2011-12 MID YEAR REPORT

The government remains on track to balance the provincial budget, despite increased flooding expenses and an uncertain global economy.

The Mid-Year Report anticipates a pre-transfer surplus of $25 million and a balance in the Growth and Financial Security Fund of $694 million at year end.

Overall expenses are expected to be up $246.8 million to $10.926 billion, while revenues are expected to be up by $156.8 million to $10.951 billion, leaving a $25 million surplus. Flooding costs are estimated to be in excess of $240 million, offset by approximately $109 million in federal contributions.

"We are extremely fortunate that we have the resources to respond to a second consecutive year of extensive flooding," Finance Minister Ken Krawetz said. "Our government has ensured we have an appropriate reserve in the Growth and Financial Security Fund and it remains in place to respond to such challenges."

Flooding costs are offset by the current strength in the potash sector. Royalties are expected to exceed earlier estimates by $207 million as a result of higher prices and volumes.

"There are numerous positive activities impacting the Saskatchewan economy, in spite of our challenges with flooding," Krawetz said. "Compared to other provinces, we will post strong economic growth again this year. We are leading the nation in the growth of retail sales and wholesale trade. We are also number one in housing starts, building permits, and business confidence. And last week we learned that Saskatchewan's average weekly earnings are now the second highest in the country. For the first time, they are higher than in Ontario."

Given the extreme uncertainty in the global economy and the risks it presents to Saskatchewan, the government intends to use caution moving forward, Krawetz said.

"We anticipate continued volatility in the global economy in the months ahead. Our government will be mindful of this as we prepare our upcoming budget."

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For more information, contact:

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