Annual Report for 2018-19

saskbuilds.ca

Table of Contents

Letters of Transmittal ...... 1

Addendum ...... 2

Introduction ...... 3 SaskBuilds Overview ...... 4 Progress in 2018-19 ...... 6 Management's Responsibilities ...... 9 Independent Auditor's Report ...... 10 2018-19 Financial Overview ...... 12 For More Information ...... 20

Letters of Transmittal

His Honour, the Honourable W. Thomas Molloy, O.C., S.O.M. Lieutenant Governor of Saskatchewan

May it Please Your Honour:

I respectfully submit the Annual Report for SaskBuilds Corporation for the fiscal year ending March 31, 2019.

SaskBuilds leads the delivery of large and complex infrastructure projects for public sector

clients, coordinates long-term integrated capital planning for executive government and The Honourable drives public procurement modernization to support the province’s growth and the quality Gordon S. Wyant, Q.C. of life of its people. Minister Responsible and

Chair of SaskBuilds Board

Gordon S. Wyant, Q.C. Minister Responsible for SaskBuilds and Priority Saskatchewan Chair, SaskBuilds Board of Directors

The Honourable Gordon S. Wyant, Q.C., Minister Responsible for SaskBuilds and Priority Saskatchewan, and Chair of SaskBuilds Board

Dear Minister:

I have the honour of submitting the Annual Report for SaskBuilds Corporation for the fiscal year ending March 31, 2019.

As the President and Chief Executive Officer, I take responsibility for the financial administration and management control of SaskBuilds. Furthermore, I acknowledge my Kyle Toffan responsibility for this report and provide assurance on the accuracy, completeness and President and Chief reliability of the information contained within. Executive Officer

Kyle Toffan President and Chief Executive Officer SaskBuilds

Annual Report for 2018-19 1

Addendum

This report, including the transmittal letter, was prepared before the recent decease of His Honour, the Honourable Thomas Molloy, O.C., S.O.M., on July 2, 2019. As the office of the Lieutenant Governor is vacant at the time of transmittal, no change has been made to the transmittal letter.

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Introduction

This annual report for SaskBuilds presents the corporation’s results for the fiscal year ending March 31, 2019. It provides results of publicly committed strategies, key actions and performance measures identified in the SaskBuilds Plan for 2018-19. It also reflects progress toward commitments from the Government Direction for 2018-19, the Saskatchewan Plan for Growth – Vision 2020 and Beyond, throne speeches and directives of the SaskBuilds Board. The annual report demonstrates SaskBuilds’ commitment to effective public performance reporting, transparency and accountability to the public. SaskBuilds was created as a Treasury Board Crown Corporation on October 17, 2012. This is its seventh annual report.

Alignment with Government’s Direction SaskBuilds’ activities in 2018-19 align with Saskatchewan’s vision and four goals:

Saskatchewan’s Vision “… to be the best place in Canada – to live, to work, to start a business, to get an education, to raise a family and to build a life.”

Sustaining growth and Meeting the challenges of Securing a better quality of Delivering responsive opportunities for growth life for all Saskatchewan and responsible Saskatchewan people people government

Together, all organizations support the achievement of Saskatchewan’s four goals and work towards a secure and prosperous Saskatchewan.

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SaskBuilds Overview

SaskBuilds is a Treasury Board Crown Corporation with a mandate to: • Integrate, coordinate and prioritize infrastructure spending of the Province of Saskatchewan; • Provide advice and recommendations for infrastructure planning and delivery by advancing major projects through contract oversight, innovative approaches to development and alternative financing models such as public-private partnerships; and • Lead transformative procurements changes across ministries through Priority Saskatchewan. In 2018-19, it was announced that a Single Procurement Service would be implemented for Executive Government, and that the service would be housed within SaskBuilds. While the new service became operational on April 1, 2019, planning work to ensure a smooth implementation was undertaken during 2018-19.

Vision Strategic provincial growth through leadership in infrastructure.

