The Honourable Donna Harpauer Minister of Finance
SASKATCHEWAN PROVINCIAL BUDGET 19-20 THE RIGHT BALANCE
15611c1 Budget Cover 2019-20-FA.indd 1 2019-03-04 3:35 PM
MINISTER’S MESSAGE
I am pleased to table the 2019-20 Budget and supporting documents for public discussion and review.
FISCAL PICTURE The 2019-20 Budget is balanced, the fulfilment of our Government’s three-year fiscal plan. A surplus of $34.4 million is projected for 2019-20.
Revenue is forecast at $15.03 billion, up about $782 million, or 5.5 per cent, from last year’s budget.
Expense is forecast at $14.99 billion, up $382 million, or 2.6 per cent from last year.
THE RIGHT BALANCE The 2019-20 Budget provides the right balance for Saskatchewan.
It will help strengthen the economy and contains no tax increases.
It balances careful spending with priority investments for Saskatchewan people, in health care, classrooms, and for seniors and vulnerable families. This Budget includes investment into needed infrastructure for a growing province.
Balancing this year’s Budget was made possible by our Government’s commitment to address challenges and to chart a course that ensures a bright future for our children and generations to come.
In the years ahead, finding the right balance will continue to be the foundation of our Government’s sustainable fiscal plan.
Honourable Donna Harpauer Minister of Finance
TABLE OF CONTENTS
MINISTER’S MESSAGE
GOVERNMENT DIRECTION FOR 2019-20 The Right Balance ...... 6
SASKATCHEWAN BUILDS CAPITAL PLAN ...... 18
TECHNICAL PAPERS The Saskatchewan Economy ...... 27 2019-20 Financial Outlook ...... 37 2019-20 Borrowing and Debt ...... 48 2019-20 Revenue Initiatives ...... 53 Saskatchewan’s Tax Expenditures ...... 55 2019 Intercity Comparison of Taxes and Utilities ...... 59 2018-19 Budget Update Third Quarter ...... 63
BUDGET FINANCIAL TABLES Budget ...... 68 Statement of Accumulated Deficit ...... 69 Statement of Change in Net Debt ...... 69 Schedule of Pension Liabilities ...... 70 Schedule of Capital Assets ...... 70 Schedule of Public Debt ...... 71 Schedule of Revenue ...... 72 Glossary of Financial Terms ...... 73
SASKATCHEWAN PROVINCIAL BUDGET 19-20
GOVERNMENT DIRECTION FOR 2019-20 6 Budget 2019-20 and impacted the province’s oil andmining downturn intheresource sectorthatbegan in2014 of decisionstoaddress adeep,persistentglobal Saskatchewan’s balancedbudgetistheoutcome revenue base. on volatileresource revenue toastronger, broadened management, alongwithashiftawayfrom reliance the result ofcareful anddisciplinedexpense It istheculminationofathree-year fiscalplan.Itis Saskatchewan’s budgetisbalanced. THE RIGHTBALANCE Government Directionfor2019-20: with investmentintohealthcare, supportfor This Budgetbalancescarefully managedspending the rightbalanceforSaskatchewan. The 2019-20Budgetisabalancedbudgetandit raise afamilyandtobuildlife. to work,startabusiness,getaneducation, continues tobethebestplaceinCanada–live, strong andsustainablefiscalplanasSaskatchewan Budget 2019-20isabalancedbudget,delivering and makelifeaffordable forSaskatchewanpeople. and it’s therightbalancetostrengthen oureconomy This Budgetcontainsnonewtaxesortaxincreases, Saskatchewan. balance forinvestmentinbothurbanandrural for agrowing province, anditdelivers the right This Budgetinvestsinmuchneededinfrastructure future. lives oftheprovince’s people,todayandintothe for Saskatchewan’s classrooms tohelpimprove the seniors, supportforvulnerablefamiliesandfunding
for itspeople. different course of continueddeficits,Saskatchewancharted a or theirownuniquechallengeshavechosenapath While somejurisdictionssimilarlyimpactedbythese government revenue. industries, whichinturnsignificantlyreduced an increase ofmore than160,000 peoplesince2007. The province’s populationismore than1.16million, to grow. Balance isimportant becauseSaskatchewancontinues budget notjustthisyear, butalsointheyearsahead. sustainable fiscalpaththatwillensure abalanced The 2019-20BudgetsetsSaskatchewanona 2019-20 Budget. Saskatchewan people,isanimportant part ofthe safer highwaysandkeymunicipalinfrastructure for build hospitalsandlong-termcare facilities,schools, Investment through Government’s capitalplanto and individualswhoare most vulnerable. health care, toseniorsandfor thosechildren, families while providing neededsupport toclassrooms, to keeping taxeslowandcarefully managingspending, The 2019-20Budgetstrikestherightbalanceby strong. our exports andotheraspectsofthe economyare Agriculture, themanufacturing sector, thevalueof have helpedourminingandoilgassectors. have recovered somewhatfrom thelowsofpastyears, Higher averagepricesforpotashandoilthat
–
onethatprovides abrightfuture
Budget 2019-20 7
New personal income tax credits are being introduced are New personal income tax credits and volunteer emergency for volunteer firefighters who serve selflessly to medical first responders when people and respond lives and property, protect need them most. safety at intersections, the first year of improve To a multi-year strategy is being funded in this Budget. families access the support they need. families access the support in will increase Funding to Saskatchewan classrooms significant capital dollars to are this Budget. There to consolidate existing schools plan major projects Moose Jaw and and build new facilities in Regina and a school in Saskatoon. Capital investment to replace schools in is continuing for the construction of new Rosthern and Weyburn. in social In this Budget, substantial investments services that help services will improve and assistance for foster support more and provide at-risk children, families, people with intellectual disabilities, the Income for Disability (SAID) Saskatchewan Assured and to those in communities who provide program our most vulnerable. for daily care direct, bus accident the tragic Humboldt Broncos Last year, of safety and into sharp focus the importance brought who serve our province of volunteer first responders in times of need. unique and important facility is just part of the is just part facility unique and important significant commitment to improve Government’s the province. mental health services across mental health includes increased This commitment to at SHNB, as well as dedicated operational funding health and addictions funding for mental increased access to funding to improve services, and increased mental health supports. year for Building on an initiative announced last autism, in this Budget the Autism with children for each Individualized Funding benefit is increasing and their child under the age of six, helping children
nurses and other health professionals to provide the to provide nurses and other health professionals children. for Saskatchewan’s best care Just two weeks ago, the Government opened the new (SHNB). This Battleford Saskatchewan Hospital North hospital in Weyburn, a needed health care facility in a needed health care hospital in Weyburn, that southern Saskatchewan city. Hospital is on schedule The Jim Pattison Children’s to open in Saskatoon in the fall, and this Budget operational dollars for doctors, includes increased governments are working together to secure federal working together to secure governments are to ensure which is important funding for this project, quality health services for the people of Prince Albert and the north. This Budget also includes investment to plan a new need as soon as possible. The Budget includes funding to advance in Hospital design of a new Victoria preconstruction and municipal The provincial Prince Albert. There is also an increase in home care support to support in home care an increase is also There the through help people stay safely in their homes Budget increases This strategy. Connected Care to assist people funding for the First Link program help they newly diagnosed with dementia get the This Budget continues to improve care for seniors, care This Budget continues to improve Pioneers the Northland with investment to replace Lodge in Meadow Lake, fulfilling Government’s facilities in 13 long-term care commitment to replace the province. As part of this Budget, a new municipal revenue of this Budget, a new municipal As part sharing will in place and revenue sharing formula is all rural, urban and northern for increase municipalities. businesses, and to build a better life because businesses, and to of opportunity. Saskatchewan is a place of compassion. Its is also a place This province is in all of its people. strength People come here to live, to raise families, to start to live, to People come here 8 Budget 2019-20 and 2.4percentin2020,or3.6overthe Real GDPisexpectedtogrow by1.2percentin2019 relatively strong growth oftheprevious year. grow by1.0percentin2018 2.2 percentin2017andtheeconomyisexpectedto Saskatchewan postedreal GDP growth of Saskatchewan’s economyisgrowing stronger. A GROWINGECONOMY life affordable. Saskatchewan peoplewhilekeepingtaxeslowand for Saskatchewan, investinginimportant services The 2019-20Budgetistherightbalancefor violence anddrug-impaired driving. communities withincreased fundingtocombatgang The Budgetalsoprotects Saskatchewanpeopleand 1,000 kilometres ofSaskatchewanhighways. The Budgetalsoprovides fundingtoimprove almost provincial highways. reduce thefrequency andseverityofcollisionson New fundingisalsoinplaceforaninitiativetohelp SASKATCHEWAN GDP
Sources: Billions of Dollars 100 60 70 80 90 0 Statistics Canada,Ministry ofFinance 2012
2013
2014 Price Collapse – Impact ofOil growth uponthe 2015
2016
Nominal 2017
2018 By 2022,itisanticipatedjobgrowth willbeinthe month in2018. 9,000 newjobsinFebruaryof2019overthesame are showingstrong year-over-year growth, with 3,500 jobsin2019.Recentlabourforce statistics 2018, andemploymentisexpectedtoincrease by Saskatchewan’s economyadded2,400newjobsin experiencing jobgrowth aswell. With astrengthening economy, Saskatchewanis for thetwoyearscombined. of privatesectorforecast of3.5percentGDPgrowth next twoyears,whichalignscloselywithanaverage investment. prices willleadtoincreased production and United States,butby2020itisexpectedhigheroil restrained abilitytomoveoil marketsbeyondthe In 2019theindustryfaceschallenges,includinga 0.9 percentincrease indrilling in2018. Higher averageoilpricesresulted inaslight 5,000 jobs-per-year range. Real 2019 2020
2021 2022
2023
Budget 2019-20 9
The 2019-20 Budget provides increased support in support increased The 2019-20 Budget provides in health, social almost every expense category, of persons and services and assistance, protection the K-12 and post-secondary education property, community development, sectors, agriculture, and and natural resources environment transportation. projected surplus of $34.4 million. Government’s projected unchanged in to remain operating debt is forecast 2019-20. for A higher surplus of $49 million is projected $84 million 2020-21, $72 million for 2021-22, and in 2022-23. at $15.03 billion in the Revenue is forecast or 2019-20 Budget, up about $782 million, million, budget and $695 last year’s 5.5 per cent, from quarter third or 4.8 per cent, higher than the 2018-19 forecast. over last year is in expected revenue The increase higher resource tax revenue, attributable to growing Government and higher net income from revenue, Business Enterprises. in the Expense of $14.99 billion is projected year by the previous 2019-20 Budget, up from $382 million, or 2.6 per cent, and up $281 million, or forecast. quarter the 2018-19 third 1.9 per cent, from that pushes water into the reservoir to increase the reservoir that pushes water into production. taxes and royalty Combined with competitive this continue to incentives like targeted structures, economy. in Saskatchewan’s growth support is provided detailed economic information (More Economy technical paper in The Saskatchewan beginning on page 27.) PICTURE FISCAL 2019-20 Budget is balanced, with a Saskatchewan’s
Metal Ores & Metal Ores Non-metallic Minerals: 20.1%
Farm, Fishing, Intermediate Food 42.4% Products:
Others: 8.7%
28.7%
Energy Source: Statistics Canada Statistics Source: Products: INTERNATIONAL GOODS EXPORTS IN 2018 GOODS INTERNATIONAL COMPOSITION OF SASKATCHEWAN COMPOSITION OF SASKATCHEWAN economy through incentives like the recently economy through Development Program. Waterflood introduced or helps companies with converted The program the costs of newly drilled injection wells offset technique a secondary oil recovery waterflooding, Saskatchewan’s economy continues to show Saskatchewan’s and Government continues to help the resilience, $31.1 billion in 2018, up 11.3 per cent from 2017. from $31.1 billion in 2018, up 11.3 per cent $17.9 billion a record Manufacturing sales reached 2017. in 2018, up 11.1 per cent from manufacturing sales were strong in 2018. Wholesale strong manufacturing sales were the previous trade was up 4.2 per cent in 2018 over year. reached exports The value of Saskatchewan’s Crop production totaled 35.4 million tonnes in 2018, totaled 35.4 million tonnes production Crop 2017. It was the of 1.5 per cent over an increase history and in Saskatchewan’s crop third-largest is expected in 2019. similar production and Wholesale trade, international exports, Potash sales are forecast to have increased by to have increased forecast Potash sales are million tonnes in 2018, due 13.3 per cent to 13.8 outlook is near-term global demand. The to strong for in sales projected increases positive as well, with years. 2019 and in subsequent 10 Budget 2019-20 Government helping makelifemore affordable for new taxcredits for volunteersare anotherexample of will beabletoclaima$3,000 taxcredit amount.These inayear with atleast200hoursofvolunteer service Beginning withthe2020taxation year, individuals need itmost. protect andhelpSaskatchewanpeoplewhenthey emergency medicalfirstresponders to whoserve credits forvolunteerfirefighters andvolunteer This Budgetannouncesnew, non-refundable tax Income Tax Credit isfactored in. than in2007,whentheenhancedSaskatchewanLow- $767 lesscombinedprovincial incomeandsalestax In 2019,anindividualwithincomeof$40,000pays income andsalestaxin2019compared to2007. income pays$1,921lessincombinedprovincial A Saskatchewanfamilyoffourwith$100,000intotal once theircombinedincomereached just$26,150. a familyoffourbeganpayingprovincial incometax income. In2007,thatthreshold wasmuchlower, as income taxontheirfirst$51,600ofcombined A Saskatchewanfamilyoffourpaysnoprovincial annual incometaxsavingstoSaskatchewanpeople. the pastdecadeare providing over$610millionin income taxroll. PITreductions introduced over have removed 112,000people from theProvince’s Since 2007,PersonalIncomeTax (PIT)exemptions increases andnonewtaxesin thisBudget. corporate taxesinthecountry, andthere are notax Our province hasamongthelowestpersonaland all Saskatchewanpeople. keeping taxeslowwhileproviding for qualityservices The 2019-20Budgetstrikestherightbalanceby MAKING LIFEMORE AFFORDABLE Financial Outlook,beginningonpage37.) (More informationisavailableinthe2019-20
Government hasworkedtomodernizeandsimplify matching theratesofotherwesternprovinces. continues tobeamongthelowestincountry, Saskatchewan’s 12percentcorporateincometaxrate two percentsmallbusinesstaxrate. which businessespaytaxatthemuchlower $600,000 business incomethreshold inthecountryat Saskatchewan hasthemostcompetitivesmall In termsoftaxcompetitivenessforbusinesses, work ofemergency responders. Saskatchewan people,whilerecognizing thevaluable Saskatchewan. Total investmentinto mentalhealth strong commitmenttoaddress mental healthin In thisBudget,Government is demonstratingits the needsofSaskatchewanpeople. 2019-20 Budget,balancedwith investmentstomeet Government continuestomanagespendinginthe INVESTING INPEOPLE in the2019-20RevenueInitiativessection.) (More informationisincludedonpages53and54 by eliminatingthesebasepaymentdeductions. simplify thecalculationofPotashProduction Tax To address thissituation,measures willbetakento been eroded bycurrently permitteddeductions. flat paymentpertonneofpotashsales,hasgradually component, whichissupposedtoprovide asimple The PotashProduction Tax’s basepayment balanced return fortheirpotash. ensure thepeopleofSaskatchewan receive afairand Effective April1,2019,measures are beingtakento value. programs andtheinfrastructure Saskatchewanpeople balanced bytheneedtoinvestinpriorityservices, the taxsystemandtoimprove revenue stability,
– thatis,theamountofincomeupto
Budget 2019-20 11
and
in 2019-20 15.0 is $10.6 billion in this Budget 2019-20
health, education
Health – 14.7
14.3
2017-18 14.8 All Other an increase of more than 67 per cent or of more an increase
– 15.2 2015-16 social services and assistance Budget priorities $4.3 billion since 2007-08. These three account for 71 per cent of overall government expense. investment in Government’s of to be $5.89 billion, an increase is projected budget. year’s $123 million or 2.1 per cent over last The 2019-20 Budget includes $211 million in The 2019-20 Budget will benefit Indigenous investment that targeted a and organizations, communities, businesses over 2018-19. 4.7 per cent increase million in gaming agreement This includes $72.4 and and Métis organizations transfers to First Nations Nations and Métis community- $45 million to First deliver individual and that based organizations community supports. commitment to the priorities of Government’s Saskatchewan people is clear. areas Investment into three 14.0
13.8
2013-14
14.3
13.7 2011-12 Health/Education/Social Services 13.3
12.5 2009-10 11.3 9.9 2007-08
8 6 4 2 0
