2008-09 PUBLIC ACCOUNTS SHOW STELLAR YEAR FOR SASKATCHEWAN

Released on June 25, 2009

Debt, Interest Costs at Lowest Levels in 20 Years

With record revenues and the highest-ever surplus in provincial history, Saskatchewan enjoyed exceptional financial circumstances last year, according to the 2008-09 Public Accounts released today.

Increased revenues allowed the government to reduce the provincial debt and interest costs to their lowest levels in 20 years.

Finance Minister Rod Gantefoer said the 2008-09 Public Accounts show Saskatchewan is in excellent financial shape, largely due to resource revenues and strong economic activity.

"We have experienced a strong year and Saskatchewan is expected to continue leading the nation in economic growth," Gantefoer said. "This was our government's first budget - our ‘Ready for Growth' budget - and we wound up with more revenue growth than anyone anticipated."

The Public Accounts show a General Revenue Fund (GRF) surplus of $2.39 billion - the highest surplus in Saskatchewan history.

GRF revenues totalled $12.33 billion, nearly $3 billion or 31.6 per cent higher than the 2008-09 Budget estimate, primarily due to higher resource revenues, as well as higher sales tax revenue:

• Potash $1.36 billion (up $1.01 billion)
• Crown land sales $928.25 million (up $735.75 million)
• Oil $1.62 billion (up $561.47 million)
• Sales tax revenue $1.11 billion (up $190.63 million)

GRF expenses totalled $10.36 billion, a 13.6 per cent increase over the 2008-09 Budget estimate, largely due to accelerated spending for infrastructure projects across Saskatchewan.

"Our good fortune last year allowed the government to address the priorities of Saskatchewan people through infrastructure spending, debt reduction and significant tax relief," Gantefoer said.

The government lowered income tax by over $300 million dollars last year and committed an unprecedented $1.5 billion to construction of infrastructure projects.

As well, the government used the unprecedented increase in revenue to pay down debt by $2.68 billion or almost 40 per cent. This lowered government debt in the GRF to $4.15 billion - the lowest level since 1988-89. Net interest costs paid on debt were cut to $332 million - also the lowest level since 1988-89. The government general debt-to-GDP ratio stood at 6.2 per cent at March 31, 2009 - the lowest level since March 31, 1984.

The Summary Financial Statements (SFS) - which include the financial results of the GRF plus Crown corporations, agencies, boards and commissions - show a surplus of $2.97 billion for 2008-09, well exceeding the estimated budget deficit of $133 million.

There is now an accumulated surplus of $1.4 billion in the SFS - the first time there has been an accumulated surplus in the 18 years these statements have been published.

"In other words, for the first time, the government balance sheet has a positive net value - our overall assets are greater than our liabilities," Gantefoer said. "This is a major accomplishment for Saskatchewan to post a surplus in both sets of statements during a time of global economic uncertainty. At a time when most governments are racking up more debt, our government is paying down debt."

The government has maintained a $1.2 billion balance in the Growth and Financial Security Fund to act as a financial cushion in uncertain economic times.

"While Saskatchewan is better positioned than most jurisdictions, we are not immune to what's happening worldwide," Gantefoer said. "It is important to have that cushion, in case we face an economic downturn."

More information on the 2008-09 Public Accounts Vol. 1 can be found in the attached materials, or at www.finance.gov.sk.ca.

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For more information, contact:

Vanessa Gooliaff Beaupré,
Finance
Regina
Phone: 306-787-8109