Released on September 21, 2006
Finance Minister Andrew Thomson says that while the Province of Saskatchewan still has borrowing requirements, the Government has made great strides in managing its debt:• Government debt to GDP ratio stands at 17 per cent today, its lowest point in almost 20 years.
• Net debt to GDP ratio is the third lowest in Canada.
• Interest costs as a percentage of provincial revenue have decreased from a high of 19 per cent in 1994, to a 19-year low of seven per cent.
• In the last two years alone – largely thanks to strong oil and gas performance, combined with sound financial management – government debt has been permanently reduced by $446.7 million.
• Government has received 14 credit rating upgrades since 1995, the most recent one coming in August, when Standard & Poor's boosted Saskatchewan's long-term debt ranking to double-A from double-A-minus.
Thomson will leave for Australia today, to encourage Australian bond investors to purchase Province of Saskatchewan securities.
"Saskatchewan is doing well financially, but we will still have to borrow in the future to meet the needs of Saskatchewan people – to replace maturing debt and to fund major capital projects," Thomson said.
"Traditionally, we've primarily used Canadian markets as our source. We've also done business in Europe, but that's become more expensive for non European Union countries," Thomson said. "We need to ensure that when we do have to borrow money, we do it in a very cost effective and competitive market, and right now Australia represents a potential opportunity."
Presently, the Canadian bond market has a preference for 10 or 30-year issues, whereas the Australian market offers more flexible terms.
"In the past, we have issued in U-S dollars, Swiss francs, German deutschemarks and Japanese yen – and are now looking at Australian dollars as another opportunity to expand the investor base for our province's securities," Thomson said.
"This year, we tabled our 13th consecutive balanced budget – which is the longest record for any Canadian province. When we took power in 1991, inheriting a huge debt load, few would have predicted we'd accomplish so much to secure a better future for our children, and our children's children," Thomson said.
"Our government has not only reduced debt – we have also introduced some of the most significant tax reforms in Saskatchewan history," Thomson noted.
"Personal income tax reforms introduced in 2000 now result in $440 million in annual income tax savings for Saskatchewan people. And business tax reductions introduced with this year's budget will ultimately result in $190 million in tax savings annually – to encourage investment and career opportunities for youth."
"Our Government is working for Saskatchewan – to make our province the best place to live, work and raise a family."
Thomson and department officials will meet with investors and money managers in Brisbane, Melbourne and Sydney during their visit to Australia. A list of meetings/contacts is attached.
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For More Information, Contact:
| Lorri Thacyk Finance Regina Phone: (306) 787-6605 Email: lthacyk@finance.gov.sk.ca |