16 14 12 10 Billions of Dollars of Billions Note: Boards of Education did not become part of the Government Reporting Entity until 2009-10. Accounts Source: Saskatchewan Budget, Public $25.4 million or 6.2 per cent from last year. $25.4 million or 6.2 per cent from increased by $124.3 million, or 97.7 per cent. increased funding sharing, infrastructure Including revenue $437.1 million and a number of grants and initiatives, multiple to municipalities from is being provided of an increase Government ministries in this Budget, Province with the municipal sector, is now based on the municipal sector, with Province of one by three-quarters generated revenue (PST). Sales Tax point of the Provincial percentage has Since 2007-08, Municipal Revenue Sharing to invest in local priorities. to invest in local priorities. $251.6 million of Municipal This Budget includes over last Revenue Sharing, a $10.5 million increase rural, urban and northern for Saskatchewan’s year, by the municipalities. A new formula, developed services, support and facilities, from a number of facilities, from services, and support is $417.7 million in government, ministries across 2018-19. up 3.7 per cent from the 2019-20 Budget, municipalities also ensures The 2019-20 Budget of unconditional funding a consistent source receive SPENDING BY THEME SPENDING BY 12 Budget 2019-20 increase of$668,000,totheAlzheimerSocietyfor The 2019-20Budgetprovides $1.1million,an based outreach services. other providers todeliverbothon-siteandhome- of physicians,nurses,therapists,socialworkersand The clinicsoffer co-located,interdisciplinary teams adults withchronic andcomplexconditions. Regina andSaskatoonare operating,focusedonolder as longpossible.Underthestrategy, newclinicsin Care strategytohelppeoplesafelystayintheirhomes $1.6 millionoverlastyear, tosupport theConnected This Budgetincludes$20.6million,anincrease of goal of7.0percent. in theMinistryofHealthbudget,approaching the Health. Thisrepresents 6.3percentoftotalspending mental healthcare initiativesthrough theMinistryof In total,thisBudgetprovides $349.4 millionfor the province. help address andimprove in mentalhealthservices opened SaskatchewanHospitalNorth Battleford, to support, mainlyfordoctorsandnurses attherecently Thisincludes$13.7millionin enhanced services. Budget toimprove mentalhealth supports and initiatives isincreasing by$29.8 millioninthis Spending ontargeted mentalhealthandaddictions which willopeninSaskatoonthisfall. children attheJimPattisonChildren’s Hospital, nurses andstaff toprovide thebestpossiblecare for This includesa$23millionincrease fordoctors, $113.3 millionincrease or3.2percentfrom 2018-19. the SaskatchewanHealthAuthorityto$3.6billion,a The 2019-20Budgetincreases operatingfundingto Quality Counciland3sHealth. Saskatchewan CancerAgency, eHealth,theHealth Health, theSaskatchewanHealthAuthority, the This includesspendingthrough theMinistryof
Aid FundandtheTeachers’ SuperannuationPlan. Certification Commission,theSaskatchewanStudent Colleges, theSaskatchewanApprenticeship andTrade Education, SaskatchewanPolytechnic,Regional Immigration andCareer Training, theBoards of Ministries ofAdvancedEducation,and Education includesbudgetedspendingthrough the $19.2 million,or0.6percent,from lastyear’s budget. Education soon aspossible. diagnosed withdementiagetthehelptheyneedas First Linkprogram, designedtohelppeoplenewly to graduateswholiveandwork inSaskatchewan. which provides upto$20,000inincometaxcredits studies through theGraduateRetentionProgram, Students willcontinuetoreceive benefitsaftertheir financial assistancetomore than18,000students. which willprovide repayable andnon-repayable program by$4.7million,toatotalof$26.3 This Budgetincreases fundingforthestudentloan of Saskatchewan. funding fortheCollegeofMedicineatUniversity secondary institutions,including$87.8millionin will provide operatingandcapital grantstopost- Education is$727.8million.Ofthat,$672.8million The 2019-20BudgetfortheMinistryofAdvanced since 2007-08. child care spaces.Thisisanincrease of7,000spaces care, enablingtheprovision of16,745provincial The 2019-20Budgetincludes$72.6millionforchild Education Property Tax ratesremain unchanged. This Budgetincreases schooldivision fundingwhile school year, a$26.2millionincrease overlastyear. $1.9 billioninoperatingfundingforthe2019-20 Saskatchewan’s schooldivisionswillreceive expenseisbudgetedat$3.28billion,up
Budget 2019-20 13
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expense is
Safety Services initiative. for the Coroner’s is also a $1.6 million increase There for a new initiative service, a $1.2 million increase and $1.1 million strategy, the gang violence reduction driving detection training for drug impaired more for police. Workplace Safety. It also includes the Advocate for Safety. Workplace the Information and Privacy Youth, and Children Public Commissioner and the Ombudsman and as well as the Commissioner, Disclosure Interest a number Saskatchewan Public Safety Agency and of other accounts and funds. than $7.2 million is being In this Budget, more component of the new invested in the correctional The secure Battleford. Saskatchewan Hospital North services to correctional side of the facility will provide issues. clients living with significant mental health 96 beds for This first-of-its-kind facility provides clients. correctional than $15 million to This Budget includes more continue funding 128 municipal police positions and the province. policing initiatives across targeted committed to addressing Government also remains the continued the issue of rural crime through and Response Team, investment in the Protection and the Combined Traffic Crime Reduction Teams, Funding for income assistance programs and service assistance programs Funding for income in this Budget, by $10 million delivery will increase $6.3 million for the including an additional for Disability Program. Income Saskatchewan Assured and Property of Persons Protection to $701.1 million, in the 2019-20 Budget increasing last year. 1.6 per cent, from up $11.2 million, or expense includes of persons and property Protection and Policing, the the Ministry of Corrections Integrated Justice Services of the vote, and portions and Ministries of Government Relations, Justice and Attorney General, and Labour Relations
includes the
Disorder individualized funding program introduced individualized funding program Disorder by $700,000, as the amount in 2018 will increase need can access for the services their children parents to $6,000. $4,000 from grows There is an increase of $6.6 million in this Budget is an increase There for adults with support to continue the Ministry’s intellectual disabilities. The 2019-20 budget for the Autism Spectrum receive an additional $5.9 million in 2019-20. receive foster families will be eligible of this increase, As part for additional monthly payments once they complete skills. their caregiving specific training to increase This is a new $1.4 million investment. provides housing and 24/7 supports to children and to children and 24/7 supports housing provides families. who and those Community-based organizations and families and provide deliver services to children with intellectual disabilities will for people support homes and group homes and private treatment for homes and private treatment homes and group high needs. with children million to This includes a new investment of $1.2 living initiative, which expand the intensive support This Budget includes an increase of $27.7 million to This Budget includes an increase families. This funding and at-risk children support will enhance the range of services that keep children services for families to safe, including intensive direct safely at home, community-based keep their children Education. social servicesIn the 2019-20 Budget, assistance and of $51.4 million expense is $1.4 billion, an increase or 3.7 per cent over last year. budgeted spending of the Ministry of Social Services,budgeted spending Corporation, the the Saskatchewan Housing Aid Commission, as well as Saskatchewan Legal Relations, of the Ministries of Government portions General and Advanced Justice and Attorney Social Services and Assistance 14 Budget 2019-20 preconstruction designofanewVictoria Hospital This Budgetincludes $2.5milliontoadvance replace aginglong-termcare facilities. Since 2007-08,$342million hasbeeninvestedto across theprovince. to replace 13long-termcare facilitiesforseniorsfrom Meadow Lake,fulfillingGovernment’s commitment facility toreplace theNorthland PioneersLodgein to begintheconstructionofanewlong-termcare $103 millionforhealthcare includes$12million Infrastructure investmentinthisBudgetof a combinedcapitalinvestmentof$2.7billion. Executive Governmentministriesandagencies,for $1.1 billionincapitalinvestmentactivitiesof investment inthecommercial Crown sectorand The 2019-20Budgetoutlines$1.6billionofcapital INVESTING ININFRASTRUCTURE and agencies. releases andbackgrounders from individualministries related tothe2019-20Budget are outlinedinmedia areas ofgovernment.Further detailsofhighlights investments intoprograms across and services all These are justsomeofthemany significant upon thesuccessofprogram. province, andthisincreased fundinghelpsbuild 700 peopleatits72collectiondepotsacross the and RecyclingProgram. SARCAN employsmore than deliver theSARCANBeverageContainerCollection $2.25 million,foratotalof$27.0tohelp In the2019-20Budgetthere isanincrease of Agency, aswellotherentities. Culture andSport, spendingbytheWater Security portions oftheMinistriesEnvironment, andParks, Environment andnaturalresources expensesinclude $12.2 million,or4.8percent,from 2018-19. increasing to$263.9millioninthisBudget,up Environment andNaturalResources
expense is
St. Mary, Empire andWestmount Schoolsin in Regina;anewfacilitytoreplace Sacred Heart, replacement ofÉcoleSt.Pius X andArgyle Schools These projects include:theconsolidationand existing schoolsandbuildnewfacilities. dedicated toplanningmajorprojects toconsolidate is $95.6millioninthisBudget,with$3.3 Infrastructure investmentintheK-12schoolsystem Weyburn. $2.5 milliontoplananddesignanewhospitalin province’s north. ThisBudgetalsoincludes in PrinceAlbert, the animportant facilitytoserve Disabilities. in capitalforTransit Assistancefor Peoplewith Transit Funds,aswell$250,000innewinvestment Canada, CleanWater and Wastewater andPublic to continuecommitmentsunder theNewBuilding Canada Infrastructure Program, aswellfunding It includesnewfundingundertheInvestingin budget. this Budget,an11percentincrease from lastyear’s Municipal infrastructure fundingis$229.8millionin 2019-20. about 1,000kilometres ofthehighwaynetworkin Overall, thisBudgetprovides fundingtoimprove highways. Regina Bypass,toimprove the safetyofSaskatchewan as well$89millionforthecompletionof $60 millionfortwinningandpassinglaneprojects, Intersection SafetyProgram. It alsoincludesover for thefirstyearofafive-year, $65millionEnhanced transportation infrastructure, including$13million The 2019-20Budgetincludes$458millionfor Weyburn. construction ofnewschoolsinRosthernand This Budgetincludes$29millionforongoing of St.FrancesSchoolinSaskatoon. Moose Jaw;andfundingtoplanthereplacement
Budget 2019-20 15
NL
45.2
PE
32.6 NS 34.6
NB 38.5
QC
ON 40.3 40.2 MB 34.2 SK 14.8 AB 8.2 BC
14.6 0 50 40 30 20 10
Statistics Canada, Conference Board of Canada Statistics Canada, Conference Board of Canada Per Cent of GDP of Cent Per Sources: Jurisdictions’ most recent data as of March 5, 2019, Sources: Jurisdictions’ NET DEBT AS A PER CENT OF GDP A AS NET DEBT (As at March 31, 2019) lower than it was in 2008, resulting in cumulative lower than it was in 2008, resulting payments. savings of nearly $1.2 billion in interest All government debt, including that of Crown All government debt, including that of manageable at to remain corporations, is forecast 31, 2020, up $1.8 billion from $21.7 billion at March and up $1.7 billion over quarter at third the forecast investment into budget, due to further last year’s capital. The 2019-20 Budget is balanced. Government’s unchanged in to remain operating debt is forecast 2019-20, at $6.15 billion which is about 10 per cent DEBT MANAGEMENT achieves the right balance by The 2019-20 Budget schools, highways, municipal investing in hospitals, the needs of a to help meet infrastructure and Crown making sure while population and economy, growing debt is managed responsibly. 31,2019, is at March net debt The Province’s among lowest third to be $12.1 billion, forecasted of GDP. as a percentage provinces
emissions by 2030. 2
$32 million planned investment in 2019-20 includes the of water and wastewater systems, and the creation maintenance of infrastructure. on in the Saskatchewan Builds Capital Plan (More pages 18 to 23.) growing customer demand through investment of customer demand through growing its the integrity of $340 million in capital to protect natural gas transmission and distribution systems. reliable the continued delivery of safe and ensure To water and wastewater services, SaskWater’s this year, with more planned, to bring the total from more with this year, in small the two-year initiative to 100 new sites 2020. communities by March service to meet safe, reliable will provide SaskEnergy telecommunications Crown corporation will continue telecommunications Crown its high-speed fibre-optic of infiNET, out the roll internet service. will continue to enhance rural services, and SaskTel cellular sites has announced the addition of 41 new 40 per cent reduction in CO 40 per cent reduction service to its customers with will improve SaskTel upgrade its capital investment of $321 million to networks. Saskatchewan’s wireline and wireless capital will allow the Crown utility to connect more Crown capital will allow the electricity generation assets. customers and expand service,SaskPower also continued reliable ensure To its distribution and transmission plans to renew the goal of achieving a systems and to move toward Executive Government. also have a Crowns commercial In 2019-20, major scheduled. number of capital projects million planned investment in $873 SaskPower’s These are just a few highlights among many, across among many, just a few highlights These are 16 Budget 2019-20 begins onpage48.) (More informationon2019-20Borrowing andDebt available toaddress debtasitmatures. Government has$2.4billion insinkingfunds so thatitisn’t passed ontofuture generations. cash isavailabletorepay capitaldebtasitcomesdue, is setasideandinvestedeachyeartoensure sufficient At leasttwopercentofthevaluetheseborrowings plan istherepayment ofcapitaldebtuponmaturity. A keyprincipleofGovernment’s capitalfinancing benefits oftheassetswithtermpayments. using adisciplinedapproach and matchingthe have madethisacost-effective time tofinancecapital, to-GDP, combinedwithrelatively lowinterest rates, The Province’s strong credit ratingsandlownetdebt- since 2008. more than$30billioncombined intoinfrastructure Crowns andExecutiveGovernment haveinvested networks, amongotherinitiatives. improve thesafetyofnaturalgas distribution networks andcellulartowers,toenhance distribution capacity, tobuild telecommunications increase powergeneration,transmission and 11 years.Crowns haveinvested ininfrastructure to investments, more than$17billion, overthepast Crown corporationshavealso madesignificant and otherprojects throughout theprovince. provide support forneededmunicipalinfrastructure 2008 tobuildschools,hospitals,highwaysand Government hasinvestedmore than$13billionsince Standard andPoor’s andDBRS,are combined. ratings from thethree majoragencies,Moody’s, second-highest credit ratinginthecountrywhen by Moody’s TheProvince InvestorsService. hasthe credit rating,theagency’s highestrating,confirmed Late inSeptember, SaskatchewanhaditstripleA
investments withcarefully managed spendingand The 2019-20Budgetbalancesthoseneeded those mostvulnerable. health care, forseniorsand education,services into thefuture, tosustainneededinvestmentsin The Governmenthasaplantocontinuebalance population isgrowing. The province’s economyisstrengthening. Its balance forSaskatchewanpeople. The 2019-20Budgetisbalanced,andittheright CONCLUSION Saskatchewan. The 2019-20Budgetistherightbalancefor years ahead. the province, todayandinthe days,monthsand investment tohelptheeconomyandpeopleof This Budgethastherightbalanceofinfrastructure base withoutraisingtaxes. continues todevelopastable,sustainablerevenue
SASKATCHEWAN PROVINCIAL BUDGET 19-20
SASKATCHEWAN BUILDS CAPITAL PLAN 18 Budget 2019-20 strategic alignmentofinfrastructure investments ministries andagencies.Theplanensures the investment activitiesofExecutiveGovernment The 2019-20CapitalPlanincludesthecapital CAPITAL PLANHIGHLIGHTS SASKATCHEWAN BUILDSCAPITAL PLAN $13.4 billionhasbeenprovided since2008-09to education, highways,andmunicipalities.Altogether, including newandcontinuedinvestmentsinhealth, 2019-20 Budgetforinfrastructure expenditures, The planprovides over$1.1billion inthe on Government’s infrastructure expenditures. priorities, andenhancestransparency inreporting with theprovince’s growth andqualityoflife (2019-20 to2022-23 SASKATCHEWAN BUILDSCAPITAL PLAN
Millions of Dollars 1,000 1,200 1,400 1,600 1,800 2,000 200 400 600 800 0 2008-09 1,361 Actual 2009-10 Actual 927 2010-11 1,174 Actual 2011-12 Actual 612 2012-13 Actual 780 2013-14 Actual 823
2014-15 Actual
954
)
2015-16 1,154 Actual
2016-17 1,757 Actual into thefuture. that meettheneedsofSaskatchewanpeoplenowand make fiscallyresponsible infrastructure investments Maintaining growth andopportunities. meet ongoinginfrastructure needs,andpromote 2017-18 1,552 Actual and the$1.1billionoutlinedinthisplan. investment ofover$2.7billion,includingCrowns The 2019-20Budgetincludesatotalcapital 2018-19 Budget 1,241 2018-19 Forecast The RightBalance 1,172
2019-20 Budget 1,123 2020-21 Target 1,042
2021-22 Target meanscontinuingto 982 2022-23 Target 958
Budget 2019-20 19
1,915
5,299 9,500
8,565
Ta r g e t
17,955
21,775 85,500
25,350
74,180 23,343 32,000
33,390
12,460 10,217
388,792 569,409
958,201
349,970
131,782
115,000
958,201
2022-23
6,400
4,705
7,399 9,500
8,565
Ta r g e t
17,955
57,081 73,800
24,323
74,180 23,343
51,298
26,328 10,227
407,560 574,810
982,370
349,970
122,296
115,000
982,370
2021-22
8,699 9,500
8,565
Ta r g e t
17,955
47,529 62,300
23,340
64,280 23,343 45,300
16,884 46,406
26,303 10,252
421,039 620,575
349,970
165,988
115,000
2020-21
1,041,614
1,041,614
–
9,500
8,700
17,955
39,696 55,900
22,400
54,380 23,343 25,300
72,034 74,995 12,149
26,408 10,877
Budget
517,378 605,936
439,844
229,833
2019-20
1,123,314
1,123,314
– The 2019-20 to 2022-23 Saskatchewan Builds Capital The 2019-20 to 2022-23 and provides to date approved Plan outlines projects capital investment. future an estimate of anticipated as follows. The plan is detailed