Mission To drive innovation and efficiency in infrastructure planning, financing, delivery and procurement modernization, to derive greater value, timelines and accountability for the Saskatchewan people.

Team In 2018-19, SaskBuilds had a public service team of 23 full-time equivalent employees, whose expertise included project management, engineering, policy, legal, accounting and administration. SaskBuilds has a passion for solving problems and building teams to develop meaningful and innovate solutions.

Governance SaskBuilds is lead by a Board of Directors. Membership on the Board as of March 31, 2019 included:

• Hon. Gordon S. Wyant, Q.C., Chair • Larry Doke, MLA • Hon. Donna Harpauer, Vice-Chair • Eric Olauson, MLA • Hon. Ken Cheveldayoff • Laura Ross, MLA • Hon. Warren Kaeding • Steven Bonk, MLA

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Infrastructure Development SaskBuilds is driving infrastructure innovation through the development and delivery of complex projects as well as establishing and leading government's integrated capital planning process. As part of this role, SaskBuilds also coordinates federal infrastructure funding under a long-term agreement with the Government of Canada. SaskBuilds has worked with ministry partners to deliver four public-private partnership (P3) projects worth more than $3 billion to meet Saskatchewan’s infrastructure needs. These four projects are achieving savings of more than $500 million (M), and have supported more than 12,000 construction jobs. Two projects continued in the operations phase in 2018-19: The Meadows, a 225-bed long-term care centre in Swift Current and the Joint-Use Schools Project which comprises 18 elementary schools on nine joint-use sites in Regina, Saskatoon, Warman and Martensville. A third project, the Saskatchewan Hospital North Battleford (SHNB), achieved service commencement on September 6, 2018. This new 284-bed provincial psychiatric facility replaced the existing 156-bed hospital. The new facility includes 188 psychiatric rehabilitation beds and a 96-bed secure wing for offenders living with mental health issues. This project is an innovative partnership between the Ministries of Health, Corrections and Policing, Central Services, the Saskatchewan Health Authority, and SaskBuilds. Following service commencement in September, all patients from the existing facility moved to Premier Scott Moe, patient Keri, and Battlefords MLA Herb the new SHNB in November 2018. Corrections began a phased-in move of its Cox declare the new SHNB officially open. patients in December 2018. SHNB patients and staff joined members of the (Photo courtesy Saskatchewan Health Authority) community and government to celebrate its official opening on March 8, 2019. While the SHNB project encountered some delays, it has proven that P3 risk transfer works to protect government and taxpayers by ensuring that risks and associated costs are the responsibility of Access Prairies Partnership (APP), the private sector partners on the project. When APP was not able to meet the original service commencement date of June 1, 2018 the unique protections of the P3 project agreement ensured that government retained $3.9M in forfeited service payments, plus recovered $484,000 for delay-related expenses. The fourth P3 project, the Regina Bypass, continued construction in 2018-19, and remains on schedule for substantial completion in October 2019. Integrated capital planning enables government to take a strategic approach to identifying, prioritizing and funding infrastructure investments. SaskBuilds leads government's annual integrated capital planning process, working closely with ministries and Crowns to ensure that decision makers have the best information possible to help meet Saskatchewan's infrastructure needs now and into the future.

Priority Saskatchewan Priority Saskatchewan was created in 2014 to ensure that public procurement in Saskatchewan is fair, open, transparent, and based on international best practice. Priority Saskatchewan is committed to ongoing consultation with industry and stakeholders and continuous procurement improvement. In 2018-19, Priority Saskatchewan continued to work with both public and private sector stakeholders to modernize procurement and ensure that public procurement processes treat Saskatchewan suppliers fairly. This work included ensuring the implementation and use of the suite of simplified procurement templates across government, and the delivery of best value procurement training sessions to more than 600 public servants and private sector stakeholders.

In 2018-19, Priority Saskatchewan also participated in the planning and preparation work to ensure a smooth implementation of the Single Procurement Service in 2019-20.

