Released on November 27, 2003
Saskatchewan's economy is now expected to post four per cent growth in GDP this year. The province will have the second highest rate of economic growth in Canada for the year, according to the Conference Board of Canada's provincial economic forecast.Finance Minister Harry Van Mulligen released the Province's 2003-04 Mid-Year Report this morning which shows a strong provincial economy in spite of agricultural challenges, including a below average crop year. The report indicates own-source revenue is projected to be $226 million above budget.
"The oil and gas industries continue to perform well and enhance the provincial economy," Van Mulligen said. "Oil revenue is up $202.8 million over budget mostly because of higher than expected world prices. Natural gas is also up $78.9 million over budget, due to higher prices, drilling forecasts and production."
Total revenue is up $26.6 million over budget. Own-source revenue gains were offset significantly by reduced transfer payments. Federal transfers are down $199.4 million from budget, mainly due to revised population estimates and higher oil and natural gas revenue.
Operating spending projections at mid-year increased $131.1 million over budget. Most of the expenditure increases are related to the BSE crisis and higher than expected costs to prepare for and fight forest fires. Saskatchewan Agriculture, Food and Rural Revitalization is projected to be $47.6 million over budget and Saskatchewan Environment is projected to be $59.1 million over budget.
"While the Mid-Year Report identifies some challenges, it is important to note we are just at the halfway point of the fiscal year. We will continue to manage the province's finances carefully, focusing on public priorities, while remaining fiscally responsible with spending," Van Mulligen added.
Van Mulligen noted both debt and interest costs are forecast to be lower than Budget. Debt is down $223 million from Budget, and interest on the public debt is $20 million lower because of favorable interest rates and U.S. exchange rates.
To maintain a balanced budget in the General Revenue Fund (GRF), the transfer from the Fiscal Stabilization Fund (FSF) has increased.
"We're using the Fund for its intended purpose: to help us manage our finances during difficult times," Van Mulligen said. In this case, we needed that transfer to offset the increased cost of managing forest fires and BSE."
The Mid-Year Report can be found at www.gov.sk.ca/finance under the "Publications" tab.
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For More Information, Contact:
| Debbie Clark Finance Regina Phone: (306)787-6605 Email: dclark@finance.gov.sk.ca |