9,500
9,452 8,700
17,955
14,329 49,600
22,400
47,242 20,989 56,500
55,416 10,566 11,843
22,273
731,917 439,816
629,982
184,986
2018-19
Forecast
1,171,733
1,171,733
2019-20 TO 2022-23 2019-20 TO
–
–
9,500
9,452 9,200
17,955
26,813 49,600
22,400
44,600 22,360 61,200
30,848 28,555 13,499
15,680
Budget
779,327 461,683
672,882
206,466
2018-19
1,241,010
1,241,010
$457.8M in 2019-20
–
$229.8M in 2019-20
–
$214.7M in 2019-20
$22.4M in 2019-20
–
–
$95.6M in 2019-20
–
$103M in 2019-20
–
(Thousands of Dollars)
Capital Asset Acquisitions Capital Transfers Capital Transfers
Saskatchewan Builds Capital Plan Total Builds Capital Plan Saskatchewan
Capital Plan by Sector Capital Plan by
Transportation Infrastructure Transportation Highways Capital (including Regina Bypass) Highways Highways Partnerships and SupportingHighways Capital
Municipal Infrastructure Municipal Programs
Investing in Canada Infrastructure Program Investing
Education Capital School Capital Maintenance Capital
Advanced Education Advanced Maintenance Capital
Health Care Maintenance Capital Health Equipment Health Facilities
Government ServicesGovernment IT Capital Dams and Water Supply Channels Water Dams and Courts and Corrections Capital Parks Capital Parks Equipment Capital Government Buildings Government Other Capital
Saskatchewan Builds Capital Plan Total Builds Capital Plan Saskatchewan SASKATCHEWAN BUILDS CAPITAL PLAN BUILDS CAPITAL SASKATCHEWAN In addition to the Saskatchewan Builds Capital Plan, In addition to the Saskatchewan to be is projected the Crowns capital spending by 2019-20. On average, Crown over $1.6 billion in billion on to spend $1.8 projected corporations are annually between 2019-20 capital investments and 2022-23. 20 Budget 2019-20 Pilot Butte,WhiteCityandBalgonie. important interchanges inthecommunitiesof for muchsafertravelthrough theopeningof in October2019.Thisproject hasalready provided Construction oftheReginaBypasswillbecomplete Highway 355westofSpruceHome. between southandwestofTobin Lakeand Highway 155nearGreen Lake,Highway255 including ruralhighwayupgradessuchas kilometres ofimprovements tothehighwaysystem, Overall, theBudgetprovides for almost1,000 on Highway7. twinning lanesaround thecommunity ofVanscoy between SaskatoonandHighway2,inadditionto between Yorkton andCanora,Highway5 Yorkton, Highway2north ofMooseJaw, Highway9 Alberta border, Highway10betweenMelvilleand Highway 7betweenRosetown,Kindersleyandthe Highway 6and39betweenWeyburn andEstevan, lane projects. Thisincludespassing laneson over $60millioninfundingfortwinningandpassing Improved safetyiswhythe2019-20 Budgetprovides the 2019-20Budget. will beprovided forspecificsafety improvements in Safety Improvement Program, atotalof$20million the province. Including$7millionfrom theexisting over fiveyearstoaddress intersectionsafetyacross Intersection SafetyProgram willinvest$65million highest priorities.Theintroduction oftheEnhanced our roadways continuestobeamongthevery funding fortransportation infrastructure. Safetyon The 2019-20Budgetprovides $458millionincapital Transportation Infrastructure CAPITAL PLANDETAILS
Municipal Infrastructure municipalities. Highway Connectorprograms tosupport for theMunicipalRoadsEconomyandUrban The Budgetcontinuestoprovide nearly$20million station andforce mainupgradeinWhitewood. and upgradeinPreeceville, andasewagepump Kipling, awastewatertreatment facilityexpansion water treatment plantupgradesinCarrot Riverand treatment systemintheRMofLoonLakeNo.561, across Saskatchewan,suchas the newwater funding forimportant ongoinginfrastructure projects Provincial support forprograms liketheseprovide Infrastructure Funds. Clean Water andWastewater, andPublicTransit commitments undertheNewBuildingCanada, also includesmore than$113 million tocontinue new InvestinginCanadaInfrastructure Program. It This includesfundingformunicipalitiesunderthe $23.4 millionor11percentfrom lastyear’s budget. municipal infrastructure funding, anincrease of The 2019-20Budgetincludes$229.8millionfor been investedinmunicipalinfrastructure projects. Since 2008-09,approximately $1.8billionhas province. years toaddress intersectionsafetyacross the Safety Program willinvest$65millionoverfive The introduction oftheEnhancedIntersection
Budget 2019-20 21
Since 2008-09, Government has invested over of Advanced the Ministry $600 million through in the post-secondary Education for infrastructure sector. education and research Education for infrastructure in the post-secondary Education for infrastructure This includes the sector. education and research Health Sciences Building and the International at the University of Saskatchewan, Centre Vaccine at the University of Regina, a new student residence at Southeast, Parkland, and notable projects Colleges. Cumberland, and Carlton Trail $22.4 million for The 2019-20 Budget provides This in the sector. maintenance capital and renewal for the ongoing and proactive funding provides post- of Saskatchewan’s upgrade and renewal secondary infrastructure. 2014-15. This provides a cost-effective measure to measure a cost-effective 2014-15. This provides environment of a safe learning the provision ensure useful life of existing facilities. while extending the Budget includes $6.4 million In addition, the 2019-20 an increase This represents classrooms. for relocatable budget last year’s per cent from of $3.3 million or 106 management of enrolment effective and supports within existing facilities. growth Advanced Education over Since 2008-09, Government has invested the Ministry of Advanced $600 million through
and 23 major renovation projects. projects. and 23 major renovation Over $1.7 billion has been invested in education capital since 2008-09, including 46 new schools $6.3 million or 12.7 per cent from last year’s budget. last year’s $6.3 million or 12.7 per cent from than doubled since Maintenance funding has more $55.9 million for capital Budget 2019-20 provides of an increase maintenance in the K-12 sector, Rosthern in 2019-20. These schools are scheduled Rosthern in 2019-20. These schools are to be completed in 2020-21. planning for the replacement of St. Frances school planning for the replacement in Saskatoon. to continue Funding of $29 million is provided and construction of new schools in Weyburn advancement of three new major school projects, advancement of three of École St. Pius X and including the replacement in Moose Jaw Schools in Regina; a new facility Argyle and Empire St. Mary, Heart, Sacred to replace Schools; and initial funding to begin Westmount has been invested in education capital since 2008-09. has been invested in include funding for the These investments schools, major building construction of new and repairs. renovations $3.3 million for the The Budget provides Education Capital $95.6 million for provides The 2019-20 Budget of K-12 schools, an increase Saskatchewan’s per cent over the $19.2 million or 25.1 close to $1.7 billion 2018-19 Budget. Altogether, 22 Budget 2019-20 provincial hospitals. to continuerenewal ofelectricalinfrastructure at maintenance andequipment, including$8.3million The 2019-20Budgetprovides $86.0millionfor viability ofSaskatchewan’s healthcare infrastructure. equipment toensure thelong-termsustainabilityand investments forhealthfacilitymaintenanceand The planalsofocusesonproviding substantial Hospital. activities forthereplacement of Weyburn General northern hub;and$2.5millionto beginplanning volumesforthisimportant demand andservice government ontheneedtoaddress increasing patient Hospital, includingengagingwiththefederal preconstruction designforPrince Albert’s Victoria Northland PioneersLodge;$2.5milliontoadvance term care facilityinMeadowLake toreplace the commence theconstructionofanew72-bedlong- The 2019-20Budgetprovides $12 millionto in the2019-20Budget. expenditure willbeprovided tothehealthsystem projects, more than$150millionincapital investment inmajorinformationtechnology(IT) repairs, andequipment.AfterincludingGovernment’s of newhealthfacilities,majorrenovations and The planincludesinvestmentsintheconstruction over $103millionprovided inthe2019-20Budget. investments forthehealthcare system,including The four-year plantargets $470millionincapital Health Care renewals, andequipment since2008-09. the constructionofnewhealthfacilities,facility Government hasinvestedover$1.6billionin
facilities throughout theprovince. Thisincludes this periodtoreplace outdated long-termcare Additionally, $329.9million has beenprovided over Laboratory inRegina. North Battleford andtheRoyRomanowProvincial replacing agingcentres likeSaskatchewanHospitalin and theDr. F. H.Wigmore HospitalinMooseJaw, and Children’s HospitalofSaskatchewaninSaskatoon state-of-the-art facilitiessuchastheJimPattison Saskatchewan residents. Thisincludesbuildingnew sector inorder toimprove thequalityofcare for $1.6 billionincapitalprojects across thehealth Since 2008-09,Governmenthasinvestedover ongoing fundingtocontinuethedevelopmentofa and improve security. The2019-20Budgetprovides IT infrastructure toincrease operationalefficiencies Government willcontinuetoinvestinmodernizing the 2019-20Budget. delivery,service including$214.7millionprovided in in theseareas tosupport highqualityprogram and investing over$540millionthenextfouryears and ITmanagementsystems.Governmentis correctional facilities,parksand recreation facilities rehabilitation, dayprogram facilities,courts and required upgradesofbuildings,provincial dam infrastructureGovernment services provides for Government Services long-term care facilitiesacross Saskatchewan. the LeaderIntegratedCare Facility, and11other The Meadowslong-termcare facility inSwiftCurrent,
Budget 2019-20 23
means fiscally prudent capital
Low interest rates, combined with the Province’s rates, combined Low interest to make this a rating, continue excellent credit time to finance capital. cost-effective due. This ensures that any debt pertaining to that any debt pertaining due. This ensures assets will not be passed on to future infrastructure generations. province, as well as to support its future prosperity. prosperity. its future as well as to support province, will continue to be funded Capital expenditures to in order disciplined financing strategy, a through and needs of our province meet the infrastructure with the term better match the benefits of the assets of payment for these assets. of capital Planning for and enabling the repayment debt upon maturity continues to be a key principle this capital financing plan. As a result, of undertaking committed to having at least Government remains set two per cent of the value of these borrowings that sufficient aside and invested each year to ensure the debt as it comes cash will be available to repay To purchase an air tanker to help combat wildfires, an air tanker to help purchase To $9.3 million; the total provides the 2019-20 Budget million over the next to be $37.0 cost is projected initiative of the Government’s years. This is part three fleet to better protect aerial to modernize the wildfire events. wildfire the public against possible Builds Saskatchewan Capital Plan Financing in Canada, Saskatchewan, as with other jurisdictions has a significant amount of aging infrastructure. The Right Balance needs of the to meet the current expenditures
improvements. systems, roads, boat launches and trails. Planned systems, roads, in parks for 2019-20 include capital improvements of the swimming pool facility at replacement Park, construction of a new Pound Provincial Buffalo at Candle Lake and various other visitor centre infrastructure, including electrical expansion to infrastructure, nearly 2,000 campsites, four campground over 300 new campsites, developments providing as well replacements, service centre 26 campground to water and wastewater as major improvements Saskatchewan’s Parks as part of Government’s Parks as part Saskatchewan’s and upgrade our provincial commitment to improve been parks. Since 2008-09, $110 million has parks. These investments have invested in provincial to facilities and major improvements in resulted the Water Management Infrastructure Renewal Plan Management Infrastructure the Water The major projects Security Agency. with the Water works on the for 2019-20 include rehabilitation Lake Dam. M1 Canal and the Crooked $9.5 million to The 2019-20 Budget provides programs. in the Funding of $75 million is provided of the 2019-20 Budget for the rehabilitation of as part dams and conveyance channels province’s Jim Pattison Children’s Hospital, scheduled to open Jim Pattison Children’s and $6.9 million for Income in the fall of 2019; Ministry at the Technology Assistance Information of Social Services, enhance will further which ability to deliver its income assistance Government’s replacing 82 separate administrative systems 82 separate administrative replacing and health regions the 12 former inherited from million to $9.6 operational efficiencies; increasing of state-of-the art complete the installation the new to operationalize technology required new integrated information management system, new integrated information 24 Budget 2018-19 SASKATCHEWAN PROVINCIAL BUDGET 19-20
TECHNICAL PAPERS
Budget 2019-20 27
Global
China impacts of Brexit, continue to present risks to the continue to present impacts of Brexit, global outlook. to the economic exist related concerns Further (the U.S. and economies slowdown of the two largest tightening China) and some central banks gradually monetary policy. by to grow Overall, the global economy is expected by growing 3.4 per cent in both 2019 and 2020 after 3.7 per cent in 2018. are expected to boost real GDP growth to 2.4 per cent to 2.4 per GDP growth expected to boost real are in the 2.0 per cent growth in 2020, followed by range thereafter. ECONOMIC OUTLOOK GLOBAL is expected to moderate Global economic growth tension, especially slightly in the near term. Trade between the U.S. and China, and the economic 2020 Japan
2019
Eurozone THE SASKATCHEWAN ECONOMY ECONOMY SASKATCHEWAN THE U.S.
Canada
8 6 4 2 0 Per Cent Cent Per Sources: Bank of Canada (January 2019), Conference Board of Canada (December 2018) GLOBAL REAL GDP GROWTH ASSUMPTIONS GROWTH GDP REAL GLOBAL By 2020, the Saskatchewan economy is expected to By 2020, the Saskatchewan economy “normal” position. Higher oil prices, more to a return and investment, oil production leading to increased challenges continue, particularly in the oil sector, in the oil sector, challenges continue, particularly strong, and potash industries remain the agriculture of projection GDP growth a real supporting 1.2 per cent. indicators were weak, many of the non-investment indicators were note. Overall, indicators ended the year on a positive by 1.0 per cent expected to have grown GDP is real in 2018. positive. While For 2019, the outlook remains Saskatchewan’s economy is strengthening. economy is strengthening. Saskatchewan’s in 2017, performance strong Following a relatively in 2018 was economic performance Saskatchewan’s mixed. While several of the major investment INTRODUCTION 28 Budget 2019-20 CANADIAN AND U.S.ECONOMIC ASSUMPTIONS 25 percenttariff hikeonChinesegoods. up strongly asimporters aimedtoavoidthepossible exports toChina.Imports, ontheotherhand,went were weak,mainlyduetoadecline insoybean growth, especiallyinthesecond halfof2018.Exports Trade activitybecameakeyfactorthatimpacted U.S. dollar. employment growth, incometax cutsandastrong Personal spendinghasbenefitedfrom strong in thesecondquarter. 3.4 percentinthethird quarter and4.2percent of 2018,growing by2.6percent, following U.S. economyremained strong inthefourth quarter Despite therecent partial governmentshutdown,the strong privateinvestment. among G7countries,up2.9percentin2018,ledby The U.S.economyhashadthefastestpaceofgrowth 1.9 percentgrowth in2018. in 2019and1.7percent2020,afterposting The Eurozone isexpectedtogrow by1.5percent slowest pacesincethesecondquarter of2014. by only1.7percentinthethird quarter of2018,the beginning oftheyear. TheEurozone economygrew Eurozone economicgrowth hasslowedsincethe Sources: StatisticsCanada,Conference BoardofCanada,MinistryFinance Canadian Dollar(UScents) CanadaBond(%) 10-year Governmentof Short-term InterestRate(%) U.S. RealGDP Growth(%) Can. RealGDP Growth(%)
Actual 77.19 2018 2.28 1.39 2.9 1.8
76.60 2019 3.20 2.03
2.7 1.9
substantially by2.8percentinthesecondquarter. in thefirstquarter of2018,butrebounded and weak.Japan’s real GDPdeclinedby1.3percent Economic performance inJapanhasbeenvolatile respectively. 2.7 percentand2.3in20192020, Overall, theU.S.economyisexpectedtogrow by ongoing tradenegotiationswithChina. monetary policy, risinggovernmentdebtandthe including theendingoffiscalstimulus,tightening challenges anduncertainties inthenearterm, The U.S.economyisexpectedtofacemore downward stress toChina’s already-slowing economy. The tradedisputewiththeUnitedStatesadds 1.0 percentand0.4cent,respectively. remains weak,withreal GDPexpectedtogrow by 0.7 percentin2018.Theoutlookfor2019and2020 As aresult, Japan’s real GDPgrowth slowedto Japan’s real GDPimproved, growing by1.4percent. the secondquarter of2014.Inthe fourth quarter, natural disasters.Itisthesteepestcontractionsince annualized 2.5percentinthethird quarter dueto Japan’s economy, however, contractedagain byan 78.60
2020 3.80 2.67 2.3 2.1
79.50 2021 3.84 2.96 2.3 1.7
80.00 2022 3.84 2.96 2.3 1.6
80.40
2023 3.84 2.96 2.0 1.8
Budget 2019-20 29
Imports
Exports Canadian Interest Rates its policy The Bank of Canada continues to tighten been raised rate. The Canadian overnight rate has for a total of 75 basis points, from times three 1.00 per cent to 1.75 per cent in 2018. about The Canadian overnight rate is currently funds rate, 65 basis points lower than the U.S. federal on the value of the Canadian dollar. putting pressure Residential investment, in particular, slowed in particular, Residential investment, and tighter rates mortgage markedly due to rising finance requirements. mortgage in the fourth business investment Non-residential in the energy especially also fell significantly, quarter prices. sector due to low oil per cent in 2018, 1.8 grew GDP real Overall, Canada’s 2017. Growth in with 3.0 per cent growth compared at a more in 2019 and 2020 is expected to remain cent, normal pace of 1.9 per cent and 2.1 per respectively. 2018 Investment
