Released on March 2, 2010
Revenues Increase Since Mid-year, Despite Continued Potash Decline
Saskatchewan's fiscal position has found some traction in the latest financial update as the province experienced an overall revenue improvement since mid-year.
The Third Quarter Financial Report released today shows revenue is up since mid-year due to higher oil revenue, Crown Land sales and additional taxes generated from stronger-than-anticipated income growth.
This increase has more than offset further declines in potash revenue, which saw an unprecedented decline in sales volumes in 2009.
The potash forecast is now negative. At the end of March 2009, the potash industry made installment payments equal to 25 per cent of their full calendar year profit estimates. These estimates were too optimistic and, as a result, these payments have to be refunded. The refunds will exceed revenues collected this year by $203.9 million.
However, the net result shows revenue at third quarter is forecast to be $153.8 million (1.6 per cent) higher than at mid-year, thanks mainly to increases in oil and tax revenues.
"Saskatchewan's financial picture is improving after we experienced a significant revenue decline at the mid-way mark last November," Finance Minister Rod Gantefoer said. "This is the first time we have seen potash drop to a negative figure, but I'm pleased our diverse economy has managed to lessen the impact."
Debt levels remained unchanged at $4.2 billion, and the third quarter report projects a General Revenue Fund surplus of $424.5 million, also unchanged and requiring a lesser drawdown from the Growth and Financial Security Fund (GFSF) than previously forecast at mid-year. The year-end GFSF balance is now projected at $705 million, an increase of $54.2 million since mid-year.
Expenses are anticipated to increase by $99.6 million from mid-year to address specific priorities and pressures mainly at Health, Municipal Affairs, the Public Service Commission and Social Services.
These increases were partially offset by decreases at the ministries of Agriculture, Highways and Infrastructure, Finance and a reduction in total debt servicing costs.
"Our government will continue to meet the fiscal challenges we currently face in a prudent and responsible manner as we prepare for this month's Budget," Gantefoer said. "By controlling spending and making responsible choices, our government will deliver a balanced, forward-looking budget."
Gantefoer has announced that Budget 2010-11 will be delivered on March 24, 2010.
Copies of the Third Quarter Financial Report are available online at www.finance.gov.sk.ca.
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For more information, contact:
Vanessa Beaupre
Finance
Regina
Phone: 787-8109
Email: vanessa.beaupre@gov.sk.ca