical mineral discoveries. The Public Geoscience Initiative is a $10 million commitment by the Government of Saskatchewan that spans over 10 years.

The budget also provides $3.5 million for the continuation of the Targeted Mineral Exploration Incentive (TMEI), a key program designed to grow and diversify Saskatchewan’s mining sector and drive mineral exploration activity. In 2025, Saskatchewan exploration expenditures are estimated to have reached 17 per cent of the Canadian total, which would surpass the Critical Mineral Strategy goal of reaching 15 per cent of national exploration expenditures by 2030.

The High Water-Cut Oil Well Program is extended in this budget to support oil production and contribute to reaching Saskatchewan’s goal of 600,000 barrels per day by 2030. In alignment with the Saskatchewan Growth Plan, this program encourages capital investment and extends the life of existing oil wells.

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From Captital Projects press release:

Crown Corporations – $2.5 Billion in 2026-27

  • $1.7 billion through SaskPower to help to meet increasing electricity demand in the province and provide reliable and cost-effective electricity generation, which includes investing in coal-fired generation life extension as a bridge to nuclear power, expansion of transmission infrastructure, and system sustainment;
  • $308.8 million through SaskEnergy to invest in the province’s natural gas transmission and distribution system to ensure safe, reliable and affordable services to customers. Work to serve SaskPower’s Aspen Power Plant located northwest of Lanigan is forecast to be completed in 2026-27, ending one of the largest customer connection projects in recent company history; and,
  • $539.1 million through other Crown corporations, including $433.3 million at SaskTel to support ongoing projects that advance key technologies, including fibre and 5G, to ensure customers across the province have access to fast and reliable connectivity.
  • 0114 Prospera Bold Vision
    0114 Prospera Bold Vision
  • 0113 Miller Epic Cinematic Hollywood trailer
    0113 Miller Epic Cinematic Hollywood trailer
  • 0111 2026 SK Oil Show booth promo 01
    0111 2026 SK Oil Show booth promo 01
  • 0085 Turnbull snow removal call office
    0085 Turnbull snow removal call office
  • 0110 SaskEnergy SEI_Network_Members_Burn_Brighter
    0110 SaskEnergy SEI_Network_Members_Burn_Brighter
  • 0105 SaskEnergy Commitment to Safety
    0105 SaskEnergy Commitment to Safety
  • 0102 Lori Carr Coal Extended
    0102 Lori Carr Coal Extended
  • 0100 Turnbull Project Manager
    0100 Turnbull Project Manager
  • 0099 Mryglod Steel 1080p
    0099 Mryglod Steel 1080p
  • 0097 Eagle Sky Ventures LTD
    0097 Eagle Sky Ventures LTD
  • 0095 Fast Trucking nearly 70 years good at it
    0095 Fast Trucking nearly 70 years good at it
  • 0092 Turnbull projects big and small
    0092 Turnbull projects big and small
  • 0046 City of Estevan This is Estevan Teaser
    0046 City of Estevan This is Estevan Teaser
  • 0077 Caprice Resources Stand Up For Free Speech
    0077 Caprice Resources Stand Up For Free Speech
  • 0061 SIMSA 2024 For Sask Buy Sask
    0061 SIMSA 2024 For Sask Buy Sask
  • 0051 JML Hiring Pumpjack assembly
    0051 JML Hiring Pumpjack assembly
  • 0049 Scotsburn Dental soft guitar
    0049 Scotsburn Dental soft guitar
  • 0041 DEEP Since 2018 now we are going to build
    0041 DEEP Since 2018 now we are going to build
  • 0032 IWS Summer hiring rock trailer music
  • 0022 Grimes winter hiring
  • 0021 OSY Rentals S8 Promo
  • 0018 IWS Hiring Royal Summer
  • 0013 Panther Drilling PO ad 03 top drive rigs
  • 0002 gilliss casing services
    0002 gilliss casing services
  • 9002 Pipeline Online 30 sec EBEX
    9002 Pipeline Online 30 sec EBEX
  • 9001

From Highways and Transportaton press release:

Several highways in the oilpatch are going to see restoration work. Highway 47 from Estevan north to the Lampman turnoff is scheduled for “heavy restoration.” The pounded out ruts in the pavement surface are evidence of the need of that restoration.

The Lloydminster area will see a fair bit of work. Passing lanes will be added to Highway 17 north of the city. From Lloydminster to Lashburn, Highway 16 will see medium and heavy restoration. Highway 303 east of the city will see light restoration, as will Highway Highway 21 south of Maidstone.

Highway 1 east of Gull Lake will also see medium restoration.

 

  • 0114 Prospera Bold Vision
    0114 Prospera Bold Vision
  • 0113 Miller Epic Cinematic Hollywood trailer
    0113 Miller Epic Cinematic Hollywood trailer
  • 0111 2026 SK Oil Show booth promo 01
    0111 2026 SK Oil Show booth promo 01
  • 0085 Turnbull snow removal call office
    0085 Turnbull snow removal call office
  • 0110 SaskEnergy SEI_Network_Members_Burn_Brighter
    0110 SaskEnergy SEI_Network_Members_Burn_Brighter
  • 0105 SaskEnergy Commitment to Safety
    0105 SaskEnergy Commitment to Safety
  • 0102 Lori Carr Coal Extended
    0102 Lori Carr Coal Extended
  • 0100 Turnbull Project Manager
    0100 Turnbull Project Manager
  • 0099 Mryglod Steel 1080p
    0099 Mryglod Steel 1080p
  • 0097 Eagle Sky Ventures LTD
    0097 Eagle Sky Ventures LTD
  • 0095 Fast Trucking nearly 70 years good at it
    0095 Fast Trucking nearly 70 years good at it
  • 0092 Turnbull projects big and small
    0092 Turnbull projects big and small
  • 0046 City of Estevan This is Estevan Teaser
    0046 City of Estevan This is Estevan Teaser
  • 0077 Caprice Resources Stand Up For Free Speech
    0077 Caprice Resources Stand Up For Free Speech
  • 0061 SIMSA 2024 For Sask Buy Sask
    0061 SIMSA 2024 For Sask Buy Sask
  • 0051 JML Hiring Pumpjack assembly
    0051 JML Hiring Pumpjack assembly
  • 0049 Scotsburn Dental soft guitar
    0049 Scotsburn Dental soft guitar
  • 0041 DEEP Since 2018 now we are going to build
    0041 DEEP Since 2018 now we are going to build
  • 0032 IWS Summer hiring rock trailer music
  • 0022 Grimes winter hiring
  • 0021 OSY Rentals S8 Promo
  • 0018 IWS Hiring Royal Summer
  • 0013 Panther Drilling PO ad 03 top drive rigs
  • 0002 gilliss casing services
    0002 gilliss casing services
  • 9002 Pipeline Online 30 sec EBEX
    9002 Pipeline Online 30 sec EBEX
  • 9001