Non-residential Non-residential
2017
Investment Residential
Spending Government Personal Spending
5 3 1
0 -1 -3 Per Cent Cent Per Source: Statistics Canada CANADIAN REAL GDP GROWTH BY MAJOR COMPONENTS GROWTH BY GDP CANADIAN REAL government spending which grew by 3.3 per cent government spending which grew and 2.5 per cent, respectively. Canada’s real GDP growth weakened to 2.0 per cent GDP growth real Canada’s and 0.4 per cent in the fourth quarter in the third quarter. the across The slowdown in 2018 was widespread and with the exception of exports economy, CANADIAN ECONOMIC OUTLOOK lost its momentum, Canadian economic growth After strong especially in the second half of 2018. of 2018, 2.6 per cent in the second quarter of growth 6.6 per cent in 2018, the weakest pace since 1990. 6.6 per cent in 2018, economy is expected to slow further, Overall, China’s 6.2 per cent in 2019 and 5.8 per cent by growing in 2020. China’s economic growth weakened from a high weakened from growth economic China’s 2018 to of first quarter of 6.8 per cent in the quarter. fourth 6.4 per cent in the by is estimated to grow The Chinese economy Despite aggressive monetary and fiscal stimulus, monetary and fiscal Despite aggressive 30 Budget 2019-20 rates. widening spread betweenCanadian andU.S.interest pressure, mainlyrelated toweakoilpricesandthe The valueoftheCanadiandollarhasbeenunder Canadian Dollar CANADIAN AND U.S.INTERESTRATES SASKATCHEWAN ECONOMICINDICATORS Sources: BankofCanada,U.S.FederalReserve Per Cent 0.0 0.5 1.0 1.5 2.0 2.5 Source: StatisticsCanada Construction ($B) Investment inNon-residential Construction($B) Investment inResidential Housing Starts(#ofunits) Building Permits($B) International Exports($B) Manufacturing Sales($B) New MotorVehicle Sales(#ofunits) Wholesale Trade($B) Retail Sales($B) Average Weekly Earnings($) Consumer PriceIndex(2002=100) Unemployment Rate(%) Employment (000s) Population atOctober1(000s)
2015 Jan- Overnight Rate Overnight Canadian 2016 Jan-
2017 Jan-
Funds Rate U.S. Federal 2018 Jan- 1,116.2 58,434 8,257 974.7 128.7 570.9 2014 35.3 15.8 25.5 19.2 N/A N/A 3.8 2.7
2019 Jan-
1,124.9 55,131
5,149 980.7 130.8 573.7 2015 32.8 14.1 27.9 18.5 1.8 2.9 2.9 5.0 74.46 U.S.centsinDecember. average highof80.47U.S.centsinJanuary2018to The valueoftheCanadiandollardropped from an in 2020. average 76.60U.S.centsin2019and78.60 Overall, thevalueofCanadiandollarisforecast to CANADIAN DOLLAR
Source: BankofCanada US Cents 70 75 80 85 90 95 0 1,140.8 2014 Jan- 52,099 4,775 988.4 132.2 568.5 2016 26.4 14.2 25.8 18.8
2.1 2.6 2.0 6.3
2015 Jan- 1,010.5 1,155.0 56,292 4,904 134.4 567.6
2017 28.0 16.1 26.0 19.6 1.5 2.7 2.2 6.3 2016 Jan-
1,015.7 1,165.9 50,192 3,610 137.5 570.0 2018
31.1 17.9 27.1 19.5 2017 Jan- 1.4 2.4 1.8 6.2
% Change 2018 Jan- (12.4) (26.4) (16.7) (10.8) 2018 11.3 11.1 (9.6) (0.5) N/A 4.2 0.5 2.3 0.4 0.9 2019 Jan-
Budget 2019-20 31
2018 2015 Metal Ores & Metal Ores Non-metallic Minerals: 20.1% Farm, Fishing, Intermediate Food 42.4% Products: 2012
2009 Others: 8.7% 2006
2003
2000 1997 1994 5 0
20 15 10
28.7% Energy Billions of Dollars of Billions Source: Statistics Canada Products: Source: Statistics Canada COMPOSITION OF SASKATCHEWAN COMPOSITION OF SASKATCHEWAN GOODS EXPORTS IN 2018 INTERNATIONAL SASKATCHEWAN MANUFACTURING SALES SALES MANUFACTURING SASKATCHEWAN IN 2018 11.1% INCREASED BY in Canada) (Second-highest Growth International goods exports, which consist primarily International goods exports, products, of farm, fishing and intermediate food (mainly oil) and metal and non- products energy by roughly metallic minerals (mainly potash), grew 11.3 per cent in 2018. and metal ores products led by energy was Growth per cent and and non-metallic minerals, up by 21.2 also grew Other exports 26.1 per cent, respectively. by 20.6 per cent. Manufacturing sales reached a record level of a record reached Manufacturing sales by 11.1 per cent from growing $17.9 billion in 2018, provinces. among growth 2017, the second-strongest
Building Material & Supplies: 9.3% Motor Vehicle & Motor Vehicle Parts: 4.2% Machinery & Equipment: 31.9% Personal Goods: 2.3% Food: 6.5% Farm Products: 6.8% Farm Products:
39% Supplies & Others: Source: Statistics Canada Agricultural COMPOSITION OF SASKATCHEWAN COMPOSITION OF SASKATCHEWAN WHOLESALE TRADE IN 2018 Sales of building material and supplies increased by Sales of building material and supplies increased by 10.2 per cent. grew 6.0 per cent and food products 35.4 million tonnes, 1.5 per cent greater than in 2017. 35.4 million tonnes, 1.5 per cent greater by 4.2 per cent. In addition, wholesale trade grew and component, agricultural supplies The largest by 7.1 per cent. others, grew year on a more positive note. year on a more early Despite dry conditions in the spring and much of central and southern summer throughout in 2018 totaled production Saskatchewan, crop 16.7 per cent. went up As well, the number of new oil wells drilled by just 0.9 per cent. ended the Some of the non-investment indicators Several of the major investment indicators were weak. investment indicators were Several of the major cent while investment fell by 26.4 per Housing starts building construction fell by in non-residential down 9.6 per cent. Building permits were SASKATCHEWAN 2018 PERFORMANCE SASKATCHEWAN mixed. in 2018 was Economic performance is expected to have GDP real Overall, Saskatchewan Nominal GDP is by 1.0 per cent in 2018. grown cent. by 3.6 per to have increased projected 32 Budget 2019-20 COMMODITY PRICE ASSUMPTIONS (Up 2,400to570,000) COMPOSITION OFEMPLOYMENTIN2018 were infull-timejobs. industries.Allthegains 2018, primarilyinservices The province’s economyadded2,400netnewjobsin persons. Saskatchewan’s populationincreased by10,869 2018. BetweenOctober1,2017and2018, Saskatchewan’s populationcontinuedtogrow in global demand. by 13.3percentto13.8milliontonnesduestrong Potash salesin2018are estimatedtohaveincreased Source: StatisticsCanada Thousands of Jobs Sources: MinistryofEnergyandResources, Ministryof Agriculture 1 Canola (C$/tonne) Wheat (C$/tonne) Potash (US$/KCltonne) Potash (C$/K Natural Gas(C$/GJ) WTI Oil(US$/barrel)
100 200 300 400 500 600 Canadian dollarpriceperK The potashindustryquotespricesinUS dollarsper 0 Sector
Non-ag Sector By Ag Producing Producing Sector
Services- Goods- Sector Sector By 2 O tonne) Category
Part- time Full- time By
2 O tonne. 1 1
Female Male Sex By
499.82 239.29 207.66 440.97 64.78 By Age 2018 Group 1.51 15-24 25+
– CALENDAR YEAR Status KCl tonne.Provincialroyaltycalculations, however, arebasedonthe Private Public Emp Self- By
499.44 246.23 219.66 470.10
58.00 2019 1.70
the U.S.This,inadditiontorelatively lowoilprices, uncertainty withrespect toaccessmarketsbeyond The oilindustryinCanadafacescontinued industries. there are stillsomechallengesfacingcertain The outlookfor2019remains positive.However, OUTLOOK SASKATCHEWAN ECONOMIC 6.2 percentin2018. slightly from anaverageof6.3percentin2017to Saskatchewan’s unemploymentratedropped 3,000 in2023. forecast toincrease to2,500wellsin2020andreach above thelevelsin2015and2016.Drillingis this year, downfrom the2018levelof2,552,but There are 2,000newoilwellsexpectedtobedrilled over themediumterm. both expectedtodeclinein2019,before rebounding For Saskatchewan,oilinvestmentandproduction are down 10.5percentfrom 2018. expected toaverageUS$58.00perbarrel in2019, The priceofWest Texas Intermediate(WTI)oilis is impactinginvestorsentiment. 521.49 251.51 224.27 467.99 61.00 2020 1.90
248.14 228.69 471.69 511.99 63.00 2021 1.95
516.08 232.99 477.75 251.11 70.00 2022 2.25
521.69 252.76 237.30 484.16
73.00 2023
2.30
Budget 2019-20 33
Millions of K O Tonnes 2
18 16 14 12 10 8 6 4 2 0
2.5 4.4 1.9 5.1 5.6 2.4 2023 2023 2022
Potash Price 2021
Forecast 2020 2.5 2.3 4.8 2.0 5.0 5.7 2022 2019 2018
2017 Potash Production 2.7 1.7 3.4 2.0 4.9 5.9
2021 2016 2015
2014 0 2.9 2.4 3.7 2.2 4.3 6.0 800 600 400 200
2020
1,000 2 C$/K O Tonne O C$/K Source: Ministry of Energy and Resources SASKATCHEWAN POTASH PRICE POTASH SASKATCHEWAN AND PRODUCTION (Highest Production Level in 2018 at 14.1 Million Tonnes) The outlook for the potash industry remains positive. potash industry remains The outlook for the potash is anticipated to remain Global demand for sales are Saskatchewan potash As a result, strong. in 2019 to 14.1 million tonnes to increase projected rate of 2.2 per cent at an average annual and grow per year thereafter.
Number of Wells Drilled
1.6 1.2 2.0 2.1 3.5 6.0
2019
4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0
2023
2022 1.0 3.6 2.3 2.4 6.2 (0.5) 2018 WTI Oil Price 2021
Forecast 2020
2019 2018 2017 Oil Wells Oil Wells Drilled
2016
2015
2014 2018 actual 0
CPI* Employment Growth (000s)* Unemployment Rate (%)* Retail Sales* * Sources: Statistics Canada, Ministry of Finance Real GDP Nominal GDP 80 60 40 20
180 160 140 120 100 US$/Barrel US$/Barrel Source: Ministry of Energy and Resources WTI OIL PRICE AND OIL WELLS DRILLED WELLS DRILLED OIL AND PRICE WTI OIL indefinitely. This continues to weigh on the growth indefinitely. outlook. As noted at mid-year, the suspension of operations at As noted at mid-year, River uranium mine has been extended the McArthur in 2019 to roughly 173 million barrels. Total oil Total barrels. 173 million in 2019 to roughly million to 182 is expected to increase production by 2023. barrels Oil production is expected to fall by 2.8 per cent is expected to Oil production SASKATCHEWAN FORECAST AT A A GLANCE FORECAST AT SASKATCHEWAN (Per Cent Change Unless Otherwise Noted) 34 Budget 2019-20 SASKATCHEWAN CROP PRODUCTION (Third-highest Levelin2018) forecast assumesasimilarsizeofcrop for2019. conditions earlyinthegrowing season.Thecurrent crop intheprovince’s historylastyear, despitedry thethird-largestSaskatchewan farmersharvested increase modestlyoverthemediumterm. 6.6 percentto$470.10 The averagepriceofpotashisexpectedtoriseby SASKATCHEWAN GDP Sources: StatisticsCanada,Ministryof Agriculture Millions of Tonnes Sources: 15 20 25 30 35 40 45
Billions of Dollars 0 1998 100 60 70 80 90 1998-07 average: 0 Statistics Canada,MinistryofFinance 2001 2012 23.8 2004 2008-17 average: 2013 2007 31.2 2010 2014 K 2 Price Collapse 2013 Impact ofOil O tonnein2019and 2015 2016 2019 2016
Forecast
2022 Nominal 2017
2018 After adding2,400jobsin2018,employmentis by 3.7percent. by 2.4percent.NominalGDPisprojected toincrease Saskatchewan real GDPin2020isforecast torise agriculture andpotashindustriesremain strong. oil production andinvestment,whiletheprovince’s Oil pricesare expectedtoimprove, leadingtohigher The outlookfor2020ismore robust. forecast togrow by2.0percent. to increase by1.2percentin2019.NominalGDPis All considered, Saskatchewanreal GDPisprojected per yearrangeby2022. Job growth isprojected toreturn tothe5,000jobs and thesuspensionofMcArthur Rivermine. performance intheminingandoil andgassectors forecast toincrease by3,500in2019,spiteofweak Real 2019 2020
2021
2022
2023
Budget 2019-20 35
Date Jan./19 Jan./19 Mar./19 Feb./19 Feb./19 Feb./19 Dec./18 Dec./18 Dec./18 Release
NL
3.7 3.8 2.9 3.1 3.3 3.7 3.4 3.5 3.6 4.0 3.2 PE Growth Cumulative NS
1.9 2.2 1.5 1.3 1.7 1.6 2.0 1.7 2.4 2.2 1.0 NB 2020 Individual private sector forecasts of Saskatchewan forecasts Individual private sector a high of in 2019 range from GDP growth real of 1.4 per cent. 2.2 per cent to a low on average, expects sector, For 2020, the private per cent. by 1.7 GDP to grow Saskatchewan real 2020 QC
1.8 1.6 1.4 1.8 1.6 2.1 1.4 1.7 1.2 1.7 2.2 2019 ON 2019
MB
SK
AB
BC Major Canadian banks, IHS Global Insight, Conference Board of Canada
0 1 2 3
As of March 8, 2019 Per Cent Cent Per
2019-20 Budget Forecast * BMO CIBC Scotiabank National Bank Laurentian Bank of Private Sector Forecasts Average IHS Global Insight Conference Board of Canada TD Bank RBC Private sector forecast average as at March 8, 2019. Sources: PRIVATE SECTOR REAL GDP GROWTH FORECASTS FOR SASKATCHEWAN* GROWTH GDP REAL SECTOR PRIVATE (Per Cent) PRIVATE SECTOR FORECASTS OF REAL GDP GROWTH BY PROVINCE GROWTH BY GDP FORECASTS OF REAL SECTOR PRIVATE PRIVATE SECTOR FORECASTS SECTOR PRIVATE is forecasting on average, The private sector, for Saskatchewan GDP growth 1.7 per cent real in 2019. 36 Budget 2019-20 McArthur Riverremains suspended. to declinethisyearanduraniumproduction at Oil production andinvestment are bothexpected Challenges stillexistincertain industries, however. 1.2 percent. 2019 ispositive.RealGDPforecast toriseby The outlookfortheSaskatchewaneconomyin CONCLUSION (Per Cent) PRIVATE SECTOR FORECASTSOFREAL GDP GROWTHBY PROVINCE* * Canada Newfoundland andLabrador Prince EdwardIsland Nova Scotia New Brunswick Qu Ontario Manitoba Saskatchewan Alberta British Columbia
As ofMarch8,2019 é bec
2018 (0.7) 0.9 2.0 2.1 1.0 2.3 2.2 1.7 1.3 2.2 2.2
Rank 10 5 8 9 1 4 6 7 2 3 3.7 percent. 2.4 percent.NominalGDPisprojected toincrease by Saskatchewan real GDPin2020 isforecast toriseby to higheroilproduction andinvestment. For 2020,oilpricesare expected toimprove, leading Employment growth isforecast tocontinuein2019. recent industries. months,especiallyinthe services remain strong andemploymenthaspickedupin Still, theprovince’s agriculture andpotashindustries
2019 1.8 1.8 1.7 1.1 1.0 1.8 1.8 1.7 1.7 1.5 2.4
Rank 10 4 6 9 3 2 7 5 8 1
2020 1.9 0.9 1.3 1.2 1.0 1.5 1.7 1.5 1.7 2.5 2.6
Rank 10 7 8 9 5 4 6 3 2 1
Budget 2019-20 37
Surplus: $34 Expense: $14,991
Health: $5,888 (39%) Protection: $701 (5%) Protection: Agriculture: $842 (6%) Agriculture: Education: $3,283 (22%) Debt Charges: $694 (5%) Debt Charges: Other Expense: $2,150 (13%) Social Services: $1,433 (10%)
Government of Saskatchewan’s proportionate share share proportionate Government of Saskatchewan’s of net earnings or losses. of The 2019-20 Budget estimates a surplus $34.4 million. eliminating significant inter-organizational eliminating significant also made to account are transactions. Adjustments in the period between an for significant transactions of and the Government year-end fiscal organization’s year-end. Saskatchewan’s (GBEs) Budgets for Government Business Enterprises as a single amount using the incorporated are the modified-equity method, which includes
2019-20 FINANCIAL OUTLOOK FINANCIAL 2019-20
Taxation: $7,589 (51%) $7,589 Taxation: (12%) $1,827 Non-Renewable Resources: GBE Net Income: $1,080 (7%) $2,062 (14%) Other Own Source: $2,467 (16%) Federal Transfers: Revenue: $15,025 Service Organizations (GSOs), including the General (GSOs), Service Organizations consolidated after Revenue Fund (GRF), are in accounting policies and adjusting for differences method of consolidation in the budget is consistent method of consolidation in the budget with the policies described in the Saskatchewan Public Accounts. and expense budgets of Government The revenue The Saskatchewan Provincial Budget includes the Provincial The Saskatchewan within the all organizations financial activity for the Government of Saskatchewan, based on of control established by the Public Sector Accounting standards for senior Canadian governments. The (PSAB) Board OVERVIEW 2019-20 GOVERNMENT OF SASKATCHEWAN BUDGET 2019-20 GOVERNMENT OF SASKATCHEWAN (Millions of Dollars) 38 Budget 2019-20 TOTAL REVENUE forecast. Atotalof$5millionnewrevenue related an increase of$419millionfrom thecurrent 2018-19 and accountsfor51percentoftotalrevenue. Thisis Tax revenue isbudgetedat$7.6billionin2019-20 Tax Revenue GBEs andnon-renewable resources. is largely duetohighertaxrevenue, net incomefrom from the2018-19third quarter forecast. Theincrease 2019-20, anincrease of$695million (4.8percent) Total revenue isforecast tobe$15.0billionin ahead ofthebudget. as changestoprovincial feesand charges announced measures announcedinthisyear’s budget,aswell The 2019-20revenue outlook includesallrevenue REVENUE 2019-20 REVENUERECONCILIATION Total Revenue Transfers fromtheFederalGovernment Other Own-SourceRevenue Net IncomefromGBEs Non-Renewable Resources Taxation (Millions ofDollars) Total Revenue Transfers fromtheFederalGovernment Other Own-SourceRevenue Net IncomefromGBEs Non-Renewable Resources Taxation (Millions ofDollars)
–
2016-17TO 2019-20
including $3millionofexcisetaxintheOthertaxes to cannabistaxationisincludedinthebudget, personal expenditures. economy, includinggrowth inpopulationand base asaresult ofastrengthening Saskatchewan increase isprimarilyduetogrowth inthetaxable of $75millionfrom the2018-19 forecast. The PST revenue isbudgetedat$2.3 billion,anincrease in 2019-20. adjustments in2018-19thatare notforecast torepeat are primarilyduetosignificant, negativeprior-year respectively, from the2018-19forecast. Theincreases budgeted toincrease $213million and$116million, Individual andCorporationIncomeTax revenue are revenue. category and$2millionofProvincial SalesTax (PST) Forecast 14,330.3 2018-19 2,502.7 2,042.7 1,705.6 7,169.9 13,626.1 2016-17 909.4 2,954.8 2,174.2 1,300.0 6,351.2 Actual 845.9
15,025.1 2019-20 14,019.3 Budget 2,467.2 2,062.1 1,080.5 1,826.8 7,588.5 2017-18 2,420.3 2,076.0 1,283.5 1,457.7 6,781.8 Actual
Forecast 14,330.3 2018-19 Dollars 2,502.7 2,042.7 1,705.6 7,169.9 694.8 171.1 121.2 418.6 909.4 (35.5) 19.4 Change
15,025.1 Per Cent 2019-20 Budget 2,467.2 2,062.1 1,080.5 1,826.8 7,588.5
18.8 (1.4) 4.8 0.9 7.1 5.8
Budget 2019-20 39
568.7 768.0 234.5 427.7 729.2 2,555.7 2,304.7 7,588.5 Budget 2019-20
563.1 759.5 239.3 421.5 613.5 2,343.0 2,230.0 7,169.9 2018-19 Forecast
525.1 735.7 254.3 405.8 581.5 Actual 2,266.3 2,013.1 6,781.8 2017-18 Potash: 4% Other Non-Renewable Other Non-Renewable 3% Resources:
Oil and Natural Gas: 5% Oil and Natural Gas:
Other Taxes: 14% Other Taxes: Other Own Source: 14% Other Own Source: 488.6 675.4 259.7 394.8 735.0
Actual 2,592.2 1,205.5 6,351.2 2016-17 Non-Renewable Resource Revenue is budgeted at revenue resource Non-renewable improvement $1.8 billion in 2019-20, a $121 million and accounts for over the 2018-19 forecast, in 2019-20. The increase 12 per cent of total revenue as all due to higher potash revenue, is almost entirely flat on a year-over-year relatively other categories are basis.