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Progress in 2018-19

Government Goals

Sustaining growth and Meeting the challenges of Securing a better quality Delivering responsive and opportunities for growth of life for all responsible government Saskatchewan people Saskatchewan people

Priority Saskatchewan was established in June 2014 to identify opportunities to level the procurement playing field for Saskatchewan businesses.

SaskBuilds Goal: Effective and efficient public sector procurement that treats Saskatchewan vendors fairly. Strategy Improve government and crown procurement using best practices and engagement of public and private stakeholders. Key Actions • Consults with Saskatchewan industry and government partners to identify new elements of the Procurement Transformation Action Plan (PTAP). PTAP new initiatives include: o Procurement from First Nations development companies; and o Develop Saskatchewan suppliers. • Build knowledge and awareness of procurement professionals on best practices in procurement.

Results In the last year, Priority Saskatchewan engaged with stakeholders to ensure that procurement processes were fair, open, transparent and based on best practice.

More than 600 public sector staff members received training through Priority Saskatchewan in 2018-19. Courses are designed to increase awareness of best value procurement and provide staff with tools, techniques and resources to ensure best value in public procurement.

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Government Goals

Saskatchewan Plan for Growth directed SaskBuilds to provide a central focus within the provincial government to co-ordinate infrastructure planning and delivery.

SaskBuilds Goal: Saskatchewan has an integrated infrastructure plan. Strategy Improve capital planning to ensure it is based on best practice and aligns with government priorities. Key Actions and Results • Develop a Provincial Infrastructure Vision and Strategy including leading and coordinating federal infrastructure funding negotiations; • Develop a cross-government asset management framework, including consistent policies, methodologies and a data management plan; and • Develop a centre of excellence for capital planning by offering strategic learning and development sessions for practitioners.

Results On October 3, 2018, SaskBuilds signed the Canada-Saskatchewan Integrated Bilateral Agreement for the Investing in Canada Infrastructure Program. Supported by the Integrated Capital Planning process, this 10-year program will be coordinated by SaskBuilds. The Integrated Capital Planning team supported ministries and agencies to meet the objectives and requirements for annual capital plans. The integrated capital plan was developed and delivered for consideration as part of government’s annual budget process. In collaboration with ministry partners, SaskBuilds developed an asset management framework to prioritize and manage risks associated with provincial infrastructure. Minister Responsible for SaskBuilds and Priority Saskatchewan SaskBuilds continues to lead Communities of Practice in both capital Gordon Wyant (seated, right) and Minister of Government planning and asset management, ensuring that best practices and Relations Warren Kaeding (standing, right) join federal colleagues learning is shared across government. in announcing the Canada-Saskatchewan Integrated Bilateral Agreement (October 2018).

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Government Goals

The Saskatchewan Plan for Growth directed SaskBuilds to drive innovation in infrastructure financing, design and delivery, including P3s.

SaskBuilds Goal: Complex infrastructure projects delivered on-time and on-budget that meet the need of Saskatchewan people. Strategy Improve large and complex infrastructure project delivery through innovative solutions. Key Actions • Lead planning and procurement of major capital infrastructure projects as directed by government; and • Develop alternative procurement and contract management knowledge and capacity. Strategy Ensure effective project oversight and comprehensive contract management on major capital infrastructure projects. Key Actions • Develop expertise on oversight of the contract lifecycle; and • Provide oversight on major capital projects as directed by government. Results Diverging diamond at Pilot Butte (Photo courtesy Regina Bypass Partners) In November 2018, SaskBuilds held a one-day symposium for Government of Saskatchewan employees on alternative project delivery, procurement and project management. More than 80 attendees from infrastructure, capital planning and project management branches from 14 different ministries and agencies participated in the symposium which included industry-led presentations and a moderated panel discussion of P3 project owners.

The SaskBuilds project team leveraged lessons learned on the contract lifecycle from The Meadows and Joint-Use Schools projects to inform oversight of current projects and incorporate feedback into the Integrated Capital Planning business case template - this supports better decision-making for government.

