Saskatchewan has maintained its enviable position through the first three quarters of this fiscal year, remaining the only province in Canada on track for a balanced budget.
The government's Third Quarter Financial Report, released today, projects the province will finish 2012-13 with a pre-transfer surplus of $8.8 million in its General Revenue Fund (GRF).
"Given the current world economy, preserving a balanced budget is challenging," Finance Minister Ken Krawetz says. "While Saskatchewan's economy is strong, resource revenue is down because of falling prices. This decline is offset somewhat by record investment and revenue from a growing tax base, which has expanded thanks to higher employment and population growth."
GRF expense is now projected to finish the year at $11.39 billion - up $190.4 million or 1.7 per cent from budget, largely due to higher than expected usage of certain government services and unforeseen weather events, like flooding.
The increases include:
$40 million for the Provincial Disaster Assistance Program (up $110 million in total over Budget);
$51 million for Teachers' Pensions and Benefits;
$47 million for AgriStability, AgriInvest and Crop Insurance;
$10 million for snow removal and ice control on provincial highways;
$10 million for increased use of the Research and Development Tax Credit in the 2011 tax year;
$7 million for increased usage of court services, corrections and prosecutions; and
$4 million for increased usage of the Graduate Retention Program.
"These expenses have been offset by expense management savings identified at mid-year and by an increased dividend from Crown Investments Corporation of Saskatchewan (CIC)," Krawetz adds.
"At budget, we expected the Crowns to generate 2012 net income of $346.5 million and that CIC would provide a dividend to the GRF equal to about 90 per cent of this net income, excluding the net income of SaskPower, allowing the corporation to address its long-term infrastructure requirements."
In 2012, CIC Crowns, excluding SaskPower, generated net income of about $135 million more than expected at budget time.
About 90 per cent of this increase - $120 million - will be provided to the GRF.
GRF revenue is now projected to finish the year at $11.40 billion - up $104.2 million or 0.9 per cent from budget, largely due to higher than expected tax revenue and the increased CIC dividend.
Government general public debt is forecast to be $3.8 billion at the end of 2012-13, unchanged from budget and from the end of the previous fiscal year.
The province's Growth and Financial Security Fund is now forecast to finish 2012-13 with a balance of $662.7 million.
"Fiscal responsibility continues to be our foundation, a key part of our Plan For Growth to help keep Saskatchewan moving forward," Krawetz concludes. "Given the volatility of world markets and unforeseen circumstances, we are pleased to be able to maintain a balanced budget."