Corporation Income Tax: 5% Tax: Corporation Income Net Income from GovernmentNet Income from Business Enterprises: 7%
Non-Renewable Resources: 12% Non-Renewable Resources: Provincial Sales Tax: 15% Sales Tax:
Tax: 17% Tax:
Taxes: 51% Taxes:
2016-17 TO 2019-20 2016-17 TO Personal Income – Federal Transfers: 16% Federal Transfers:
Provincial Sales Tax Provincial Sales Tax Tobacco Other Taxes Total (Millions of Dollars) Tax Corporation Income Fuel Tax Tax Individual Income Property Tax
TAX REVENUE TAX growth in the property tax assessment base, and a the property in growth as a result revenue in Fuel Tax $6 million increase economic activity and continued of increased population growth. All other taxes are budgeted to increase by a budgeted to increase All other taxes are million combined $16 million, including a $9 reflecting Tax, Education Property in increase COMPOSITION OF 2019-20 REVENUE COMPOSITION OF 40 Budget 2019-20 NON-RENEWABLE RESOURCEFORECAST ASSUMPTIONS Resource Credit. and freehold royalties andtheSaskatchewan April 1,2019,whicheliminatescredits forCrown introduced inthe2019-20Budget andeffective of technicalchangestothePotashProduction Tax 2018-19 forecast. Thebudget includes theimpact 2019-20, a$117millionimprovement overthe Potash revenue isbudgetedat $619millionin 30 percent,below2014-15results. resource revenue remains $788million,or 2016-17. Despitethisimprovement, non-renewable recovered by40percent,or$527million,since Overall, non-renewable resource revenue has NON-RENEWABLE RESOURCEREVENUE 2 1 Canadian Dollar(UScents) Potash Price(minenetback, C$/K Potash Price(minenetback,US$/KCltonne) Oil Production(millionbarrels) Well-head OilPrice(C$/barrel) Light-Heavy Differential (%ofWTI) WTI OilPrice(US$/barrel) Potash Sales(millionK Potash Oil andNaturalGas Crown LandSales (Millions ofDollars) Total Other Resource Surcharge
Ministry ofFinance calculationsderivedfromcalendar-year forecasts. The averagepriceperbarrelofSaskatchewan light,mediumandheavyoil.
2 O tonnes)
1
2 2
O tonne)
2 2
–
2016-17TO 2019-20
US$221 perKCltonne(C$470 In 2019-20,averagerealized prices are budgetedat production. Intermediate (WTI)oilpriceandadeclinein a decrease intheannualaverage West Texas oil pricedifferential hasbeenmore thanoffset by from the2018-19forecast. Anarrowing light-heavy $691 millionin2019-20,adecrease of$2million Oil andnaturalgasroyalties are budgetedat to 14.1million to increase from 13.9million from US$211(C$448)in2018-19. Salesare expected 2016-17 2016-17
1,300.0 Actual Actual 76.20 169.3 45.09 47.94 134.0 303.5 241.0 571.4 21.3 50.1 11.2 377 173 –
FISCAL YEAR
2017-18 2017-18 K 1,457.7 Actual Actual 2 317.0 308.7 656.5 77.99 176.8 50.87 53.53 110.8 O 64.7 20.0 12.3 396 187 tonnesin2019-20.
Forecast Forecast 2018-19 2018-19 1,705.6 K 76.47 177.7 53.70 62.50 383.3 501.6 693.0 2 32.2 70.2 57.5 13.9 448 211 O tonnesin2018-19 K
2 O 2019-20 2019-20
Budget tonne),up Budget 1,826.8 385.0 618.6 691.1 77.19 173.1 55.46 59.75 85.5 46.6 24.8 14.1
470 221
Budget 2019-20 41
US Cents
125 100 75 50 25 0 Mar-19
Sept-18
Mar-18 Sept-17 Mar-17 Sept-16 regarding Canadian, U.S. and global economic Canadian, regarding commodity prices and the value of the growth, beyond factors are These Canadian dollar. yet they heavily influence control, government’s particularly fiscal performance, Saskatchewan’s revenue. resource non-renewable Finally, oil production is forecast at 173.1 million is forecast production oil Finally, the 2018-19 forecast 2019-20, down from in barrels of 177.7 million barrels. to The value of the Canadian dollar is forecast an from average 77.19 U.S. cents in 2019-20, up As the price average of 76.47 U.S. cents in 2018-19. generally of Saskatchewan oil at the well-head is prices in the United determined based on prevailing to lower States, a higher exchange rate translates prices in Canadian dollars, all else being equal. Surcharge land sales, Resource Crown Revenue from (including resources and all other non-renewable to uranium, coal and other minerals) is forecast by $6 million. increase in the The economic and fiscal forecasts on a set of assumptions 2019-20 Budget rely
Mar-16
a
–
Sept-15 Mar-15 WTI Oil Prices (left axis) Canadian Dollar (right axis) Sept-14 Mar-14
Sept-13 0 Mar-13
75 50 25
125 100 US$/Barrel WTI OIL PRICES AND THE CANADIAN DOLLAR AND PRICES WTI OIL from record levels experienced during the final record from months of 2018 to an average of 24.8 per cent of WTI in 2019-20. contributed to a general widening of the price years. discount for Saskatchewan oil in recent In 2019-20, the light-heavy oil price differential benchmark for the price discount for oil rough in Saskatchewan – is expected to narrow produced processing to be turned into refined products. As a products. to be turned into refined processing Saskatchewan oil typically trades at a discount result, production to WTI oil in the marketplace. Increasing Dakota, as well as Canada and North in Western capacity limits, have also pipeline and transportation WTI oil prices are an important benchmark for the an important WTI oil prices are the however, revenue; oil market and provincial in Saskatchewan is heavier majority of oil produced further sour than WTI oil and requires and more WTI oil prices are forecast to average US$59.75 per forecast WTI oil prices are consistent with private sector in 2019-20, barrel This is a US$2.75 the upcoming year. for forecasts average price the 2018-19 from decrease per barrel US$62.50. of forecast 42 Budget 2019-20 NET INCOMEFROMGOVERNMENTBUSINESSENTERPRISES* • • • For 2019-20itisestimatedthat: risk isquantifiedthroughout theyear. revenue forecast willalwaysbesubjecttorisk.This key externalfactors,thenon-renewable resource forecasts. Butbecauseofthevolatilenature ofthese prudent andincorporateanumberofprivatesector assumptions usedtodeveloptheresource forecast are In anattempttominimizeriskthefiscalplan, * Total Other Workers’ CompensationBoard SaskEnergy SaskTel SaskPower Saskatchewan LiquorandGaming Authority Saskatchewan GovernmentInsurance Saskatchewan GamingCorporation Fund Saskatchewan Auto (Millions ofDollars)
change innon-renewable resource revenue. exchange rateresults inanestimated $28million a 1U.S.centchangeinthefiscal-yearaverage in potashroyalties; and, price results inanestimated$54 millionchange change inthefiscal-yearaveragerealized potash a US$10perKCltonne(C$21K $15 millionchangeinoilroyalties; average WTIoilpriceresults in anestimated a US$1perbarrel changeinthefiscal-year Including consolidationadjustments.
2 O tonne)
to higherexpectedSaskatchewanelectricitysalesand income isbudgetedtobeup$47millionmainlydue budgeted torepeat. Inaddition, SaskPowernet one-time investmentlossesin2018-19thatare not and theAutoFund,respectively, primarilydueto and $51millionattheWorkers’ CompensationBoard forecast, largely reflecting increases of$143million a $171millionincrease from thecurrent 2018-19 accounts for7percentofbudgetedrevenue. Thisis is forecast atnearly$1.1billionin2019-20and Government BusinessEnterprise(GBE)netincome Business Enterprises Net IncomefromGovernment gas marketingvolumes. return tonormalweatherconditions andmore typical decrease atSaskEnergy, primarilyduetoanexpected These increases are partially offset bya$53million exported electricityvolumestoAlberta. 2016-17 Actual (246.4) 845.9 145.6 130.1 478.1 188.7 53.1 65.2 24.4 7.1
– 2017-18 1,283.5 2016-17TO 2019-20 Actual 109.4 143.5 492.8 210.1 116.7 111.3 17.1 59.4 23.2
Forecast 2018-19
(153.6) 909.4 133.0 208.7 487.2 116.6 29.8 49.8 21.6 16.3
2019-20
Budget 1,080.5 129.5 255.2 477.9 (10.7) 17.0 63.8 59.1 21.8 66.9
OTHER OWN-SOURCE REVENUE – 2016-17 TO 2019-20
2016-17 2017-18 2018-19 2019-20 (Millions of Dollars) Actual Actual Forecast Budget Fees 1,213.0 1,141.1 1,148.5 1,132.2 Insurance 303.6 282.7 300.6 302.6 Investment Income 91.8 113.9 103.9 102.9 Transfers from Other Governments 96.8 74.8 102.3 92.3 Miscellaneous 469.0 463.5 387.4 432.1 Total 2,174.2 2,076.0 2,042.7 2,062.1
Other Own-Source Revenue Transfers from the Federal Government
Other own-source revenue includes fees for services Federal transfers are budgeted at nearly $2.5 billion and licenses, proceeds from the sale of goods and in 2019-20 and account for 16 per cent of total services, investment income, fees collected by revenue. This is a $36 million decrease from the insurance entities and other miscellaneous sources current 2018-19 forecast. The Canada Health Transfer of revenue. Most government organizations generate and Canada Social Transfer increase by $61 million own-source revenue. Other own-source revenue is and $15 million, respectively, in 2019-20. These budgeted at $2.1 billion in 2019-20 and accounts increases are more than offset by a $111 million for 14 per cent of total revenue. This is a modest decrease in all other federal contributions, largely $19 million, or 0.9 per cent, increase from 2018-19. due to the winding down of several federal-provincial infrastructure programs, federal disaster assistance in 2018-19 that is not budgeted to repeat and lower federal AgriStability contributions.
FEDERAL TRANSFERS – 2016-17 TO 2019-20
2016-17 2017-18 2018-19 2019-20 (Millions of Dollars) Actual Actual Forecast Budget Canada Health Transfer 1,138.8 1,176.1 1,203.3 1,263.8 Canada Social Transfer 422.7 435.3 441.6 456.6 Other 1,393.3 808.9 857.8 746.8 Total 2,954.8 2,420.3 2,502.7 2,467.2 Budget 2019-20
43 44 Budget 2019-20 • • is asfollows: The compositionofexpenseinthe2019-20Budget 2018-19 Budget. an increase of$382million,or 2.6percent,from the Total expenseisbudgetedat$15.0billionin2019-20, EXPENSE 2019-20 EXPENSERECONCILIATION COMPOSITION OF2019-20EXPENSE Total Expense Transportation Social Servicesand Assistance Protection ofPersonsandProperty Other Health Environment andNaturalResources Education Economic Development Debt Charges Community Development Agriculture (Millions ofDollars)
Education, $3.3billion,or22percent; Health, $5.9billion,or39percent;
Health: 39%
Other: 13% 14,608.8 Education: 22% 2018-19 1,381.3 5,765.3 3,263.3 Budget 519.3 689.9 439.7 251.7 230.2 654.6 642.6 770.9 • • • • • Debt Charges: 5% all others,nearly$2.2billion,or13percent. Debt Charges, $694million,or5percent;and, or 5percent; Protection ofPersonsandProperty, $701million, Agriculture, $842million,or6 percent; 10 percent; andAssistance,$1.4billion,or Social Services Assistance: 10% Social Servicesand
and Property: 5% Protection of Persons Agriculture: 6% 14,990.7 2019-20 1,432.7 5,888.2 3,282.5 Budget 532.1 701.1 445.8 263.9 227.3 694.4 681.2 841.5
Dollars 122.9 381.9 12.8 51.4 12.2 19.2 39.8 38.6 70.6 11.2 (2.9) 6.1 Change
Per Cent
(1.3) 2.5 3.7 1.6 1.4 2.1 4.8 0.6 6.1 6.0 9.2 2.6
Budget 2019-20 45
including primarily for
15.0 Budget 2019-20 14.7 primarily higher amortization 14.3
2017-18 largely reflecting salary and operating reflecting largely 14.8
All Other
15.2 n $11.2 million, or 1.6 per cent, increase in n $11.2 million, or 1.6 per cent, increase a $12.2 million, or 4.8 per cent, increase in a $12.2 million, or 4.8 per cent, increase and Natural Resources, Environment mitigation initiatives and wildfire for increases a higher grant to SARCAN; and, a of Persons and Property, Protection the theme. across utilization and salary pressures increased funding for federal-provincial increased new including the programs, infrastructure Program, Infrastructure Investing in Canada sharing; revenue in municipal and an increase in 0.6 per cent, increase a $19.2 million, or Education, of Education, partially at the Boards increases Superannuation Plan by lower Teachers’ offset expense; in a $12.8 million, or 2.5 per cent, increase Transportation, for the and operating and maintenance payments and Regina Bypass at the Ministry of Highways Infrastructure; 2015-16 • • In total, health, education and social services and in assistance account for 71 per cent of expense 2019-20. • • 14.0
13.8
2013-14
14.3
13.7 2011-12 reflecting Health/Education/Social Services largely due to largely
13.3
12.5 2009-10 largely due to higher largely 11.3 primarily due to higher budgeted
reflecting increases for the Jim Pattison increases reflecting 9.9 2007-08
8 6 4 2 0
16 14 12 10 a $38.6 million, or 6.0 per cent, increase in a $38.6 million, or 6.0 per cent, increase Community Development, Dollars of Billions income assistance and supports for persons with income assistance and supports disabilities; a $39.8 million, or 6.1 per cent, increase in Debt Charges, Saskatchewan Builds Capital Plan debt; Agriculture, in indemnities and an increase insurance crop AgriStability payments; in a $51.4 million, or 3.7 per cent, increase Social ServicesAssistance, and enhancements to child and family services, health initiatives, higher utilization of physician health initiatives, higher services, medical services and benefits programs, and inflationary and other general operating the sector; across pressures in a $70.6 million, or 9.2 per cent, increase a $122.9 million, or 2.1 per cent, increase in 2.1 per cent, increase a $122.9 million, or Health, and the Hospital of Saskatchewan Children’s mental Battleford, North Saskatchewan Hospital Note: Boards of Education did not become part of the Government Reporting Entity until 2009-10. Accounts Source: Saskatchewan Budget, Public • THEME EXPENSE BY • • • include: • Significant budget-over-budget expense changes Significant budget-over-budget 46 Budget 2019-20 NON-RENEWABLE RESOURCEREVENUE grow by2.1percent,onaverage. Over themediumterm,totalrevenue isforecast to assumptions. term economicoutlookanditsunderlying budget andisconsistentwiththecurrent medium- the impactofallmeasures announced inthisyear’s The medium-termfinancialoutlookincorporates MEDIUM-TERM OUTLOOK KEY MEDIUM-TERMNON-RENEWABLE RESOURCE FORECAST ASSUMPTIONS Well-head OilPrice(C$/barrel) Light-Heavy Differential (%ofWTI) WTI OilPrice(US$/barrel) 2 1 Canadian Dollar(UScents) Potash Price(minenetback,C$/K Potash Price(minenetback,US$/KCltonne) Oil Production(millionbarrels) Potash Sales(millionK Millions of Dollars Ministry ofFinancecalculationsderivedfromcalendar-yearforecasts. The averagepriceperbarrelofSaskatchewanlight,mediumandheavyoil. 1,000 2,000 3,000 4,000 5,000 0 1990-91
2 O tonnes)
eeu lf xs Share ofRevenue(rightaxis) Revenue (leftaxis)
1
2000-01 2 2 O tonne)
2 2
–
1990-91TO 2022-23
forecast toincrease overtheforecast horizon. head oilprices.Potashprices,inU.S.dollars,are also differential overthesametimeperiodalsoliftswell- assumed decrease inthelight-heavy oilprice period, reaching US$70.75in 2022-23, andan oil pricesare forecast toincrease overtheforecast respectively, between2019-20and2022-23.WTI forecast togrow by1.9percentand1.6cent, Non-renewable resource revenue andtaxrevenue are
2010-11 2019-20 77.19 173.1 55.46 59.75 24.8 14.1 470 221
2020-21 78.79 175.6 56.73 61.50 22.9 14.4 469 225
2019-20 2021-22 79.60 177.2 60.88 64.75 Forecast 19.9 14.6 473 230
2022-23 0 10 20 30 40 50 80.05 179.7 68.49 70.75
17.0
15.0 479 234 Per Cent Per
COMPOSITION OF REVENUE – 1990-91 TO 2022-23
Forecast 16
14
12
10
8
6 Billions of Dollars 4
2
0 1990-91 2000-01 2010-11 2019-20
Taxes Other Own-Sources Federal Transfers Non-Renewable Resources
However, an increase in the value of the Canadian at a combined annual rate of 2.7 per cent. Federal dollar offsets some of these price gains. transfers are projected to increase 2.8 per cent per year, on average, largely due to legislated increases Non-renewable resource revenue accounts for in the Canada Health Transfer and the Canada Social 12 per cent of total revenue over the medium term. Transfer. This is significantly lower than its share in recent history. For example, over the three-year period Expense growth over the medium term is forecast 2006-07 to 2008-09, non-renewable resources at 2.0 per cent per year, slightly less than revenue averaged 25 per cent of total revenue, including growth. 32 per cent in 2008-09. As a result, the $34 million surplus in 2019-20 is Other own sources, including GBE net income and forecast to modestly increase over the subsequent other own-source revenue, are projected to increase three years, reaching $84 million in 2022-23.
