Thursday, July 31, 2008

Saskatchewan Swimming in Cash

Finance Minister Rod Gantefoer announced the First Quarter Fiscal Update today. Surprise--revenues to the Saskatchewan government will likely be $3.1 billion more than expected, increasing the budgeted $9.3 billion in revenues to $12.4 billion. New projections for potash and crown land sales are now about four times original estimates.

The government says what it hears most commonly from Saskatchewan people is that they want debt reduction. Strangely, however, it is not committing any additional dollars to debt. The status quo policy, to deliver half the surplus to debt reduction, will continue as scheduled. Government debt is currently at $6.8 billion. If new budget projections hold true, surpluses from last fiscal year and the current one will reduce debt to $4.7 billion by 2009.

The government has said it can offer education property tax relief and income tax relief at the same time. This indicates more good news could be forthcoming in the next budget, or even in the fall. With so many surplus dollars as well as reserve funds in the Growth and Financial Security Fund, it would seem the government could implement important tax relief quite drastically and not have to worry if it can afford it.

Meanwhile, Crown Corporation debt (separate from the numbers above) will increase $500 million this fiscal year, and health spending is slated to go up $70 million above budget projections. The contract with the Saskatchewan Union of Nurses was pricey indeed. With more health union contracts still outstanding, the bill is sure to rise.

If you're a Saskatchewan resident, be sure to click the buttons on the right sidebar and give the provincial government some feedback on what to do with its surplus money and how to lower education property taxes.

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