In 2018-19, the Saskatchewan Hospital North Battleford project was delivered on-budget with 3-month delay in service commencement. The Regina Bypass is scheduled for substantial completion in October 2019 and is on-budget.

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Management’s Responsibilities

The accompanying financial statements, and related financial information throughout the Annual Report, has been prepared by management in accordance with Canadian public sector accounting standards. Management is responsible for the integrity, objectivity and reliability of the financial statements. The preparation of the statements necessarily includes some amounts that are based on the best estimates and judgments of management.

SaskBuilds’ management has established and maintains a system of internal controls that provides reasonable assurance that transactions are recorded and executed in compliance with legislation and authority; assets are safeguarded; there is an effective segregation of duties and responsibilities; and reliable financial records are maintained. Jennifer Ehrmantraut, CPA, CMA The Provincial Auditor has audited SaskBuilds’ financial statements and conducted a review of internal Chief Financial Officer accounting policies and procedures to the extent required to enable them to express an opinion on the SaskBuilds fairness of presentation of SaskBuilds’ financial statements.

The Board of Directors of SaskBuilds is responsible for overseeing management’s performance of its financial responsibilities and has reviewed and approved these financial statements.

Jennifer Ehrmantraut, CPA, CMA Chief Financial Officer SaskBuilds

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Independent Auditor’s Report

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Annual Report for 2018-19 11

2018-19 Financial Overview

Statement 1

Statement of Financial Position As at March 31

2019 2018 Financial Assets Due from General Revenue Fund (Note 3) $ 2,578,987 $ 1,389,364 Accounts Receivable 117,547 5,470 GST Receivable - 242 2,696,534 1,395,076

Liabilities Accounts Payable and Accrued Liabilities 348,154 315,950 Net Financial Assets (Statement 3) 2,348,380 1,079,126

Non-Financial Assets Prepaid Expenses 14,451 9,190 Tangible Capital Assets (Note 8) 4,118 27,484 18,569 36,674 Accumulated Surplus (Statement 2) $ 2,366,949 $ 1,115,800

Contractual Rights (Note 9)

(See accompanying notes to the financial statements)

Approved by the Board:

Honourable Gordon Wyant, Q.C. Chair

Kyle Toffan President and Chief Executive Officer

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2018-19 Financial Overview

Statement 2

Statement of Operations and Accumulated Surplus For the year ended March 31

2019 2019 2018 Budget (Note 4) Actual Actual Revenue Transfers from the General Revenue Fund $ 4,880,000 $ 4,880,000 $ 4,513,000 Interest Earned (Note 3) - 20,133 10,304 Miscellaneous Revenue - 6,127 1,813 4,880,000 4,906,260 4,525,117 Expenses (Note 7) Operating 4,067,000 3,441,402 3,273,391 Planning, Procurement and Implementation 813,000 213,709 490,489 4,880,000 3,655,111 3,763,880 Annual Surplus (Statement 3) - 1,251,149 761,237 Accumulated Surplus, Beginning of Year 1,115,800 1,115,800 354,563 Accumulated Surplus, End of Year (Statement 1) $ 1,115,800 $ 2,366,949 $ 1,115,800

(See accompanying notes to the financial statements)

Annual Report for 2018-19 13

2018-19 Financial Overview

Statement 3

Statement of Change in Net Financial Assets For the year ended March 31

2019 2018 Annual Surplus (Statement 2) $ 1,251,149 $ 761,237 (Acquisition) Use of Prepaid Expenses (5,261) 11,734 (Acquisition) of Tangible Capital Assets (Note 8) (2,595) - Amortization of Tangible Capital Assets (Note 8) 25,961 43,557 Increase (Decrease) in Financial Assets 1,269,254 816,528

Net Financial Assets, Beginning of Year 1,079,126 262,598 Net Financial Assets, End of Year (Statement 1) $ 2,348,380 $ 1,079,126

(See accompanying notes to the financial statements)

