THIRD QUARTER REPORT SHOWS PROVINCE ON TRACK FOR BALANCED BUDGET

The province will maintain a balanced budget in 2011-12, despite the challenges created by a second consecutive year of flooding.

The total costs of flooding in Saskatchewan this year are expected to reach $360 million in the 2011-12 fiscal year. This will be offset by $193 million in federal cost-sharing contributions and a $120 million special dividend from Crown Investments Corporation.

This reflects higher than expected earnings at SaskPower in 2011, while still allowing SaskPower to retain the full $118.6 million budgeted for earnings in 2011. SaskPower enjoyed higher than expected earnings in 2011, due partly to higher water levels resulting in increased hydropower generation.

General Revenue Fund (GRF) expense is up $331 million from budget, reflecting the unexpected flooding costs, the teachers' settlement, an increase for teachers' pensions and other utilization pressures. Net savings in other areas partially offset these increases.

At third quarter, GRF revenue is up $272 million from budget. The increase reflects strength in many sectors and shows higher revenue from oil, potash, PST and Fuel Tax. These increases are offset by lower-than-expected Crown land sales and Corporation Income Tax.

The budget is on track to finish the year with a pre-transfer surplus of $56 million and a balance of $709 million in the Growth and Financial Security Fund. Despite the challenges this year, government debt reduction will proceed as budgeted.

"Last year's floods affected many Saskatchewan families, damaged many kilometres of highways and flooded thousands of acres of farmland," Finance Minister Ken Krawetz said. "We were fortunate to have access to the resources required to provide assistance to those in need.

"We have met severe challenges with flooding this year and last. In spite of that, we will finish the year with a balanced budget, lower debt and more than $700 million in the Growth and Financial Security Fund thanks to the strength of our economy. That's the Saskatchewan Advantage."

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For more information, contact:

Randy Burton
Finance
Regina
Phone: 306-787-6578
Email: Randy.Burton@gov.sk.ca