News Release - September 5, 2007
PROVINCE REDUCES GOVERNMENT DEBT BY $400 MILLION
On September 6, the Government of Saskatchewan will pay $400 million toward the debt of the province. This brings the total debt paydown since 2004 to $1.2 billion.
Total debt of the province, (which includes government and Crown corporation debt) is forecast to be $10.4 billion at the end of 2007-08.
Government debt-to-GDP, at 14.7 per cent, is at its lowest point in more than 20 years.
"When we released the 2006-07 Public Accounts in June, we said the $293 million surplus from last year would go toward permanent debt reduction," Finance Minister Pat Atkinson said. "We said we'd do it, and we've done it. We've also put $158 million of the one-time federal Equalization entitlement received in March toward debt reduction. After offsets, including increased capital expenses, our total debt paydown will be $400 million this year. This means that since 2004, we will have reduced government debt by $1.2 billion."
"The debt-to-GDP ratio is a very important indicator of financial health - it's one of the key indicators credit rating agencies look at when determining their rankings," Atkinson said. "We have seen consistent improvement in our rankings, receiving 16 credit rating upgrades since 1995."
Saskatchewan currently enjoys an Aa1 credit ranking from Moody's Investor Service, an AA ranking from Standard & Poor's, and an AA(low) ranking from Dominion Bond Rating Service.
The 2007-08 Budget originally projected government borrowing of $563 million, primarily to replace maturing debt. Instead, the province has been able to direct the surplus from 2006-07 and a portion of the one-time federal Equalization money to permanently retire $400 million, including debt that matured this week.
"We are committed to paying down debt, at the same time as being mindful of the needs and priorities of Saskatchewan people," Atkinson said. "We will continue on our path of strong financial management."
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