Released on June 29, 2007
The continued impressive performance of the Saskatchewan economy last year led to a $293 million General Revenue Fund (GRF) surplus, according to the 2006-07 Public Accounts, Volume 1 released today. This surplus is allocated to permanent debt reduction, which will lead to benefits in the years to come.
"Revenues were higher than anticipated, and this reflects the strength of our robust economy," Finance Minister Pat Atkinson said. "After years of prudent fiscal policy and sound financial management, our government is once again in a position to invest in the future of the people of our province and ensure that our citizens benefit from a fiscal surplus. We have reduced business and provincial sales taxes, and we have also reduced total government debt by $861 million over the last three years. I'm extremely pleased to report that our current debt to GDP ratio, an important factor for all credit rating agencies, is at its lowest level in 20 years."
Revenue
The 2006-07 GRF revenue increased by $916 million over budget, mainly due to increases of:
- $474 million - (12 per cent) in taxation revenues, including $278 million in one-time adjustments for stronger prior years;
- $182 million - (12 per cent) in non-renewable resource revenue, mainly oil. Partially offset by decrease in potash (lower export sales);
- $144 million - (42 per cent) increase in other own-source revenue; and
- $65 million - (5 per cent) increase in transfers from the federal government, mainly related to Bill C-48 (one-time trust funding established by the previous federal government).
Expenses
The 2006-07 GRF operating spending increased by $558 million over budget. Over 75 per cent of this increase was for capital and one-time expenses.
The funding was largely directed toward the following key priority areas:
- $109 million - (18 per cent) increase to Community Resources primarily for affordable housing initiatives;
- $105 million - (40 per cent) increase in additional funding for farmers;
- $85 million - (14 per cent) increase to Advanced Education and Employment, which includes: $73.14 million for post-secondary capital; $15.32 million in approved funding for the Labour Market Strategy; and $6.6 million for the collective agreement costs of the training institutions;
- $72 million - (8 per cent) increase to Learning, mainly for school capital projects across the province and funding the Teachers' Superannuation Plan;
- $33 million - (26 per cent) increase for Corrections and Public Safety, mainly related to financial disaster assistance, costs related to the SGEU strike, and adult corrections; and
- $24 million - (1 per cent) increase to further fund the healthcare system.
"In making decisions, we recognize that a balance must be struck between investing in education and community infrastructure, increasing the skills training initiatives available to our workers, and at the same time addressing the issues of tax reduction and further paying down the provincial debt," Atkinson said.
At Mid-Year, the Saskatchewan Infrastructure Fund (SIF) was created to support public infrastructure. The balance in SIF of $105.1 million is allocated for the Building Communities program ($88 million) and Municipal Infrastructure ($17 million).
Fiscal Stabilization Fund
The Fiscal Stabilization Fund (FSF) balance remains at $887.5 million. The transfer forecast in the 2006-07 Budget was not required, due to the improved financial situation by mid-year.
"The 2006-07 Public Accounts clearly indicate that Saskatchewan is in an enviable financial position," Atkinson said. "We are working hard to ensure that our province remains the best place in Canada to work, live and raise a family. We're believe we're making things better for the people of this province."
More information on the 2006-07 Public Accounts can be found at www.gov.sk.ca/finance.
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For more information, contact:
Debbie Clark
Finance
Regina
Phone: 306-787-8109
Email: dclark@finance.gov.sk.ca