Saskatchewan’s budget surplus will grow by 70 percent in the coming fiscal year, as the prairie province benefits from higher royalties from resources such as potash, the province said in a fiscal plan released today.
Finance Minister Ken Krawetz issued a 2012 budget today in Regina that projects a C$95 million ($95.8 million) surplus, before contributions to a provincial reserve fund, in the fiscal year that begins April 1. That’s up from C$55.8 billion in the current fiscal year. Resource royalties, which make up more than one-quarter of revenue, are projected to increase 14 percent.
Saskatchewan is getting a boost from growth in China, India and other large developing economies, where rising demand for protein-rich food and power investments are fueling demand for potash and uranium. Potash Corp., the world’s largest fertilizer producer by market value, and Cameco Corp., the largest uranium producer, both have their main producing mines in the province, and oil production has increased along with prices.
“While other jurisdictions post deficits, Saskatchewan will once again balance its budget,” Krawetz said in the budget. “While other provinces struggle with sluggish growth, Saskatchewan is projected to lead the nation.”
The budget forecasts surpluses averaging C$148 million in the three fiscal years ending March 2016.
Growth to Slow
Saskatchewan’s budget forecasts growth will slow to 2.8 percent this year and 2.6 percent in 2013, from 3.6 percent in 2011. At 5 percent, Saskatchewan and Alberta have the lowest unemployment rate of Canada’s 10 provinces.
Borrowing will rise to C$1.33 billion in 2012-13 from C$661 million this year, mostly to fund investments by government-run corporations, led by the Saskatchewan Power Corporation, according to the documents. Borrowing requirements for the government are estimated at C$204 million, mostly to refinance maturing debt, while requirements for state-owned corporations are estimated at C$1.13 billion.
Public debt as a percentage of GDP is forecast to fall to 11.4 percent from 12.7 percent in 2011, budget documents show.
Total revenue is projected to grow 1.9 percent to C$11.3 billion, as falling transfers from the federal government and lower revenue from state-owned businesses offset growing resource royalties. Expenses are projected to grow 1.6 percent in 2012-13 to C$11.2 billion.