REGINA – Low natural resource prices have prompted Standard & Poor’s to downgrade Saskatchewan’s credit rating to double-A-plus from triple-A.

The agency says the move reflects the impact that “persistently low natural resource prices, in particular oil and potash, have had and are expected to continue having” on the province’s budget.

“I’m not pleased about that obviously,” Finance Minister Kevin Doherty said Monday at the legislature.

“But we’re working hard towards our plan. We presented our budget on June 1, indicated what the situation was with respect to our revenues, indicated that we were going to work hard towards getting back to balance next fiscal year, and that’s still our goal.

“It will not be easy, I can assure you of that. But we’re going to continue doing everything we can to meet that objective.”

At a budget update in February, Doherty said the government was expecting a deficit of $427 million for the fiscal year that ended March 31, although final numbers were not yet available.

He also said the government was aiming for a deficit of $259 million for the 2016-2017 fiscal year. However, the budget tabled June 1 projects a $434-million deficit.

The Standard & Poor’s report notes that Saskatchewan’s “cash reserves have fallen notably and cannot be used to cover deficits.”

The agency’s negative outlook also says in the next two years there is a one-in-three chance the province will not be able to meet its budget targets of low or no growth in operating expenditures.

“They’re laying out what they see happening if resource revenues do not return to a more stable level. Then there’s no question that it’s going to continue to present some difficulties for us,” said Doherty.

NDP finance critic Cathy Sproule said the S&P report is a concern.

“I think we have to pay attention to what the lenders are saying because, as you know, every time the interest rate goes up, it’s almost like the taxpayers are paying more. That’s something that in this current environment we have to be very careful with,” said Sproule.

There are some positive comments in the report.

It says Saskatchewan’s financial results are less volatile than those of other Canadian provinces with resource-based economies such as Alberta and Newfoundland and Labrador because of the diversity of its resource base.

Despite continued negative GDP growth expected in 2016, “in our view, the provincial economy is very strong.”