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2018-19 Financial Overview

Statement 4

Statement of Cash Flows For the year ended March 31

2019 2018 Cash (Used In) Provided by Operating Activities Annual Surplus $ 1,251,149 $ 761,237 Non-Cash Items Amortization of Tangible Capital Assets 25,961 43,557 Net Change in Cash Items (Increase) Decrease in Accounts Receivable (112,077) 17,666 Decrease in GST Receivable 242 18 (Increase) Decrease in Prepaid Expenses (5,261) 11,734 Increase (Decrease) in Accounts Payable and Accrued Liabilities 32,204 (221,532) 1,192,218 612,680 Cash (Used In) Capital Activities Purchase of Tangible Capital Assets (2,595) - Increase in Cash Equivalents 1,189,623 612,680

Due From General Revenue Fund, Beginning of Year 1,389,364 776,684 Due From General Revenue Fund, End of Year (Statement 1) $ 2,578,987 $ 1,389,364

(See accompanying notes to the financial statements)

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2018-19 Financial Overview

Notes to the Financial Statements For the year ended March 31, 2019

1. Status of SaskBuilds Corporation

SaskBuilds Corporation was established by Order in Council 550/2012 on October 17, 2012.

SaskBuilds Corporation was created to integrate, coordinate and prioritize infrastructure spending of the Province of Saskatchewan. SaskBuilds provides advice and recommendations for advancing major infrastructure projects through innovative approaches to infrastructure development and alternative financing models such as public-private partnerships. SaskBuilds is a corporate body eligible to receive monies primarily appropriated by the Legislature for these purposes.

Priority Saskatchewan was created as a branch of SaskBuilds in June 2014 and is responsible for leading a coordinated approach to procurement process improvement across government and the Crown sector. This mandate will help ensure Saskatchewan businesses are treated fairly when bidding on government and Crown contracts.

In September 2018, SaskBuilds' mandate was expanded by Order in Council 539-2018 to include the centralization of procurement for Executive Government. The Single Procurement Service will be effective April 1, 2019 and will be responsible to advise on, determine and recommend the most effective and appropriate methods for modernizing, advancing and conducting public procurement. The division will also undertake, coordinate, manage and oversee public procurement.

In October 2018, the Minister Responsible for SaskBuilds signed the Canada-Saskatchewan Integrated Bilateral Agreement for the Investing in Canada Infrastructure Program, which would see up to $896,323,007 invested over 10 years in key areas including public transit, green and social infrastructure, transportation infrastructure, and infrastructure in rural and northern communities.

2. Significant Accounting Policies

These financial statements are prepared using Canadian Public Sector Accounting Standards and reflect the following significant accounting principles:

a) Revenue Revenue is recognized in the period in which the transactions or events occurred that give rise to the revenue. Government transfers are recognized in the period the transfer is authorized and any eligibility criteria is met.

b) Expenses Expenses represent the cost of resources consumed during the period.

c) Measurement Uncertainty The preparation of financial statements in accordance with Canadian Public Sector Accounting Standards requires management to make estimates and assumptions that affect the reported amount of financial assets and liabilities and disclosure of contingent assets and liabilities during the reporting period. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in the Statement of Operations and Accumulated Surplus in the period in which they become known.

d) Adoption of New Accounting Standards SaskBuilds did not adopt any new Canadian Public Sector Accounting Standards during this period.

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2018-19 Financial Overview

e) Tangible Capital Assets Tangible capital assets are recorded at cost and are amortized over their useful life once they are in service. Amortization is recorded on a straight line basis as follows: Leasehold and Occupancy Improvements lesser of useful life or lease term Office Furniture and Equipment 5 years

3. Due from the General Revenue Fund

SaskBuilds' bank account is included in the Consolidated Offset Bank Concentration arrangement for the Government of Saskatchewan. Interest received of $20,133 (2018 - $10,304) was calculated and paid quarterly on SaskBuilds' average daily account balance at a 30-day interest rate with an annual average of 1.54% (2018 - 0.87%).

