GOV’T TAPS RAINY DAY FUND

$135M fills holes in budget

REGINA — The provincial government is taking $135 million out of its rainy day fund to fill holes in its 201314 budget, according to the report on third-quarter finances.

“We have had to use some of our savings account to offset some costs, as well as to offset revenues that we did not expect to lose,” Finance Minister Ken Krawetz told reporters at the Legislative Building as he released the update on Friday.

The report indicates the government’s overall revenue is down more than $144 million from estimates included in last spring’s budget.

Government revenue from potash is the category primarily to blame, having fallen almost $180 million from the level anticipated in the 2013-14 budget. Costs related to flooding and winter road maintenance are also higher than budgeted.

“When you plan for non-renewable resource revenue to be a specific number and then the potash industry crashes because of things that are occurring in Russia and Belarus and we end up with $179 million less in potash revenue, those are things that are out of our control,” Krawetz said, referring to world potash market changes in 2013.

Oil revenues, while still up almost $82 million from budget, are down by about $74 million from the government’s mid-year forecast.

Individual income tax is about $17 million higher than the province expected at budget time and six months later.

“The other side is that the growth that we see in the population, the growth that we see in the economy, the fact that we have more people working and our average weekly earnings are higher, are the things that help us offset those unexpected costs,” the finance minister said.

The end result of those and other changes adds up to $11.59 billion in expenses and revenues of $11.46 billion, leading to the taking of $135 million from the Growth and Financial Security Fund to make up the difference, with a small amount left over in the General Revenue Fund.

The rainy-day fund will then end the year with a balance of about $531 million. General government debt remains steady at $3.8 billion.

“We’ve always said that on any given time, we may have to utilize our savings account, our ‘rainy day fund,’ as it’s referred to,” Krawetz said, noting he indicated last year that the government might need to access some of that money depending on flooding costs.

Krawetz said that while the government doesn’t release summary finances — which take into account all areas of public spending, including the Crown corporations — at Q1 or Q3, he thinks that those numbers would indicate an ongoing surplus of more than $400 million.

But provincial Opposition finance critic Trent Wotherspoon called the report “utter garbage,” noting the provincial auditor last year gave an adverse opinion on the government’s general revenue fund reporting practices.

“But what we can pull from the numbers and what we know is that we’re coming through economic strength as a province and this government just can’t get it done for Saskatchewan families as it relates to proper management of the finances,” said Wotherspoon, noting Crown debt is up this year.

The government should have a better plan for managing flooding and such events, he said.

“Certainly households across Saskatchewan can’t run their finances like that,” Wotherspoon said of dipping into the rainy day fund.

“And Saskatchewan households are smart. They deserve the full picture, they deserve an honest budget and they know that this sort of management certainly leaves them picking up the tab.”

The auditor has for years called on the province to use the summary finances exclusively, instead of both those and the general revenue fund reporting.