SASKATCHEWAN’S FINANCES REMAIN STRONG AND DEBT REDUCTION IS ON TRACK

Released on November 12, 2008

The province's 2008-09 Mid-Year Report released today shows Saskatchewan's position remains strong. The Saskatchewan Government is still on track to reduce the provincial debt by $2.7 billion, or by about 40 per cent this year.

Despite the recent drop in oil prices, provincial revenue shows continued growth in Saskatchewan's tax base, potash revenue and Crown land sales.

"While an economic crisis is gripping other regions of Canada, the United States and countries around the world, Saskatchewan's economy remains strong and we are well-positioned to meet the challenges we might face in these uncertain times," Finance Minister Rod Gantefoer said. "Our employment numbers are solid, our population numbers are growing, and we are experiencing high commodity prices. We are expected to lead the country in growth this year and next."

After providing $334 million for the tax reduction package announced in October, overall revenue is only $203.2 million below the first quarter forecast. This mid-year revenue forecast is $2.9 billion over budget for a total revenue forecast of $12.26 billion for 2008-09.

"The Mid-Year Report shows our revenues remain strong, our projections are on track, and our plans to share the wealth with all Saskatchewan people, as announced by Premier Brad Wall in October, are affordable and sustainable," Gantefoer said.

Highlights from the Premier's October 21 announcement include:

• the largest single-year income tax reduction in Saskatchewan history ($334 million in tax savings for Saskatchewan people in 2008-09, and $300 million in tax savings annually);
• the largest amount of debt reduction in Saskatchewan history; a reduction of almost 40 per cent to $4.2 billion;
• the largest investment in infrastructure in Saskatchewan history ($1.5 billion for 2009-10); and
• maintaining a significant cash balance of almost $2 billion in the Growth and Financial Security Fund (GFSF), as a fiscal insurance policy.

The Mid-Year Report forecasts operating expenses up $531.9 million over budget, mainly due to:

• A $240 million transfer to Crown Investments Corporation of Saskatchewan for federal carbon capture flow-through funding;
• $106.1 million increase for Advanced Education, Employment and Labour, primarily for the Academic Health Sciences Centre; and
• $80 million increase for Health for increased funding to regional health authorities.

"We have shared the prosperity with Saskatchewan people this fall through broad-based tax relief, increases to the Low-Income Tax Credit, and significant program enhancements for seniors and individuals with disabilities," Gantefoer said. "We're also paying down debt and boosting our infrastructure investment to support a strong Saskatchewan. Our Government will continue to manage Saskatchewan's finances in a prudent and fiscally responsible manner."

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For more information, contact:

Vanessa Beaupre
Finance
Regina
Phone: 306-787-8109
Email: vanessa.beaupre@gov.sk.ca