SASKATCHEWAN’S ECONOMY DELIVERED RECORD RESULTS

Government pays down $641 million in debt

Today's release of the 2007-08 Public Accounts show Saskatchewan's economic output last year was firing on all cylinders, with a revenue increase of almost $2 billion over the 2007-08 Budget estimate.

Total General Revenue Fund (GRF) revenues came in at $9.8 billion largely due to increases in non-renewable resource revenue and a growing tax base.

"This is good news for everyone in Saskatchewan," Finance Minister Rod Gantefoer said. "A growing economy means more jobs and opportunities, higher wages, and increased provincial revenues - revenues that can be used to improve the quality of life for everyone in Saskatchewan."

The GRF recorded its largest-ever surplus of $641.4 million that will be used to reduce debt. An equal amount ($641.4 million) went to the province's current Growth and Financial Security Fund.

"Together with the $250 million dedicated to debt reduction in the 2008-09 budget, this means the new government has committed almost $900 million in debt in our first seven months in office," Gantefoer said.

Government debt was at $6.8 billion at March 31, 2008, while GRF government total debt-to-GDP (which excludes Crown debt) was 13.4 percent in March 2008, the lowest it has been in over 20 years.

2007-08 GRF Revenue Details:

• $9.8 billion - up nearly $2 billion (25 per cent) from the 2007-08 Budget estimate. This includes:
  • $809.7 million or 53.4 per cent increase in non-renewable resource revenue mainly due to oil and potash, partially offset by a decrease in natural gas. ($2.3 billion total)
  • $628.6 million or 15 per cent increase in taxation revenues with the largest increases recorded for individual income tax, corporation income, and sales tax due to a strong economy. ($4.7 billion total)
  • $324.1 million or 25 per cent increase in federal government transfers reflecting a one-year Equalization payment of $226 million ($0 ongoing) and other one-time targeted funding. ($1.6 billion total)

2007-08 GRF Operating Expense Details:

• $8 billion - up $246.4 million (three per cent) from the 2007-08 Budget estimate. This is offset by $31.8 million in debt servicing savings. The largest spending increases went to the following ministries:
  • Health - $58.2 million or 1.7 per cent higher than budget due largely to establishing a nursing recruitment fund; (Budget: $3,446.1 million; Actual: $3,504.3 million)
  • Corrections, Public Safety and Policing - $44.3 million or 17 per cent higher than budget due to eligible claims under the Provincial Disaster Assistance Program and an increase in inmate bed space capacity; (Budget: $261.1 million; Actual: $305.4 million)
  • Public Service Commission - $22.5 million or 134.4 per cent higher than budget for one-time funding to settle pension claims for non-permanent employees; (Budget: $16.7 million; Actual: $39.2 million)

Growth and Financial Security Fund (GFSF)

Balances from both the Fiscal Stabilization Fund and the Saskatchewan Infrastructure Fund were transferred to the newly created GFSF in May, after legislation was passed this spring. The GFSF has a balance of $1.6 billion, which will be used to support future economic development in Saskatchewan and to provide financial security.

The strong results in 2007-08 are expected to continue into the 2008-09 fiscal year. Premier Brad Wall has advised all government MLAs to consult with Saskatchewan people over the summer months to identify their priorities. The province is also soliciting public feedback on their priorities on the Government of Saskatchewan website.

"With our economy and provincial revenues continuing to grow, our government is working to ensure we share the benefits of growth and improve the quality of life for everyone in Saskatchewan," Gantefoer said.

For the first time, the Public Accounts Volume 1 contains improved accountability through the addition of a Financial Statement Discussion and Analysis (FSD&A). The FSD&A will enhance a readers' understanding of the financial statements by clearly explaining and highlighting information underlying the financial statements.

More information on the 2007-08 Public Accounts can be found at www.finance.gov.sk.ca.

-30-

For more information, contact:

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