Merkley also scored in regulation time for Lethbridge (10-7-2), while Remi Laurencelle and Craig Leverton both scored in the third period to tie the game and force overtime. Captain Graham Hood also scored for the Hurricanes.
Dalton Thrower and Adam Kambeitz both scored on the power play for Saskatoon (7-9-1), while Josh Nicholls and Matej Stransky had goals as well.
Ty Rimmer made 24 saves for Lethbridge as Andrey Makarov stopped 40 shots for the Blades.
The Hurricanes went 0-for-4 on the power play, while Saskatoon was 2-for-4 with the man advantage.
Sam Mckechnie and Tyler Wong were Lethbridge's other skaters in the shootout, while Shane McColgan, Nicholls and Stransky went for the Blades.