Budget Update

In an article I did in late March on the 2009-10 Saskatchewan budget, I suggested that for next year's budget address Finance Minister Rod Gantefoer consider dressing as a fortune teller with a crystal ball. That's because, when it comes to revenue projections in particular, much is dependent on prices that the Finance department forecasts for key commodities like oil, natural gas and potash. Today, Gantefoer is delivering his first quarter financial update. The news it contains is not good. In 2009-10, Saskatchewan will apparently take in a whopping $1.3 billion less in potash royalties than initially forecast. That will be offset somewhat by a $668 million increase in oil royalties and taxes, but that still leaves the province with a $558 million shortfall that will require the government to defer several spending committments and raid--I mean, take a special dividend of $185 million from the Crown Investments Corp. Hindsight is always 20-20, so it's pretty easy to rip Gantefoer and his officials for being so wrong with their potash revenue estimate. But it's also true that in the current economic climate, it's virtually impossible to forecast anything with a reasonable degree of accuracy. Here's more on the story from CBC.