MEDIUM-TERM FINANCIAL OUTLOOK (Millions of Dollars) 2019-20 2020-21 2021-22 2022-23 Revenue 15,025 15,339 15,668 15,992 Expense 14,991 15,290 15,596 15,908
Surplus 34 49 72 84 Budget 2019-20
47 48 Budget 2019-20 2019-20 BORROWING AND DEBT by revenue from thoseCrown businessactivities. activities ofCrown corporations, anditissupported debt hasbeenincurred tofinance thebusiness by thesebusinessenterprises.Inotherwords, this are expectedtoberepaid from cashflowsgenerated these entitiesare classifiedseparately becausethey activity. Amountsborrowed by, orspecificallyfor organizations outsidegovernmentastheirprincipal toindividualsand to sellgoodsandservices GBEs havethefinancialandoperatingauthority • • The Province’s debtconsistsof: As atMarch31 PUBLIC DEBT
Billions of Dollars self-sufficient governmentorganizations. amounts borrowed by, orspecificallyonbehalfof Government BusinessEnterpriseSpecificDebt (GBE) SpecificDebt;and, other thanGovernmentBusinessEnterprise General Debt 10 15 20 25 30 0 5 2008 10.5 3.4 6.8 0.3 2009 . 4.1 4.1 . 3.9 3.6 7.9 0.2
– alldebtofgovernmententities 2010 8.2 0.2 Operating GRF 2011 8.3 4.0 0.2 4.1
2012 4.4 . . . . 4.1 3.8 3.8 3.8 3.8 0.3 8.5 2013 9.4 5.3 0.3 Business Enterprises Debt ofGovernment 2014 10.7 6.4 0.5
2015 1713.4 11.7
7.3 0.6
–
2016 1.3
8.0 2017 16.0 $151.1 millionlowerthanestimated,dueto Public debtatMarch 31,2019isforecast tobe • • comprised of: Public debtasreported inthisbudgetpaperis utility Crown corporations. Capital Planand$0.6billionofincreased debtforthe infrastructure assetsunderthe SaskatchewanBuilds the GeneralRevenueFund(GRF)tofinance is primarilydueto$1.2billionofnewdebtenable $1.8 billionfrom theMarch 31,2019forecast. This For 2019-20,publicdebtisexpectedtoincrease by decreased debtforGBEs. 8.3 2.3 5.4 has beensetasidefortherepayment ofdebt. Sinking Funds lenders; Gross Debt 2018 17.6 8.6 5.8 3.2 Organizations Service Government Other Debtof 2019 19.9 6.2 9.1 4.6 less
2020 –
21.7 9.7 . 6.2 6.2 5.8 theamountofmoneyowedto – theamountofmoneywhich 2021 23.1 10.1 6.8
2022 10.5 24.6 7.9 6.2
2023 11.0 26.0 6.2 8.8
Budget 2019-20 49
24.5
2019
1,161.9
1,061.8 9,259.8
Budget
11,937.0
10,775.1
10,321.6
20,034.9
6.5 9.4 27.6 11.7 2023
22.3
2019
1,163.3
1,060.2 9,107.4 6.8 8.7
11,939.7 27.3 11.8 2022
10,776.4
10,167.6
19,883.8
Forecast
7.8 7.1 26.5 11.6 2021
19.7
2020 7.3 6.9 25.8 11.6 2020
1,265.6
1,165.9 9,757.8
Budget
11,934.1
13,199.7
10,923.7
21,691.9 5.6 7.5 24.1 11.0 2019
– – –
– Other Debt of GovernmentService Organizations 7.2 4.1 22.2 10.9 2018
GBE
Debt
2020
1,135.5 9,513.2
9,513.2
Specific
10,648.7 7.1 3.0 21.1 11.0 2017
5.1 1.7 16.8 10.0 2016
30.4
19.7
Debt
2020
275.0
244.6 8.8 0.7 14.1
1,265.6 2015
General
11,934.1
13,199.7
12,178.7
0.6 4.6 4.6 7.7 12.9
2014 Debt of Government Business Enterprises
0.4 4.9 6.8 12.1 2013
5.9 5.1 0.4 11.4 2012 0.4 6.3 6.5 13.2 2011 GRF Operating
6.5 0.3 6.9 13.7 2010
0.4 6.1
5.3 11.8 2009 6.4 0.6 20.0 13.0 2008
5 0
30 25 20 15 10 Cent Per
(Millions of Dollars) Government Service Organizations Gross Debt Sinking Funds Government Service Organization Debt Government Business Enterprises Gross Debt Sinking Funds Government Business Enterprise Debt
Public Debt
Guaranteed Debt
DEBT As at March 31 As at March 31 PUBLIC DEBT AS A % OF GDP A AS PUBLIC DEBT 50 Budget 2019-20 SINKING FUNDS estimated todeclineby$45.3millionin2019-20. of entitiesthatconducttheirownborrowing is Transportation HubAuthority. Collectively, thedebt Education, theWater SecurityAgencyandtheGlobal as theSaskatchewanHealthAuthority, Boards of A smallamountofborrowing is donebyentitiessuch expenditures. amount istoassistwiththefinancingofcapital maturing debt,andthemajorityofremaining $203.3 millionisforthepurposeofrefinancing estimated tobe$2,264.7million.Ofthisamount, The GRF’s 2019-20borrowing requirements are on thisdebt. is responsible fortheprincipalandinterest payments borrows onbehalfofagovernmententity, theentity Most borrowing isdonebytheGRF. Where theGRF BORROWING Total SinkingFunds GBE SpecificDebt General Debt (Millions ofDollars)
Forecast 2,223.5 1,060.2 1,163.3 2019
Contributions
contributions fortheyear. primarily duetotheestimatedlevelofsinkingfund by $208.0millionto$2,431.5million.Thisis For 2019-20,sinkingfundsare expectedtoincrease lower-than-expected earningsduring2018-19. estimated. Thevarianceisprimarilyduetoslightly $2,223.5 million,whichis$0.2millionlowerthan Sinking fundsatMarch 31,2019are forecasted tobe retirement ofaportion ofthegovernment’s debt. Sinking fundsare moniessetasidefortheorderly SINKING FUNDS 230.7 143.1 2020 87.6
Earnings 2020 57.2 27.6 29.6
Redemptions
(79.9) (70.4) 2020 (9.5)
Budget 2,431.5 1,165.9 1,265.6 2020
Budget 2019-20 51
5.5 430.8 197.8 634.1
2018-19
Forecast
7.9 494.7 191.8 694.4 Budget 2019-20
which is third lowest among provinces on a per lowest among provinces which is third of GDP. capita basis and as a percentage the following page illustrates the trend on The chart GDP. of for net debt as a percentage and forecast NET DEBT position is financial of a province’s Another measure all of a province’s aggregates “net debt.” Net debt the financial assets that it has liabilities, and subtracts obligations. these at its disposal to repay users of public sector rating agencies and other Credit typically consider both debt and financial information financial of a province’s net debt in their assessment condition. that the The table on the following page shows net debt at Saskatchewan’s of Province to be $12.1 billion, 31, 2019 is forecasted March
1
GENERAL DEBT GENERAL General Debt – – Debt charges do not include amounts pertaining to Government Business Enterprise Specific Debt. These amounts are reflected in Debt charges do not include amounts pertaining to Government Business Enterprise Specific Debt. Net Income from Government Business Enterprises.
Other General Debt Debt Charges 1 (Millions of Dollars) General Revenue Fund Pension Liabilities DEBT CHARGES liabilities. A one percentage point increase in interest point increase liabilities. A one percentage levels assumed in the Budget rates for a full year from in 2019-20 by debt charges would increase $55.3 million. approximately is accrued on pension liabilities. is accrued on pension rates of assume interest The 2019-20 debt charges transactions borrowing 2.0 per cent for short-term An and 3.5 per cent for long-term borrowings. of 3.1 per cent is assumed for pension rate interest DEBT CHARGES debt charges payments, In addition to interest debt, such general gross to related include other costs and discounts, of premiums, as the amortization that also include interest charges commissions. Debt 52 Budget 2019-20 As atMarch31 NET DEBTTO GDP As atMarch31 NET DEBTCOMPARISON Source: Jurisdictions’ mostrecentpublicly availabledata 3 2 1 Newfoundland andLabrador Prince EdwardIsland Nova Scotia New Brunswick Qu Ontario Manitoba Saskatchewan Alberta British Columbia
Percentage of GDP
10 12 14 16 Based onStatisticsCanadaestimatesofGDP andConferenceBoardforecasts. Population datafromStatisticsCanadaforpopulationsasofJanuary1,2018. Rank orderedwith1=lowest. 0 2 4 6 8 é bec 2008 11.2
2009 5.2
2010 5.9
2011
6.0
2012 6.1
2016-17 181.8 314.1 2013 14.9 13.8 23.3 10.2 37.8 13.6 6.6 2.2 8.9 Billions ofDollars
2014 5.5 2017-18
176.5 323.8 2015 15.0 13.9 24.4 19.3 41.9 14.7 11.2 6.7 2.1
2016 9.9 2018-19
13.4 2017 175.2 346.1 15.2 14.1 25.2 12.1 28.1 43.6 15.4 2.3 2018 14.2
2019 14.8 Dollars 14,774 15,804 18,303 20,884 24,162 18,645 10,440 29,256 6,530 8,733 Per Capita 2020 14.7
Rank 2021 14.3 10 2 2018-19
4 5 6 8 9 7 3 1 2 2022 13.8 1
Per CentofGDP 2023 13.1
32.6 34.6 38.5 40.2 40.3 34.2 14.8 14.6 45.2 8.2 %
Rank 10 4 6 7 8 9 5 3 1 2 1 3
Budget 2019-20 53
or call 1-800-667-6102. on call for emergencies, attending required meetings attending required on call for emergencies, training. in required and participating to maintain consistency with the rules related To individuals who also similar federal tax credits, of the employee services these as a regular provide tax credit. will not be eligible for the organization at least 200 hours of Individuals who perform services and combined volunteer firefighting services medical first responder volunteer emergency credits. will be able to claim one of the two tax honoraria for their volunteer Individuals who receive service duties may claim either the emergency but not both. income exemption or the tax credit, information on these tax credits, For further of Finance website at to the Ministry refer www.saskatchewan.ca/budget The 2019-20 Budget announces the creation of new announces the creation The 2019-20 Budget Firefighters for Volunteer tax credits non-refundable Medical First Emergency and for Volunteer with the 2020 taxation year. Responders, beginning at least 200 hours of eligible Individuals performing volunteer services by the a year (as certified in managing the volunteer services) will be organization amount. Eligible able to claim a $3,000 tax credit to and being volunteer services of responding consist
2019-20 REVENUE INITIATIVES REVENUE 2019-20
other public agency. mass tragedies. an provides The income tax system already exemption of up to $1,000 for honoraria that a a municipality or from volunteer might receive Volunteers are a critical part of the ability of a critical part are Volunteers to emergency Saskatchewan communities to respond These in rural areas. situations, particularly safety the volunteers put themselves at risk to protect to and well-being of their neighbours and to respond from the Province’s income tax roll. In addition, PIT income tax roll. the Province’s from by a half-point on July 1, 2017. reduced rates were since 2007 are introduced In total, PIT reductions almost $610 million in annual income tax providing savings to Saskatchewan residents. Personal Income Tax Credits for Personal Income Tax Emergency Responders Volunteer Personal Income Enhancements to Saskatchewan’s in 2008 and 2011 exemptions introduced (PIT) Tax 112,000 Saskatchewan residents almost removed announced in the Budget. However, it is only a announced in the Budget. However, is advised to contact the summary and the reader ministries and consult the enacting responsible for specific details. legislation or regulation support Saskatchewan communities and to ensure the and to ensure Saskatchewan communities support on its a fair and balanced return receives Province wealth. resource detail the tax measures This paper describes in more The 2019-20 Budget introduces revenue initiatives to revenue introduces The 2019-20 Budget 54 Budget 2019-20 ensure afairandbalancedreturn tothepeopleof This measure willsimplifythePPTcalculationand payment ortheprofit tax. will nolongerbedeductibleindeterminingthebase potash production, andCrown andfreehold royalties Saskatchewan Resource Credit iseliminatedfor To address thissituation,effective April1,2019,the very littlerevenue. has graduallyeroded suchthat itcurrently generates deductions hascontinuedtogrow, thebasepayment fixed dollaramountpertonneandthevalueofthese of potashsales).Asthebasepaymentrateissetata Resource Credit (equalto0.75percentofthevalue royalties paidandtheamount oftheSaskatchewan reduced bytheamountofCrown andfreehold payment pertonneofsales.However, itiscurrently The basepaymentisintendedtobeasimpleflat prices. changes inbothproduction levels andcommodity Saskatchewan’s potashrevenues are sensitive to and theprofit taxare intendedtoensure that tax component.Incombination,thebasepayment consists ofabasepaymentcomponentandprofit modern PPTstructure wasintroduced in1990and Royalty hasbeeninplacesince1960,whilethe and freehold landsinSaskatchewan.TheCrown Tax (PPT)onpotashproduced from bothCrown produced from Crown landsandaPotashProduction The Province leviesaCrown Royaltyonpotash Potash ProductionTax at 306-787-4765. Tax, contacttheMinistryofEnergy andResources For further informationonthePotashProduction Saskatchewan fortheirvaluablepotashresource.
Budget 2019-20 55
processing (M&P) profits. In addition, Saskatchewan (M&P) profits. processing to assist Credit Investment Tax a refundable provides M&P companies that invest in qualifying new or used M&P assets for use in the province. and a Research Saskatchewan also provides of in support Credit Development (R&D) Tax qualifying R&D activities. provincial marginal tax rates directly to taxable tax rates directly marginal provincial tax purposes. income as defined for federal income deductions that contribute to the federal As a result, as the determination of taxable income, such Savings Plan Retirement deduction for Registered Saskatchewan income tax contributions, also affect revenue. personal income tax In addition, Saskatchewan’s income non-refundable system has distinct provincial the personal circumstances that recognize tax credits and including family-based credits of the taxpayer, credits. disability-related income tax system also delivers Saskatchewan’s designed to encourage specific several programs taxpayer behaviours, including investment incentives incentives. and retention tax competitiveness, Saskatchewan levies improve To a lower income tax rate on small businesses and a special income tax rate on manufacturing and their sales taxes with the GST, since those taxes apply the GST, their sales taxes with services range of goods and purchased to a broader by families. intended to the PST are Other exemptions from key sectors of the provincial particular support including manufacturing and farming. economy, personal income tax system applies Saskatchewan’s
SASKATCHEWAN’S TAX EXPENDITURES TAX SASKATCHEWAN’S the taxes paid by families consuming these items. in PST exemptions are Some of Saskatchewan’s (GST) contrast to the federal Goods and Services Tax that have harmonized and the sales taxes of provinces have become fundamental elements of the tax system. (PST) does not Sales Tax Provincial Saskatchewan’s essential items such as basic apply to certain natural gas, residential residential groceries, reducing materials, thereby electricity and reading RATIONALE FOR TAX EXPENDITURES FOR TAX RATIONALE achieve a number of objectives, can expenditures Tax such as enhancing the fairness of the tax system or In types of economic activity. certain promoting pursuing these objectives, some tax expenditures government and they affect the fiscal position in the government and they affect This paper provides expenditures. same way as direct impacts of several of estimates of the revenue tax expenditures. Saskatchewan’s While tax expenditures are usually absorbed in the are While tax expenditures in not presented estimates and are overall revenue they spending programs, the same way as direct generated by a amount of revenue the reduce as exemptions, deductions, tax credits, preferential as exemptions, deductions, tax credits, they provide together, tax rates or deferrals. Taken businesses, assistance to a variety of individuals and and small including families, farmers, senior citizens businesses. Although the primary purpose of taxation is to raise Although the primary some of their social governments also attain revenue, the taxes paid by and economic goals by reducing commonly are These reductions taxpayers. certain and include such measures called “tax expenditures” INTRODUCTION 56 Budget 2019-20 “Publications andReports.” Canada websiteatwww.fin.gc.ca andclickon tax expenditures are invitedtovisittheFinance examining thefederalgovernment’s presentation of Saskatchewan’s revenue. Readersinterested in federal taxexpenditures have an impacton federal definitionoftaxableincome,manythe and corporateincometaxesare baseduponthe federal taxsystem.SinceSaskatchewan’s personal presentation ontaxexpenditures thatare part ofthe The federalgovernmentproduces adetailed TAX EXPENDITURES GOVERNMENT OFCANADA • • • take severalforms. expenditure results inassociatedcosts.Thesecosts economic objectives,theintroduction ofanytax While taxexpenditures important socialand serve ASSOCIATED COSTS categories ofconsumerexpenditure. providing preferential treatment forcertain in consumerandothereconomicbehaviourby Third, taxexpenditures maycreate distortions governments. costs forbusinesses,consumersand increased administrativeeffort andcompliance complexity ofthetaxsystem,leadingto Second, taxexpenditures may addtothe government’s financialposition. collected andhaveasignificantimpacton expenditures result inthereduction ofrevenue First, there isthecostofforgone revenue. Tax
personal incometaxcredits for volunteeremergency estimates thatwere reported lastyear. Thenew updates tothe2016,2017and2018taxexpenditure investment intentions.Thisyear’s tablesalsoprovide population, employmentandincome,retail salesand assumptions regarding theexpectedchangesin derived from thesedatasources byapplying data andincometaxassessmentdata.Estimatesare calculated usingtaxcollectiondata,StatisticsCanada tax expenditures oftheGovernmentSaskatchewan, The followingtablesprovide estimatesofthemajor EXPENDITURE ACCOUNTS 2019 SASKATCHEWAN TAX year’s taxexpenditure accounts. taxation yearandare therefore notincludedinthis Initiatives, are effective beginninginthe2020 the technicalpaperentitled2019-20Revenue responders, whichare describedingreater detailin
Budget 2019-20 57
1.1 2.2 0.3 0.1 72.4 27.8 47.0 13.9 47.8 73.6 27.0 85.0 23.1 2019 2019 162.5 232.5 132.7 135.5 Estimate Estimate
0.2 1.1 2.1 0.3 22.8 72.0 27.3 46.5 12.9 46.8 72.7 29.6 85.0 2018 2018 228.3 132.6 133.3 157.7 Revised Revised
2.1 0.2 1.3 0.2 11.4 86.2 21.6 87.7 26.7 45.0 43.3 64.4 28.8 82.9 2017 2017 201.2 109.0 153.3 Revised Revised
– 1.7 0.2 1.6 9.4 0.2 18.6 92.0 26.2 35.7 37.0 49.9 23.2 87.3 2016 2016 116.3 182.7 129.6 Actual Revised
......
......
......
Exemption for primary producers Exemption for farm activity Exemption for heating fuels Saskatchewan Low-Income Tax Credit Tax Saskatchewan Low-Income Electricity Natural gas Farm machinery and repair parts pesticide and seed Fertilizer, Direct agents telephone services Toll-free Agriculture, life and health insurance Basic groceries Prescription drugs Reading materials Personal services Feminine hygiene products Used goods – exemption amounts
3. 1. 2. 1. 7. 8. 9. 1. 2. 3. 4. 5. 6.
11.
10. 12. 13.
Fuel Tax Other Exemptions Provincial Sales Tax 2019 Government of Saskatchewan 2019 Government Accounts Expenditure Tax Expenditures in Millions of Dollars) Tax of (Value 58 Budget 2019-20 Corporation IncomeTax Other Saskatchewan Tax Measures 15. Saskatchewan Non-Refundable Tax Credits Deductions fromIncome Personal IncomeTax 16. 14. 13. 12. 10.
11.
4. 3. 2. 1. 4. 3. 2. 1. 9. 8. 7. 6. 5. 4. 3. 2. 1. 8. 7. 6. 5. 4. 3. 2. 1.
Research andDevelopment Tax Credit Investment Tax CreditforManufacturingandProcessing Manufacturing andProcessingProfits Tax Reduction Lower taxrateforsmallbusiness Graduate RetentionProgram Tax Credit Political Contributions Tax Credit Mineral Exploration Tax Credit Labour-sponsored Venture Capital Tax Credit First-time homebuyerstaxcredit Charitable contributionstaxcredit Medical expensestaxcredit Caregiver taxcredit Disability taxcredit Student loaninteresttaxcredit Tuition andeducation taxcredit Pension incometaxcredit Employment Insurancepremiumstaxcredit Canada PensionPlancontributionstaxcredit Dependent childtaxcredit Supplement totheagetaxcredit Age taxcredit Equivalent-to-spouse taxcredit Spousal taxcredit Basic personaltaxcredit Capital gainsdeduction Allowable employmentexpenses Carrying charges Moving expenses Child careexpenses Annual union,professionalorlikedues Registered RetirementSavingsPlancontributions Registered PensionPlancontributions ......
......
......
......
......
......
