Released on July 30, 2004
Saskatchewan's 2004-05 First Quarter Report reveals strong resource revenues, particularly in the oil and gas sectors.Provincial own-source revenue is up $372.4 million from budget. Oil revenue increased $208 million, and natural gas revenue is up by $88.5 million from budget. Both increases are due to higher prices. However, Finance Minister Harry Van Mulligen said that the good news is tempered by the fact that federal equalization is down nearly $310 million from budget estimates, virtually offsetting the increased resource revenues.
"We are certainly pleased that own-source revenues are performing so well, which is a healthy injection for our provincial economy," Van Mulligen said. "However, it's important to note that under the current equalization formula, close to 90 per cent of those revenues are clawed back. Many other factors can affect our financial picture throughout the year, including further equalization revisions. But I'm optimistic about the good start."
According to the report, the government is still forecasting a transfer from the Fiscal Stabilization Fund (FSF) to balance the Budget. However, it is down $70.5 million from the Budget estimate of $171.1 million to $100.6 million.
Van Mulligen noted that the Government's decision to create the Fiscal Stabilization Fund in 2000-01 was a sound one. "Although we are relying less and less on the Fiscal Stabilization Fund, it is still there to help us provide key public services such as health care, while balancing the budget." Van Mulligen said.
The First Quarter Report also revealed Government spending in nearly all departments is on-target with Budget. There are three exceptions: $2.7 million in additional funding is required by Saskatchewan Environment mainly for increased protection zones for northern communities; Health needs an additional $1 million for the expanded childhood immunization program; and $5 million more is needed for 2005 Saskatchewan Centennial programs and events through Culture, Youth and Recreation. In total, provincial operating spending is up $8.7 million.
"We are continuing to keep close tabs on spending, focusing on the priorities of the people of Saskatchewan, while maintaining the values of sound financial management," Van Mulligen said. "We are sticking with the plan we laid out in the budget."
An update on the supplementary summary financial results included in the 2004-05 Budget will be included in the Mid-Year report. The Mid-Year report provides a more detailed financial picture than the quarterly reports, and it includes a revised economic forecast.
The First Quarter 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 |