REGINA – A bumper crop and higher returns on investments boosted the Saskatchewan government’s bottom line in the last fiscal year.
Public accounts released Thursday show the province finished the year in March with a surplus of $589 million — $439 million higher than forecast in the 2013-2014 budget.
“We know that revenue is up slightly and expenses were down, and if you have both of those things occurring, the result is that the province is doing well,” said Finance Minister Ken Krawetz.
Revenue was $14.4 billion — up $239 million per cent from the budget — while expenses totalled $13.8 billion, which was $200 million lower than anticipated.
The bottom line initially took a hit because of lower than expected revenue from potash.
The mineral is used primarily as fertilizer and Saskatchewan collects billions in tax and royalty revenue from companies that mine the resource. But demand for potash softened and prices fell last year after Russian-based Uralkali, one of the world’s largest potash producers, quit an export partnership.
Overall, however, the province took in more money from insurance sector investment income, including from the Saskatchewan Auto Fund, and from taxes, such as a four-cent increase on tobacco that brought in an additional $23 million.
The government’s sale of a 69 per cent ownership in Information Services Corporation last July also meant a gain of $141 million.
Spending was down because agricultural expenses were 37 per cent lower than budgeted due to a record crop.
“The statistics show that we’re going to have a bad year somewhere. I hope it’s (not) for a long time into the future, but there will be a year when the crop insurance is going to have a significant payout,” said Krawetz.
“This was not one of those years.”
Krawetz warned, however, that just because there was a bigger than expected surplus, that doesn’t mean there’s money available to hand out.
“Even though there is a $589-million surplus, it’s not cash to spend on things like building more highways or improving conditions in the various ministries, because these are insurance organizations that have brought about that massive amount of surplus.
“That surplus needs to remain there for the year when we will have a massive hail storm and the auto fund will need the dollars.”
The finance minister also noted that there has been some belt tightening this year.
The 2014-2015 budget tabled in March includes $14.07 billion in revenue and $14 billion in spending — leaving a thin surplus of $71 million.