News Release - November 25, 2010
PROVINCE'S FISCAL POSITION IMPROVES AT MID-YEAR
Finance Minister Ken Krawetz today said the province's financial situation is improving and the 2010-11 budget is on track to finish the year with a $68.5 million surplus.
"The key factor in our improved results is the increased strength in corporate profits," Krawetz said. "Our Corporation Income Tax revenues have increased significantly, which has offset some additional expenses related to flooding and other areas."
The Mid-Year report shows the province is expected to finish the year with a pre-transfer surplus of $137 million. Half of that surplus - $68.5 million - will be moved into the Growth and Financial Security Fund, which will put the fund balance at $1.02 billion by year-end, up $516 million from budget.
Overall, revenue is forecasted to finish the year at $10.68 billion, up $726.2 million from budget. Expense is forecasted to come in at $10.54 billion, up $415 million from budget.
"The increased expense is driven mainly by the government's decision to fully fund the Children's Hospital in Saskatoon for $195 million and the unexpected costs of flood mitigation and relief," Krawetz said.
Both oil and potash revenues are showing upside strength, resulting in a $100.7 million increase in non-renewable resource revenue from First Quarter. Potash sales volumes are expected to more than double in 2010 to 8.8 million tonnes, from last year's low of 3.7 million tonnes.
The biggest revenue improvements come in Corporation Income Tax revenue, which is expected to come in $340 million higher than expected and in Crown land sales, which are up by $252.7 million from budget. These gains are offset somewhat by lower Individual Income Tax revenue, a reflection of reduced 2009 investment income experienced in Saskatchewan and across the country.
"We're encouraged by the improvement in our fiscal position, but we have to be prudent moving forward," Krawetz said. "Growth in Canada and the U.S. is slowing, and we must retain the flexibility to deal with unexpected downturns."
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