Released on August 20, 2010
Flood Costs Offset by Higher Resource Revenue
Deputy Premier and Finance Minister Ken Krawetz today said Saskatchewan's provincial budget remains on track in spite of additional costs incurred by an unprecedented summer of storms.
Krawetz released the First Quarter Financial Report showing that the province is expecting an additional $161.7 million in expenses this year, primarily caused by compensation for wide-spread flood damages.
These unexpected expenses will be offset by increased revenue of $194.9 million, mainly due to higher-than-budgeted Crown land sales as the result of increased interest in Saskatchewan's oil industry.
"The bottom line is - our budget remains on track in spite of some of the worst summer weather our province has ever seen," Krawetz said. "The overall strength of our province's economy has enabled our government to respond to those whose property was damaged by flooding and to those farm families who were unable to get a crop in this year."
On the expense side, there is a $144 million increase in the Agriculture budget to cover the province's share of the $30 per acre payment for unseeded farmland and an additional $18.5 million for higher claims through the Provincial Disaster Assistance Program (PDAP).
On the revenue side, the province expects to see an overall increase of $215.2 million in non-renewable resource revenue, led by an increase of $252.7 million in Crown land sales, which is partially offset by small declines in potash, oil and natural gas. Potash revenue is forecast to be $16 million below budget despite higher prices and sales as the result of increased capital investment in the potash industry.
Krawetz said that despite the significant challenges caused by the flooding, Saskatchewan's overall economy remains strong.
"Saskatchewan has the lowest unemployment rate in the country and we are up over 4,700 new jobs through the first seven months of the year," Krawetz said. "Retail sales, housing starts, exports and average earnings are up over last year and there are 16,000 more people living in Saskatchewan than a year ago. Because of this growth, Saskatchewan has been able to absorb the extra costs of flooding without taking any additional money from the Growth and Financial Security Fund, but it's good to know it's there if we need it."
The province is now forecast to finish the 2010-11 fiscal year with nearly $800 million in the GFSF.
-30-
For more information, contact:
Randy Burton
Finance
Regina
Phone: 306-787-6578
Email: randy.burton@sk.gov.ca
Cell: 306-530-2049