Saskatchewan Projects C$64.8 Million Surplus in 2013-14
Saskatchewan Finance Minister Ken Krawetz is forecasting a C$64.8 million ($63.2 million) surplus for the next fiscal year while spending more on public works.
Revenue will rise to C$11.61 billion in the fiscal year starting April 1 from C$11.40 billion while spending grows to C$11.54 billion from C$11.39 billion, according to the plan Krawetz presented today in the provincial capital Regina. Infrastructure spending will grow 7.6 percent to C$847.5 million.
“One of the biggest challenges of growth is making sure we have the infrastructure we need for a growing economy,” Krawetz said in the prepared text of his budget remarks.
The plan is based on a forecast of 2.6 percent economic expansion this year and 3.1 percent next year, led by investments to develop potash deposits and growth in employment and population. The western Canadian province, a major wheat producer, is home to Potash Corp. (POT), the world’s largest fertilizer producer by market value, and Cameco Corp. (CCO), the largest uranium producer.
The budget assumes potash prices will rise to $413.84 a ton next year from $388.99 this year, with both figures lower than last year’s $444.15. Wheat prices will increase to C$286.86 a metric ton next year from C$274.02 this year.
The province’s surplus for the fiscal year ending March 31 was cut to C$8.8 million from an original C$95 million as spending exceeded forecasts. The budget also cut property tax rates while increasing levies on tobacco and alcohol, and deferred a plan to reduce the corporate tax rate to 10 percent from 12 percent, which was scheduled to happen by 2015.
Half of the surplus will be transferred into a special savings fund, raising its total to C$695.1 million next year. The surplus before such transfers is projected to widen to C$163.8 million for fiscal 2014-15.
Saskatchewan’s borrowing requirement will rise to C$1.59 billion in 2013-14 from C$1.39 billion this year, most of which is for government-owned corporations, according to the budget documents.
The province has about C$8.7 billion in outstanding bonds, according to data compiled by Bloomberg. Saskatchewan’s debt is rated Aa1 by Moody’s Investors Service and AAA by Standard & Poor’s.
To contact the reporter on this story: Greg Quinn in Ottawa at email@example.com