THIRD QUARTER FISCAL RESULTS IN

Strong growth in the oil and gas sectors is helping offset the dramatic impact of drought and BSE.

Finance Minister Harry Van Mulligen released the 2003-04 Third Quarter Report this morning, which shows both total revenue and spending are up. Revenue is up $76.9 million from budget, and operating spending increased by $147.8 million.

"Saskatchewan's economy, except for agriculture, is performing extremely well," Van Mulligen said. "The Third Quarter Report also shows that interest costs on the public debt were down $30 million. However, drought and the BSE crisis are negatively affecting our bottom line."

Pressures in funding agricultural support programs and forest fire fighting have driven up operating spending, which increased $147.8 million from budget. Saskatchewan Agricultural Food and Rural Revitalization is $130.6 million over budget, mainly due to the need to accrue payments under the new Canadian Agricultural Net Income Stabilization program, which will be paid in 2004-05, and new programs for BSE. Saskatchewan Environment is up $40.5 million over budget due to forest fire management costs incurred during the past season.

To maintain a balanced budget, $463.3 million will be transferred from the Fiscal Stabilization Fund (FSF). This is an increase of $70.9 million from budget.

The good news on the revenue side is primarily due to increases in oil and gas prices, which led to higher than expected own-source revenues. Own-source revenue – the money generated by economic activity within Saskatchewan – is now projected to be $273.6 million higher than forecast in the provincial budget. However, when these revenue increases are factored in next year, there will likely be a subsequent decrease in equalization in 2004-05.

"This latest update of our current year's finances confirms what we learned at the mid-year point -- we will balance the budget this year with the aid of a large withdrawal from our Fiscal Stabilization Fund," Van Mulligen said. "We are still faced with difficult decisions as we align revenues and expenditures in carefully developing our 2004-05 budget."

The Third Quarter Report can be accessed at www.gov.sk.ca/finance.

-30-

For More Information, Contact:

Debbie Clark Finance Regina Phone: (306) 787-6605