4. Budget Approval

The budget figures are presented for comparison purposes: the SaskBuilds 2018-19 Budget is per SaskBuilds - Vote 86, and acknowledged by SaskBuilds Board on October 12, 2017.

5. Related Parties

These financial statements include routine transactions with related parties. SaskBuilds is related to all Saskatchewan Crown agencies such as ministries, corporations, boards and commissions under the common control of the Government of Saskatchewan. Related parties also include key management personnel of SaskBuilds.

The Ministry of Central Services provides purchasing, risk management, and records management to SaskBuilds without charge. The Ministry of Central Services charges accommodation and property management services under a lease agreement. The Ministry of Central Services, Information Technology Division provides SaskBuilds with information technology services under a service level agreement.

The Public Service Commission provides SaskBuilds with human resource administration and payroll services under a service level agreement.

The Ministry of Highways and Infrastructure provides SaskBuilds with financial and administration services under a service level agreement.

The Executive Council provides SaskBuilds with electronic media monitoring under a memorandum of understanding.

Related party transactions to March 31, 2019 include the following:

2019 2018 Accounts Receivable $ 117,517 $ 4,587 Accounts Payable and Accrued Liabilities 134,373 136,733 Revenue 4,904,423 4,523,304 Expenses $ 1,071,175 $ 1,092,260

Routine operating transactions with related parties are recorded at the rates charged by those organizations and are settled on normal trade terms. In addition, SaskBuilds pays Provincial Sales Tax to the Saskatchewan Ministry of Finance on all its taxable purchases.

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2018-19 Financial Overview

6. Financial Instruments

SaskBuilds' financial instruments include: Due from the General Revenue Fund, Accounts Receivable, Accounts Payable and Accrued Liabilities. The carrying amount of these instruments approximates fair value due to their short-term nature. These instruments have no material interest or credit risk.

7. Expenses by Object

2019 2018 a) Operating Administration $ 328,519 $ 305,259 Advertising 6,010 4,708 Amortization 25,961 43,557 Professional Services 110,372 114,410 Rent of Space 299,970 397,029 Salaries and Benefits 2,632,439 2,375,571 Travel 38,131 32,857

$ 3,441,402 $ 3,273,391

b) Planning, Procurement and Implementation 2019 2018 Administration $ 14,627 $ 17,526 External Professional Services 199,082 472,963

$ 213,709 $ 490,489

8. Tangible Capital Assets

Furniture & Leasehold 2019 2018 Equipment Improvements Totals Totals Opening Cost $ 254,340 $ 276,778 $ 531,118 $ 531,118 Additions during the year 2,595 - 2,595 - Closing Cost 256,935 276,778 533,713 531,118

Opening Accumulated Amortization 226,856 276,778 503,634 460,077 Amortization for the year 25,961 - 25,961 43,557 Closing Accumulated Amortization 252,817 276,778 529,595 503,634

Net Book Value of Tangible Capital Assets $ 4,118 $ - $ 4,118 $ 27,484

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2018-19 Financial Overview

9. Contractual Rights

On October 17, 2018 SaskBuilds signed the Canada-Saskatchewan Integrated Bilateral Agreement for the Investing in Canada Infrastructure Program. The federal funding is to promote infrastructure investment in the areas of public transit, green and social infrastructure, transportation infrastructure that supports trade, and infrastructure in rural and northern communities. Cabinet must approve the project or program amount prior to submission for federal approval. The contract is for $896,323,007 over 10 years expiring March 31, 2028. Annual transfer amounts are estimated.

(In thousands)

2020 2021 2022 2023 2024 Thereafter Total

Federal Transfer $ 50,000 $ 115,000 $ 115,000 $ 115,000 $ 100,263 $ 401,060 $ 896,323

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For More Information

Call us at (306) 798-8014 or email us at [email protected]. You can also visit saskbuilds.ca. Our mailing address is:

SaskBuilds 720 – 1855 Victoria Avenue Regina, Saskatchewan, Canada S4P 3T2

We look forward to hearing from you.

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