Released on November 16, 2004
Saskatchewan's 2004-05 Mid-Year Report reveals considerable improvement to the Province's bottom line.Finance Minister Harry Van Mulligen released the report today, noting the General Revenue Fund (GRF) financial position improved almost $900 million relative to the Budget.
"This is a great day for Saskatchewan. We are not only confirming three years as a "have" province – we're showing a General Revenue Fund Surplus, a Summary Financial Statement Surplus, and we've reduced our debt levels," Van Mulligen said.
Van Mulligen said the improvement has offered opportunities for Government to continue on its path of funding key priorities and managing the debt load.
"Due to the volatility of our resource base, a carefully planned, balanced approach to government initiatives is critical," Van Mulligen said.
"The level of in-year improvement is unprecedented. But, much of it relates to extraordinary circumstances – largely, record high oil and natural gas prices and the previously announced decision of the federal Finance Minister to address previous high clawback rates on our natural resources under the equalization program," Van Mulligen said. "We cannot expect oil prices to remain at historically high levels forever; future treatment of Saskatchewan's natural resources under equalization will be a key consideration in the upcoming independent review of the program. So, much of the improvement we're seeing must be viewed as one-time in nature."
About two-thirds of this improvement derives directly from much higher non-renewable resource revenue – predominantly oil revenue, but also natural gas and potash revenue. Oil prices, which were estimated at $25 US per barrel in the 2004-05 Budget are currently expected to average slightly more than $40 US per barrel for the fiscal year.
The Mid-Year Report also revealed that operating spending, before implementation of new initiatives, is down about $5 million from Budget, while debt servicing costs are down about $24 million from Budget.
"This improved financial position has allowed us to meet our commitments on several fronts," Van Mulligen said. "We have allocated funds primarily to one-time initiatives that address some of our outstanding commitments and priorities."
Those commitments include:
· $110.1 million for education property tax relief (30 per cent of the $367 million increase in federal transfers)
· $54.1 million will be allocated in 2004-05 to offset a reduced CIC dividend that funds the lowest cost untility bundle commitment
· $40 million BSE top-up
· $66 million in new health funding for a number of initiatives, including expansion of MRI and CT scan services, replacement of some diagnostic imaging equipment, purchase of a new linear accelerator for the Saskatoon Cancer Centre, and efforts to retain health care providers
· Approximately $80 million to address third party capital and infrastructure commitments, notably outstanding municipal infrastructure commitments as well as post-secondary education capital
· Approximately $110 million for government-owned capital acquisitions, including building a new provincial lab, replacing the 1913 section of the Regina jail, and starting renewal of the forest fire fighting air fleet
· Approximately $75 million set aside to offset projected revenue losses associated with the smoking ban over the next three years
· An allocation for current year and ongoing operating spending items, including funding for the Province's share of the northern uranium mine clean-up and transition funding for the ITO (Information Technology Office)
· Approximately $179 million will be used to permanently reduce government debt
"We've acted on our promises to address and fund the priorities of Saskatchewan people, while maintaining our financial integrity. With these new initiatives, we've balanced new spending with debt management, and are confident Saskatchewan people will benefit from these measures now and into the future," Van Mulligen said.
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For More Information, Contact:
| Lorri Thacyk Finance Regina Phone: (306)787-6605 |