1,068.2 Actual Actual 145.5 418.0 109.5 2016 2016 56.2 77.5 12.9 17.8 13.8 16.9 97.8 10.1 32.7 10.9 58.0 12.1 44.0 27.3 22.4 43.5 13.5 30.4 86.6 14.9 36.0 24.6 1.7 2.0 0.1 5.3 2.9 0.7
Revised Revised 1,072.2 146.7 100.0 377.9 110.2 2017 2017 57.0 78.6 12.9 17.9 13.8 17.2 17.8 27.0 64.0 12.2 44.5 27.3 22.5 21.8 13.6 30.5 86.9 15.0 36.0 24.6 11.9 1.6 1.2 0.2 5.2 2.8 0.7
Revised Revised 1,073.0 146.9 100.7 478.5 110.3 2018 2018 56.6 78.7 13.0 18.0 13.9 17.4 36.0 15.0 72.7 12.0 44.3 27.2 22.9 13.7 30.5 86.9 14.9 36.2 24.5 11.5 1.7 1.3 0.5 5.2 3.0 0.7 –
Estimate Estimate 1,078.4 150.2 103.7 487.5 111.4 2019 2019 56.7 79.4 13.5 18.7 14.4 17.8 12.0 36.0 15.0 78.0 12.0 45.5 27.9 23.5 13.9 30.9 87.6 15.2 36.2 25.0 1.8 1.6 0.5 5.3 3.1 0.7 –
Budget 2019-20 59
A single person earning $40,000 will pay A single person earning $40,000 will pay taxes. $3,071 in total provincial will pay A two-income family earning $75,000 taxes. $4,605 in total provincial will pay A two-income family earning $100,000 taxes. $7,578 in total provincial A two-income family earning $125,000 will pay taxes. $10,697 in total provincial a family of two adults and two dependent a family of two adults with an annual owning its own home, children, and, family income of $100,000; and two dependent a family of two adults its own home, with an annual owning children, family income of $125,000. In 2019, Saskatchewan individuals and families will In 2019, Saskatchewan individuals and very competitive taxes that are pay total provincial with a with those paid in other Canadian cities, for all four ranking among the lowest in Canada family situations. representative • • • • Regina also ranks favourably with other cities in taxes and Canada when comparing provincial family situations, utilities. For the representative Regina again ranks among the lowest overall combined taxes and utilities of the 10 cities surveyed. • • FOR 2019 RANKING SASKATCHEWAN’S
OF TAXES AND UTILITIES OF TAXES
2019 INTERCITY COMPARISON COMPARISON INTERCITY 2019
children, owning its own home, with an annual children, family income of $75,000; a single person, living in rental accommodation, a single person, living in rental with an annual income of $40,000; a family of two adults and two dependent levels have been calculated to provide a representative levels have been calculated to provide comparison: • • those families would face in other major cities across those families would face in other major the country. taxes and utilities costs associated The provincial and income with the following family characteristics compare the attractiveness of living in different parts attractiveness of living in different the compare of Canada. the total cost For the purposes of such a comparison, families of these taxes and utilities for representative with the costs living in Regina has been compared Other important factors that affect quality of life are factors that affect Other important and the level of taxation and the cost of utilities cost of auto insurance. Calculating the combined way to taxes and utilities is a reliable provincial A number of factors contribute to the quality of life A number of factors and families in Saskatchewan enjoyed by individuals Canada. For example, access to excellent and across education and social services is a key part health care, of the overall quality of life. INTRODUCTION 60 Budget 2019-20 Total Taxes UtilityCosts Total Household Auto Insurance Telephone Electricity Home Heating Household UtilityCosts Taxes Total Provincial Gasoline Tax Sales Tax Health Premiums Rebates Tax Creditsand Income Tax Provincial Provincial Taxes (Values inDollars) Family at$75,000 Total Income 2019 IntercityComparisonof Taxes andUtilities andUtilities Total Taxes UtilityCosts Total Household Auto Insurance Telephone Electricity Household UtilityCosts Taxes Total Provincial Gasoline Tax Sales Tax Health Premiums Rebates Tax Creditsand Income Tax Provincial Provincial Taxes (Values inDollars) Single Personat$40,000 Total Income 2019 IntercityComparisonof Taxes andUtilities andUtilities
Vancouver Vancouver
5,885 3,090 2,255 2,795 1,357 9,905 4,298 2,255 5,607 2,230 1,811
362 473 333 740 390 362 821 860 666 900 (25) 0
Calgary Calgary 5,759 4,050 3,015 1,709 1,812 7,673 5,267 3,015 1,156 2,406 2,858
(300) (846) 361 735 394 361 674 197 0 0 0 0
Regina Regina 5,468 2,397 1,219 3,071 2,250 8,405 3,800 1,219 1,418 4,605 1,890 2,415 (144) 258 905 300 258 920 150 815 0 0 0
Winnipeg Winnipeg 10,835 4,224 3,152 3,255 1,287 7,580 2,248 5,052 6,374 2,150 1,287 140 932 379 779 810 280 379 484 0 0 0 0
Toronto Toronto 13,460 3,035 1,192 1,359 7,832 5,203 1,283 5,628 2,865 1,719 9,517 6,482 5,203 (113) 147 450 378 968 294 750 378 901
0
Montréal Montréal 11,074 (3,168) 4,439 1,502 2,759 4,479 1,899 1,577 6,595 3,604 1,232 4,483 7,134 2,695 1,899 (660) 222 616 378 625 444 378 418
13,969 4,104 1,513 2,636 5,439 1,621 1,008 2,432 8,530 3,627 4,653 6,761 2,657 1,621 Saint Saint John John (200) 155 378 310 378 658 (60) 0 0
Halifax Halifax 15,305 4,859 1,513 3,191 5,993 1,992 1,372 2,249 9,312 3,627 5,375 8,064 3,205 1,992 155 380 310 380 833 0 0 0 0
Charlotte- Charlotte-
town town 15,431 4,608 1,513 3,097 6,166 1,754 1,453 2,579 9,265 3,627 5,322 7,735 3,127 1,754 (160) 158 380 316 380 993
0 0 0
St. John’s St. John’s 15,677 3,854 1,513 2,582 6,984 2,991 1,083 2,531 8,693 3,627 4,648 7,920 4,066 2,991 (450) 209 379 418 379 696 0 0 0
Budget 2019-20 61
0 0 0 0 418 379 418 379 4,423 2,531 1,083 2,991 6,984 7,568 4,021 2,531 1,083 2,991 6,984 11,101 15,942 22,926 12,007 18,991 St. John’s St. John’s
0 0 0 0 380 380 316 316 2,579 1,453 1,754 6,166 2,579 1,453 1,754 6,166 4,423 8,432 4,021 23,041 18,935 12,136 16,875 12,769 town town
Charlotte- Charlotte-
0 0 0 0 380 380 310 310 2,249 1,372 1,992 5,993 2,249 1,372 1,992 5,993 4,423 8,841 4,021 17,511 23,504 19,165 12,778 13,172 Halifax Halifax
0 0 0 0 378 378 310 310 John John Saint Saint 2,432 1,008 1,621 5,439 2,432 1,008 1,621 5,439 4,423 7,705 4,021 11,057 21,229 17,475 15,790 12,036
625 378 625 378 444 444 1,577 1,899 4,479 1,577 1,899 4,479 1,232 4,395 8,348 1,232 3,995 (1,335) (2,168) 11,851 21,622 16,330 12,407 17,143 Montréal Montréal
0 0 968 378 968 378 294 960 294 1,283 5,203 7,832 1,283 5,203 7,832 6,151 1,200 3,490 4,181 3,173 8,608 11,135 18,967 16,440 Toronto Toronto
0 0 0 0 810 779 379 810 779 379 280 280 1,287 3,255 1,287 3,255 2,742 8,120 2,493 11,584 17,861 14,148 14,606 10,893 Winnipeg Winnipeg
0 0 0 0 905 258 905 258 300 300 8,075 2,322 1,418 1,219 3,800 2,093 7,578 1,418 1,219 3,800 5,185 11,378 14,497 10,697 Regina Regina
0 0 0 0 0 394 735 361 394 735 361 (460)
7,647 8,041 1,156 3,015 5,267 5,148 1,156 3,015 5,267 5,214 13,308 10,415 Calgary Calgary
0 0 900 666 860 821 362 900 666 860 821 362
5,820 2,165 9,551 2,255 4,298 1,968 7,561 2,255 4,298 4,027 11,859 13,849
Vancouver Vancouver
Telephone Auto Insurance Household Total Utility Costs Taxes Total and Utilities Sales Tax Gasoline Tax Provincial Total Taxes Household Utility Costs Home Heating Electricity Provincial Taxes Provincial Tax Income Credits and Tax Rebates Health Premiums and Utilities Taxes 2019 Intercity Comparison of Income Total Family at $125,000 in Dollars) (Values Total Household Total Utility Costs Taxes Total and Utilities Total Provincial Total Taxes Household Utility Costs Home Heating Electricity Telephone Auto Insurance Provincial Taxes Provincial Tax Income Credits and Tax Rebates Health Premiums Sales Tax Gasoline Tax 2019 Intercity Comparison of Taxes and Utilities and Utilities Taxes of 2019 Intercity Comparison Income Total Family at $100,000 in Dollars) (Values 62 Budget 2019-20 16.5 percentabatementfrom federal incometax. Québec ChildCare ExpenseTax Credit andbythe personal incometaxhasbeenreduced bythe Insurance contributioncredits. Gross Québec Pension Plan/QuébecPlanandEmployment non-refundable credits usedincludetheCanada for twodependentchildren (ages 6and12).Personal the familieseachclaim$3,000inchildcare expenses spouses ata60percentto40ratioandthat It isassumedthatfamilyincomeearnedbyboth income levelforeachrepresentative familysituation. Provincial IncomeTax taxes andsurcharges. Tax,Services provincial salestaxesandmunicipal year. Theutilityfigures excludefederalGoodsand of attemptingtoforecast utilityratesforthecoming methodology hasbeenchosenduetotheuncertainty actual utilityratesforthe2018calendaryear. This insurance) represent acostcomparisonofthe (electricity, homeheating,telephoneandauto Household charges forthebasicutilityservices year usingknownchangesasofMarch 5,2019. Tax estimatesare calculatedforthe2019calendar TAXES AND UTILITIES–NOTES identified from theenactinglegislation,withtotal Canada). Thesalestaxbaseineachprovince was Survey ofHouseholdSpending2014 baskets atthetotalincomelevelsfrom the Sales Tax insurance andmedicalservices. Health Premiums to reduce theimpactofsalestaxes. provincial incometaxcredits andrebates designed Tax Credits andRebates isbaseduponaveragefamilyexpenditure are annualpremiums forhospital
iscalculatedbasedonthe refer torefundable
(Statistics
CANSIM
the BTUequivalentconsumptionoffueloil. Charlottetown andSt.John’s, thefigures represent consumption levelof2,800 Home Heating applied tothepurchase ofgasoline. commissions aswellprovincial carbontaxes families. Figures includecharges leviedbytransit 1,000 litres byasingleperson,and2,000litres for Gasoline Tax was thenestimatedbasedontaxableexpenditures. consumption patterns.Thesalestaxineachprovince expenditures adjustedtoreflect Saskatchewan jurisdictions. longer hasaccesstorateinformationinthese unchanged from lastyear’s comparisonasSGIno Saint John,Halifax,CharlottetownandSt.John’s are all applicablejurisdictions.Autoinsuranceratesfor Driver” discounts/rebates havebeenfactored infor profiles tocreate thisindex.Theimpactsof“Good Consumers’ AssociationofCanadadeveloped34 and drivingrecord ataconsistentpointintime.The had thesamecar, samecoverage,claimshistory what driverswouldpayineachjurisdictionifthey is basedontheactualinsuranceratesquotedfor by theConsumers’AssociationofCanada.Theindex developed bySGImodelledaftertheindex Auto Insurance individual residences. Telephone 8,100 kWhforhomeowners. consumption levelof4,584kWhforrenters and Electricity charges are basedonanannual charges are ratesfor thebasicservice
isbasedonannualconsumptionof charges are basedonanannual isbasedonacompositeindex
m
3 ofnaturalgas.For
Budget 2019-20 63
1.9
0.9
8.5
(9.8) (9.9)
(3.4)
(0.9)
10.1
30.0
22.4 42.4
12.1
(51.3)
(66.3)
(15.7)
(19.7)
(31.6)
114.1
(207.4)
Mid-Year
Change from
Third Quarter
36.2 40.7
86.8
62.5 21.1 42.4 42.4 18.9 22.1
12.1
(45.0)
(66.3) (17.6) (20.5) (15.7)
(14.6)
223.5
101.4
(168.6)
Budget
Third
909.4
704.6 625.0 634.1 214.5
272.8
482.1 708.8
531.4
(379.9)
7,169.9 1,705.6
2,042.7 2,502.7
3,325.8
5,807.7
1,403.4
Quarter
14,330.3
14,710.2
Forecast THIRD QUARTER
770.9 634.8 644.0 230.2
271.9
439.7 700.3
519.3
(348.3)
7,159.8 1,591.5 1,116.8 2,012.7 2,500.8
3,329.2
5,785.3
1,404.3
14,381.6
14,729.9
Mid-Year
Projection and federal transfers. REVENUE UPDATE to be is forecast revenue quarter, At third of $51.3 million is a decrease $14.3 billion. This decline primarily due to a significant mid-year, from net in Government Business Enterprise (GBE) in non- increase by an offset income, partially modest as well as more revenue, resource renewable revenue other own-source tax revenue, in increases
770.9 642.6 654.6 230.2
251.7
439.7 689.9
519.3
(365.3)
7,214.9 1,482.1 1,078.0 2,006.5 2,462.0
3,263.3
5,765.3
1,381.3
Budget
14,243.5
14,608.8 2018-19 BUDGET UPDATE UPDATE BUDGET 2018-19
THIRD QUARTER –
(Millions of Dollars) Revenue Taxation Non-Renewable Resources Non-Renewable Net Income from Government BusinessNet Enterprises Income from Government Other Own-Source Revenue Transfers from the Federal Government from the Federal Transfers
Total Revenue Total
Expense Agriculture Community Development Community Debt Charges Economic Development Education Environment and Natural Resources and Natural Environment Health Other Protection of Persons and PropertyProtection of Persons Social Services and Assistance Transportation
Total Expense Total
Deficit 2018-19 BUDGET UPDATE 2018-19 BUDGET UPDATE Overall, revenue is up $86.8 million from budget is up $86.8 million from Overall, revenue and expense is up $101.4 million. At third quarter, a deficit of $379.9 million is a quarter, At third deterioration from This is a $31.6 million forecast. in revenue, mid-year due to a $51.3 million decrease by a $19.7 million decline in expense. offset partially OVERVIEW 64 Budget 2019-20 2018-19 NON-RENEWABLE RESOURCESFORECAST ASSUMPTIONS $17.8 milliondeclineacross allothertaxcategories. a $21.0milliondeclineinTobacco Tax, anda reduction inIndividualIncomeTax sincemid-year, These increases are partially offset bya$43.1million ($17.0 million)revenue. Provincial SalesTax ($75.0million)andFuelTax activity hasresulted inhigherforecasts for from mid-year. Stronger-than-expected economic Taxation revenue 2018-19 REVENUERECONCILIATION 2018-19 ThirdQuarterForecast Total ChangefromMid-Year Federal Transfers OtherOwn-SourceRevenue GBENetIncome Non-RenewableResources Forecast ChangesfromMid-Year 2018-19 Mid-Year Projection (Millions ofDollars)
Taxation
WTI Oil Price (US$/barrel) WTI Oil Price Light-Heavy Differential (% of WTI) Well-head (C$/barrel) Oil Price Oil Production (million barrels) Potash Price Potash Price Potash Sales (million K Uranium Price (C$/Kg)Uranium Price Canadian Dollar (US cents)
1
2
The average price per barrel of Saskatchewan light, medium and heavy oil. heavy and medium light, Saskatchewan of barrel per price average The Ministry of Finance calculations derived from calendar-year forecasts. calendar-year from derived calculations Finance of Ministry
(mine netback, US$/KCl tonne) (mine netback, C$/K isforecast toincrease $10.1million
2
2
O tonnes)
1
2
2
O tonne)
2
2
14,330.3 14,381.6
Budget
58.18
54.36 177.7
78.34 (207.4)
22.1
12.6 114.1
191 399
112 (51.3) 30.0 10.1
1.9
Projection
Mid-Year (WTI) oilpriceforecast anda smallincrease inthe largely asaresult ofalowerWest Texas Intermediate forecast todecrease $25.2millionfrom mid-year, At third quarter, oilandnaturalgasrevenue is potash prices. $66.0 million,largely duetohigher-than-budgeted Resource Surcharge revenue isforecast toincrease realized pricesinCanadiandollars. from mid-year, primarilyduehighersalesand Potash revenue isforecast toincrease $66.8million increase $114.1millionfrom mid-year. Non-renewable resources revenue year. expected results inthefinaltwo salesofthefiscal than themid-yearprojection, reflecting higher-than- Finally, Crown landsalesare $6.9millionhigher a lowerexchangerateforecast atthird quarter. factors are partially offset bythepositiveimpactof light-heavy oilpricedifferential. Thesenegative
65.23
56.37 179.2
77.51
31.7
13.1
210 442
111
Forecast
Quarter
Third
62.50
53.70 177.7
76.47
32.2
13.9
211 448
109
Budget
(0.66)
(1.87)
4.32 10.1
1.3
Third Quarter
20 49
Change from
(3)
–
isforecast to
Mid-Year
(2.73)
(2.67)
(1.04)
(1.5)
0.5
0.8
(2)
1 6
Budget 2019-20 65
(9.9) (4.7) 42.4 22.4 12.1 (66.3) (15.7) (19.7)
14,729.9 14,710.2
is forecast to increase $12.1 million to increase is forecast
is forecast to increase $22.4 million from $22.4 million from to increase is forecast expense is forecast to increase $42.4 million to increase expense is forecast Agriculture Debt Charges Other Health
Economic Development Transportation Themes All Other Expense Change from Mid-Year Total 2018-19 Third Quarter Forecast (Millions of Dollars) Projection 2018-19 Mid-Year Forecast Changes from Mid-Year 2018-19 EXPENSE RECONCILIATION Health due to additional utilization largely mid-year, the sector. across pressures Transportation due to higher-than-budgeted largely mid-year, from winter maintenance expense at the Ministry of Highways and Transportation. unchanged from largely All other expense themes are mid-year. Other expense forecast quarter The third mid-year. from for First Nations Land includes $63.5 million $40.3 million will be charged settlements (another opening accumulated surplus), against the 2018-19 of the rest by net savings across offset partially the theme.
