Released on February 2, 2004
Strong growth in the oil and gas sectors is helping offset the dramatic impact of drought and BSE.Finance Minister Harry Van Mulligen released the 2003-04 Third Quarter Report this morning, which shows both total revenue and spending are up. Revenue is up $76.9 million from budget, and operating spending increased by $147.8 million.
"Saskatchewan's economy, except for agriculture, is performing extremely well," Van Mulligen said. "The Third Quarter Report also shows that interest costs on the public debt were down $30 million. However, drought and the BSE crisis are negatively affecting our bottom line."
Pressures in funding agricultural support programs and forest fire fighting have driven up operating spending, which increased $147.8 million from budget. Saskatchewan Agricultural Food and Rural Revitalization is $130.6 million over budget, mainly due to the need to accrue payments under the new Canadian Agricultural Net Income Stabilization program, which will be paid in 2004-05, and new programs for BSE. Saskatchewan Environment is up $40.5 million over budget due to forest fire management costs incurred during the past season.
To maintain a balanced budget, $463.3 million will be transferred from the Fiscal Stabilization Fund (FSF). This is an increase of $70.9 million from budget.
The good news on the revenue side is primarily due to increases in oil and gas prices, which led to higher than expected own-source revenues. Own-source revenue – the money generated by economic activity within Saskatchewan – is now projected to be $273.6 million higher than forecast in the provincial budget. However, when these revenue increases are factored in next year, there will likely be a subsequent decrease in equalization in 2004-05.
"This latest update of our current year's finances confirms what we learned at the mid-year point -- we will balance the budget this year with the aid of a large withdrawal from our Fiscal Stabilization Fund," Van Mulligen said. "We are still faced with difficult decisions as we align revenues and expenditures in carefully developing our 2004-05 budget."
The Third Quarter Report can be accessed at www.gov.sk.ca/finance.
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For More Information, Contact:
| Debbie Clark Finance Regina Phone: (306) 787-6605 |