is
are forecast are is forecast to increase is forecast
is forecast to decrease to decrease is forecast
are forecast to decrease $9.9 million to decrease forecast are is forecast to decrease $66.3 million from to decrease is forecast
Debt Charges in the due to an increase primarily mid-year, from Superannuation Plan assets market value of Teachers’ costs. and lower General Revenue Fund borrowing payments. Economic Development primarily due to lower mid-year, $15.7 million from Council. contract work at the Saskatchewan Research mid-year. Agriculture insurance primarily due to lower crop mid-year, by higher AgriStability offset indemnities, partially Damage Compensation Program benefits and Wildlife EXPENSE UPDATE to be expense is forecast quarter, At third from $14.7 billion. This is a $19.7 million decrease $30.0 million from mid-year, largely due to higher- largely mid-year, $30.0 million from the across than-expected miscellaneous revenue entity. reporting the federal government from Transfers mid-year. $1.9 million from to increase forecasts for SaskEnergy, Saskatchewan Government for SaskEnergy, forecasts Liquor and Gaming Insurance and Saskatchewan Authority. revenue Other own-source forecast to be $207.4 million lower than mid-year. to be $207.4 million forecast for decreases is responsible Lower investment income $97.4 million at the Workers’ of $157.9 million and Auto Fund, respectively. and the Compensation Board by higher net income offset partially These losses are Government Business Enterprise net income Government Business 66 Budget 2019-20 As atMarch31 2018-19 NETDEBTUPDATE
the 2018-19openingnetdebtposition. capital spending,aswellapositiveadjustmentto specifically asmallerdeficitandlower-than-planned since budgetisprimarilydueto2017-18results, This improvement intheProvince’s netdebtposition budget. March 31,2019,whichis$516.3millionlowerthan financial assets–isforecast tobe$12.1billionat Net debt–thedifference betweenliabilitiesand NET DEBTUPDATE
2
1
Net Debt, End of of End Debt, Net Year
Net Debt, Beginning of of Beginning YearDebt, Net
Increase in Net Debt Net in Increase
Amortization of Government Service Organization Capital Assets Capital Organization Government of Service Amortization
Acquisition of Government Service Organization Capital Assets Capital Organization Government of Service Acquisition
Deficit
(Millions of Dollars) of (Millions
outstanding Treaty Land Entitlement claims. Entitlement Land Treaty outstanding
related to the adoption of new accounting standards in GBEs offset by a $40.3 million prior-period adjustment that recognizes t recognizes that adjustment prior-period million $40.3 a by offset GBEs in standards accounting new of adoption the to related
Net debt as at March 31, 2018, as reported in the 2017-18 Summary Financial Statements, decreased by $48.8 million comprised of comprised million $48.8 by decreased Statements, Financial Summary 2017-18 the in reported as 2018, 31, March at as debt Net Includes disposals and adjustments. and disposals Includes
– THIRDQUARTER
1
12,647.8
11,774.6
Budget
1,118.0
(610.1)
873.2 365.3
2018-19 deficit. primarily theforecasted $14.6millionincrease inthe $18.7 milliondeteriorationincurrent-year results, These improvements are partially offset byan
Projection
Mid-Year
12,253.8
11,288.4
1,202.5
(585.4)
965.4
348.3
Forecast
11,239.6
12,131.5
Quarter
1,113.7
(601.7)
891.9
379.9
Third
2
Budget
(516.3)
(535.0)
Third Quarter Third
Change from Change
18.7
14.6
(4.3)
8.4
Mid-Year
he Province’s obligation for for obligation Province’s he
(122.3)
(48.8)
(73.5)
(16.3)
(88.8)
31.6
an $89.1 million decrease decrease million $89.1 an
SASKATCHEWAN PROVINCIAL BUDGET 19-20
BUDGET FINANCIAL TABLES 68 Budget 2019-20 Totals maynotaddduetorounding. Surplus (Deficit) Total Expense Transportation Social servicesandassistance Protection ofpersonsandproperty Other Health Environment andnaturalresources Education Economic development Debt charges Community development Agriculture Expense Total Revenue Transfers from thefederalgovernment Other own-sourcerevenue Net incomefromgovernmentbusinessenterprises Non-renewable resources Taxation Revenue
For the Year EndedMarch31 Budget GOVERNMENT OFSASKATCHEWAN
......
......
......
......
14,990.7 15,025.1 2019-20 Budget 2,062.1 1,080.5 1,826.8 7,588.5 1,432.7 5,888.2 3,282.5 2,467.2 532.1 701.1 445.8 263.9 227.3 694.4 681.2 841.5 34.4
Forecast 14,710.2 14,330.3 2018-19 2,042.7 1,705.6 7,169.9 1,403.4 5,807.7 3,325.8 2,502.7 (379.9) 909.4 531.4 708.8 482.1 272.8 214.5 634.1 625.0 704.6
(Millions ofDollars)
14,608.8 14,243.5 2018-19 Budget 2,006.5 1,078.0 1,482.1 7,214.9 1,381.3 5,765.3 3,263.3 2,462.0 (365.3) 519.3 689.9 439.7 251.7 230.2 654.6 642.6 770.9
Budget 2019-20 69
610.1 (365.3) (873.2) (223.1) (365.3) (588.4) Budget Budget (1,118.0) 2018-19 2018-19 (11,774.6) (12,647.8) an omprised et by a
tment that 2
1
(Millions of Dollars) (Millions of Dollars) 601.7 224.4 (379.9) (891.9) (379.9) (155.5) (1,113.7) 2018-19 2018-19 Forecast (11,239.6) Forecast (12,131.5)
For the Year Ended March 31 Ended March Year For the For the Year Ended March 31 Year For the 34.4 34.4 655.3 (920.3) (230.6) (155.5) (121.1) Budget Budget 2019-20 2019-20 Statement of Change in Net Debt Statement of Change in Net Statement of Accumulated Deficit Statement of (12,362.1) (12,131.5)
.. 1 ......
......
GOVERNMENT OF SASKATCHEWAN OF GOVERNMENT GOVERNMENT OF SASKATCHEWAN GOVERNMENT ...... Includes disposals and adjustments. by $48.8 million comprised of Net debt as at March 31, 2018, as reported in the 2017-18 Summary Financial Statements, decreased a $40.3 million prior-period adjus by $89.1 million decrease related to the adoption of new accounting standards in GBEs offset Land Entitlement claims. Treaty obligation for outstanding recognizes the Province’s Accumulated surplus as at March 31, 2018, as reported in the 2017-18 Summary Financial Statements, increased by $48.8 million c Accumulated surplus as at March 31, 2018, as reported of new accounting standards in government business enterprises (GBEs) offs of an $89.1 million increase related to the adoption Land Entitlement claims. Treaty obligation for outstanding the Province’s $40.3 million prior-period adjustment that recognizes
1 2 Amortization of government service organization capital assets Increase in Net Debt Net debt, beginning of year Year Net Debt, End of may not add due to rounding. Totals Surplus (Deficit) Acquisition of government service organization capital assets
Accumulated Deficit, End of Year Accumulated Deficit, End of may not add due to rounding. Totals 1 of year Accumulated (deficit) surplus, beginning Surplus (Deficit) 70 Budget 2019-20 3 2 1 Totals maynotaddduetorounding. Total Capital Assets enterprises Government business organizations Government service
As atMarch31 Schedule ofCapital Assets GOVERNMENT OFSASKATCHEWAN As atMarch31 Schedule ofPensionLiabilities GOVERNMENT OFSASKATCHEWAN
1 Totals maynotaddduetorounding. Pension Liabilities,Endof Year Adjustment toaccountforpensioncostsonanaccrualbasis Pension liabilities,beginningofyear
Includes disposalsandadjustments. Includes onlycapitalassetsacquiredbygovernmententities.Capitaltransfers providedtoentitiesoutsidethereportingenti Net bookvalueasatMarch31,2018,reportedinthe2017-18 Pension liabilitiesasatMarch31,2018,reportedinthe2017-18 ......
Net Book March 31 25,697.8 14,467.7 11,230.1
Value 2018
1
...... Additions – 2018-19Forecast 2,548.0 1,434.3 1,113.7
2
Amortization Summary FinancialStatements. Summary FinancialStatements (1,457.2) (855.5) (601.7) ....
3
Net Book March 31 Forecast 26,788.6 15,046.5 11,742.1
Value 2019 2019-20 Budget 6,869.5 7,318.2 (448.7)
Additions .
2,469.3 1,549.0
– 2019-20Budget 920.3
2
Forecast 2018-19 7,318.2 7,658.9 Amortization (340.7)
(Millions ofDollars) (1,545.6) (Millions ofDollars) ty areexpensed. (890.3) (655.3) 1
3
Net Book March 31 2018-19 27,712.3 15,705.2 12,007.1 Budget 7,302.3 7,695.5 Budget
(393.2) Value 2020
GOVERNMENT OF SASKATCHEWAN
Schedule of Public Debt As at March 31
(Millions of Dollars)
Budget Budget GBE Budget Forecast Budget General Specific Public Public Public Debt1 Debt Debt4 Debt4 Debt4 2019-20 2019-20 2019-20 2018-19 2018-19
Government Service Organization (GSO) Debt General Revenue Fund – Operating...... 6,150.0 – 6,150.0 6,150.0 6,150.0 – Saskatchewan Builds Capital Plan2...... 5,404.0 – 5,404.0 4,193.8 4,193.8 Boards of Education ...... 151.2 – 151.2 159.5 166.8 Global Transportation Hub Authority...... 40.2 – 40.2 40.3 35.0 Saskatchewan Health Authority...... 99.3 – 99.3 105.0 98.3 Saskatchewan Housing Corporation ...... 4.8 – 4.8 15.8 15.7 Saskatchewan Immigrant Investor Fund Inc...... 2.6 – 2.6 22.9 22.9 Saskatchewan Opportunities Corporation ...... 51.6 – 51.6 53.0 55.2 Water Security Agency ...... 25.9 – 25.9 31.6 31.6 Other...... 4.5 – 4.5 4.5 5.8
Government Service Organization Debt 11,934.1 – 11,934.1 10,776.4 10,775.1
Government Business Enterprise (GBE) Debt Municipal Financing Corporation of Saskatchewan.... 93.6 112.0 205.6 207.8 207.7 Saskatchewan Gaming Corporation...... – 5.0 5.0 – – Saskatchewan Liquor and Gaming Authority...... – 95.0 95.0 100.0 100.0 Saskatchewan Power Corporation ...... 86.3 6,609.2 6,695.5 6,330.2 6,424.5 Saskatchewan Telecommunications Holding Corporation ...... – 1,138.0 1,138.0 1,070.4 1,046.2 Saskatchewan Water Corporation...... – 86.0 86.0 73.4 87.6 SaskEnergy Incorporated ...... 64.7 1,468.0 1,532.7 1,325.6 1,393.8
Government Business Enterprise Debt3 244.6 9,513.2 9,757.8 9,107.4 9,259.8
Total 12,178.7 9,513.2 21,691.9 19,883.8 20,034.9
Guaranteed Debt 19.7 – 19.7 22.3 24.5 Totals may not add due to rounding.
1 General debt is issued by GSOs and includes issued amounts subsequently transferred to GBEs. 2 General Revenue Fund – Saskatchewan Builds Capital Plan consists of amounts borrowed by the General Revenue Fund to finance investment in infrastructure assets. 3 GBE debt includes both general debt and GBE-specific debt. General debt of GBEs is the amount transferred from the General Revenue Fund to a GBE and recorded as a loan receivable in the Summary Financial Statements. GBE-specific debt is debt issued by, or specifically on behalf of, Budget 2019-20 GBEs. GBE-specific debt is included in “Investment in government business enterprises” in the Summary Financial Statements. 4 Public debt is shown net of sinking funds.
71 72 Budget 2019-20 Totals maynot addduetorounding. Total Revenue Total Transfers fromtheFederalGovernment Other Canada Social Transfer Canada Health Transfer Transfers fromtheFederal Government Total Own-Source Total OtherOwn-SourceRevenue Miscellaneous Transfers fromothergovernments Investment income Insurance Fees Other Own-SourceRevenue Total NetIncomefromGovernment BusinessEnterprises Consolidation adjustments Saskatchewan Workers' CompensationBoard SaskEnergy Incorporated Saskatchewan Water Corporation Saskatchewan Telecommunications HoldingCorporation Saskatchewan PowerCorporation Saskatchewan LiquorandGaming Authority Saskatchewan GovernmentInsurance Saskatchewan GamingCorporation Fund Saskatchewan Auto Municipal FinancingCorporationofSaskatchewan Net IncomefromGovernmentBusinessEnterprises Total Non-RenewableResources Other Resource surcharge Potash Oil andnaturalgas Crown landsales Non-Renewable Resources Total Taxation Other Tobacco Provincial sales Property Individual income Fuel Corporation income Taxation Own-Source
For the Year EndedMarch31 Schedule ofRevenue GOVERNMENT OFSASKATCHEWAN
......
......
......
......
......
......
......
......
......
......
......
......
......
15,025.1 12,557.9 2019-20 Budget 2,555.7 2,467.2 1,263.8 2,062.1 1,132.2 1,080.5 1,826.8 7,588.5 2,304.7 768.0 568.7 729.2 746.8 456.6 432.1 102.9 302.6 129.5 255.2 477.9 385.0 618.6 691.1 427.7 234.5 (10.7) 92.3 63.8 59.1 21.8 66.9 85.5 46.6 9.3 6.7 1.0
Forecast 14,330.3 11,827.6 2018-19 2,343.0 2,502.7 1,203.3 2,042.7 1,148.5 1,705.6 7,169.9 2,230.0 (153.6) 759.5 563.1 613.5 857.8 441.6 387.4 102.3 103.9 300.6 909.4 133.0 208.7 487.2 383.3 501.6 693.0 421.5 239.3 116.6 22.3 49.8 21.6 16.3 70.2 57.5 6.6 0.9
(Millions ofDollars)
14,243.5 2018-19 11,781.5 Budget 2,441.2 2,462.0 1,202.4 2,006.5 1,157.3 1,078.0 1,482.1 7,214.9 2,155.0 759.3 546.1 621.1 818.3 441.3 376.6 288.2 133.0 176.7 481.4 317.3 308.0 700.1 431.9 260.3 118.0 88.8 95.6 15.3 68.4 60.7 23.0 92.8 63.9 (5.5) 6.2 0.8
Budget 2019-20 73
debt of others that the funds set aside for the repayment public debt net of loans to Crown
gross debt net of sinking funds. gross Glossary of Financial Terms Glossary of Financial borrowings through the issuance of through borrowings
debt issued by the General Revenue Fund (GRF) specifically on behalf of a GBE where the the government expects to realize GBE and settle the the from receivable external debt simultaneously. debt issued by GBEs; or
- Guaranteed Debt: if the others to repay government has agreed default. Gross Debt: Gross notes and debt instruments such as promissory debentures. Sinking Funds: of debt. Public Debt: General Debt: corporations for Government Business Enterprise (GBE) specific debt. GBE Specific Debt: - • balances and transactions are eliminated. balances and transactions are Debt the issuance of debt through Obligations incurred liabilities instruments. Debt does not include other such as accounts payable or pension obligations. used to describe debt include: Terms • • • • • Consolidation account for government serviceThe method used to Summary Budget. (GSOs) in the organizations adjusted to the Financial accounts of the GSOs are 1 of the basis of accounting described in note adjusted Summary Financial Statements and the combined with amounts for other GSOs amounts are Inter-organization and government partnerships.
GOVERNMENT OF SASKATCHEWAN OF GOVERNMENT
An asset with physical substance that has an used to be economic life extending beyond one year, on a continuing basis and not for sale in the ordinary course of operations. experienced by pension plans, and certain amounts experienced by pension plans, and certain also amortized. to financial instruments are relating Capital Asset The systematic process of allocating an amount to The systematic process expense over a period. Capital assets are or revenue expense over their expected remaining to amortized useful lives. Actuarial gains and losses, such as those (1905), plus any adjustments that were charged (1905), plus any adjustments that were the accumulated surplus. It is calculated to directly between total assets and liabilities. as the difference Amortization the difference between total assets and liabilities. the difference Accumulated Surplus has exceeded expense The amount by which revenue incorporation of provincial the beginning from The amount by which expense has exceeded revenue The amount by which incorporation the beginning of provincial from charged (1905), plus any adjustments that were the accumulated deficit. It is calculated as to directly Accumulated Deficit Debt Charges Government Reporting Entity
Costs associated with general debt, pension liabilities, The set of organizations that are either controlled by obligations under long-term financing arrangements government (GSOs and GBEs) or subject to shared such as public-private partnerships (P3s) and capital control (government partnerships). lease obligations. Debt charges include interest, foreign exchange gains and losses, discounts, fees Government Service Organization (GSO) and commissions. An organization that is controlled by government, Deficit except those designated as GBEs or government partnerships. GSOs are consolidated in the Summary The amount by which expense exceeds revenue for Budget. a fiscal period. Modified Equity General Revenue Fund (GRF) The method used to account for GBEs in the The primary operational account for the government Summary Budget. The government’s share of GBE net through which all provincial monies under the direct earnings or losses is included in budgeted revenue. authority of the Legislative Assembly are collected The government’s investment, which is originally and disbursed. The GRF is a GSO and is included in recorded at cost, is adjusted annually to include the the government reporting entity. net earnings or losses and other net equity changes of the GBE. Government Business Enterprise (GBE) Net Debt An organization that is controlled by the government, is self-sufficient and has the financial and operating The difference between liabilities and financial assets. authority to sell goods and services to individuals and Net debt represents the future revenue required to organizations outside the government reporting entity pay for past transactions or events. as its principal activity. GBEs are recorded in the Summary Budget using the modified equity method. Pension Liability
Government Partnership An actuarial estimate of discounted future payments to be made to retirees under government pension A contractual arrangement between the government plans, net of plan assets. and one or more partners outside the government reporting entity where the partners share, on an equitable basis, the risks and benefits of the partnership. Government partnerships are proportionately consolidated in the Summary Budget. Budget 2019-20 74 Budget 2019-20 75
.
www.saskatchewan.ca/budget Summary Budget main financial plan that accounts for Government’s the planned financial and extent of the full nature in the government activities of all organizations entity. reporting Surplus exceeds expense for The amount by which revenue a fiscal period.
For more information on Budget Basics, visit For more infrastructure for citizens. The liabilities arising from infrastructure classified as obligations under P3 arrangements are long-term financing arrangements. Public Private Partnership (P3) arrangement in the form of a long-term A partnership between the public agreement performance-based public sector and the private sector to deliver Summary Financial Statements and the government’s Summary Financial of the balances is combined with share proportionate Inter- and other partnerships. balances for GSOs eliminated. balances and transactions are organization Proportionate Consolidation account for government The method used to Financial in the Summary Budget. partnerships adjusted are partnership accounts of the government described in note 1 of the to the basis of accounting