Saskatchewan Province Of 18K/A Annual report (foreign governments) (amended) | SEC 21 Sep 11

Public Accounts

2010-11

Volume 1

Main Financial Statements

Saskatchewan

2010-11 Public Accounts

Volume 1 - Main Financial Statements

Contents

3		Letters of Transmittal
4		Introduction to the Public Accounts

Financial Statement Discussion and Analysis

9		Introduction - Discussion and Analysis
10		General Revenue Fund Financial Statements - Discussion and Analysis
24		Growth and Financial Security Fund - Discussion and Analysis
25		Summary Financial Statements - Discussion and Analysis
42		Risks and Uncertainties

General Revenue Fund Financial Statements

45		Statement of Responsibility
47		Independent Auditor’s Report
49		Financial Statements
53		Notes to the Financial Statements
61		Schedules to the Financial Statements

Summary Financial Statements

77		Statement of Responsibility
79		Independent Auditor's Report
81		Summary Financial Statements
85		Notes to the Summary Financial Statements
96		Schedules to the Summary Financial Statements

Supplementary Information

119		Growth and Financial Security Fund
120		General Revenue Fund - Public Issue Debentures
124		General Revenue Fund - Debentures Issued to the Minister of Finance of Canada
125		Glossary of Terms

Letters of Transmittal

Regina, Saskatchewan

June 2011

To His Honour

The Honourable Gordon Barnhart

Lieutenant Governor of the Province of Saskatchewan

Your Honour:

I have the honour to submit the main financial statements of the Government of the Province of Saskatchewan for the fiscal year ended March 31, 2011.

Respectfully submitted,

/s/ Ken Krawetz

Ken Krawetz

Deputy Premier

Minister of Finance

Regina, Saskatchewan

June 2011

The Honourable Ken Krawetz

Deputy Premier

Minister of Finance

We have the honour of presenting the main financial statements of the Government of the Province of Saskatchewan for the fiscal year ended March 31, 2011.

Respectfully submitted,

/s/ Karen Layng /s/ Terry Paton

Karen Layng Terry Paton

Deputy Minister of Finance Provincial Comptroller

Government of Saskatchewan – 2010-11 Public Accounts 3

Introduction to the Public Accounts

Introduction

The 2010-11 Public Accounts of the Government of Saskatchewan are prepared in accordance with the Financial Administration Act, 1993 and consist of two volumes.

Volume 1

Financial Statement Discussion and Analysis provides users of the Government’s main financial statements with an overview of the Government’s performance by presenting comparative financial highlights and variance analysis.

General Revenue Fund Financial Statements account for the financial transactions of the General Revenue Fund (GRF). The GRF is comprised of all Ministries of the Government. This is the fund into which all revenues are paid, unless otherwise provided for by legislation, and from which all expenses are appropriated by the Legislative Assembly.

Summary Financial Statements consolidate the financial transactions of the GRF, Crown corporations, agencies, boards and commissions. These consolidated statements provide an accounting of the full nature and extent of the financial affairs and resources controlled by the Government.

Supplementary Information contains unaudited information on:

•	the Growth and Financial Security Fund;

•	GRF public issue debentures;

•	GRF debentures issued to the Minister of Finance of Canada; and

•	a glossary of terms used throughout.

Volume 2

Volume 2 contains details on the revenue and expense of the GRF. It also provides details on capital asset acquisitions of the GRF; a listing of suppliers who received $50,000 or more for goods and services and capital assets supplied to the GRF and Revolving Funds during the fiscal year; financial information on the assets, liabilities and residual balances of pension plans and trust funds administered by the Government; a listing of remissions of taxes and fees; and information on road-use fuel tax accountability.

The Public Accounts are available on the Internet at http://www.finance.gov.sk.ca/public-accounts/.

A Compendium is also available on the Internet at http://www.finance.gov.sk.ca/public-accounts/ that contains the financial statements of various government agencies, boards, commissions, pension plans, special purpose funds and institutions, as well as Crown corporations which are accountable to Treasury Board.

4 Government of Saskatchewan – 2010-11 Public Accounts

Introduction to the Public Accounts

Financial Reporting Structure

1	Examples of CIC Crown corporations are: SaskEnergy Incorporated, Saskatchewan Power Corporation, Saskatchewan Telecommunications Holding Corporation, Saskatchewan Government Insurance and Saskatchewan Transportation Company.

2	Examples of Treasury Board Crown corporations are: Agricultural Credit Corporation of Saskatchewan, Liquor and Gaming Authority, and Saskatchewan Housing Corporation.

Government of Saskatchewan – 2010-11 Public Accounts 5

Financial Statement Discussion and Analysis

The purpose of the Financial Statement Discussion and Analysis is to provide users of the Government’s main financial statements with an overview of the Government’s financial performance, as well as the Government’s accountability for the resources entrusted to it. This information should be read in conjunction with the General Revenue Fund and Summary financial statements. The Government is responsible for the integrity and objectivity of this discussion and analysis.

General Revenue Fund (GRF) Financial Statements

v	How has the Government performed as compared to the Budget Estimates?

The GRF is the fund where all public monies are deposited to and disbursed from, as authorized by the Legislative Assembly. Exceptions to this principle must be authorized by law. Each year the Government presents a Budget for the GRF to the Legislative Assembly along with a detailed financial plan for the GRF called the Estimates. The GRF financial statements report on the performance of the Government against the Estimates. As a result, budget-to-actual analysis on the Government’s revenue and expense can be found in the GRF section of the Financial Statement Discussion and Analysis.

Summary Financial Statements (SFS)

v	How has the Government performed as a whole?

The SFS provide an accounting of the full nature and extent of the financial affairs and resources controlled by the Government. The SFS include the financial results of the GRF, Crown corporations, agencies, boards and commissions.

Government of Saskatchewan – 2010-11 Public Accounts 9

Financial Statement Discussion and Analysis

General Revenue Fund Financial Statements

Financial Highlights


(millions of dollars)										Change from
	2011						2010						2010
	Budget1			Actual2			Actual2			Budget			Actual


Revenue		9,950			11,061			10,267			1,111			794
Expense		10,124			10,965			10,099			841			866
Pre-transfer surplus (deficit)		(174	)		96			168			270			(72	)
Transfer to the Growth and Financial Security Fund		-			(48	)		(84	)		(48	)		36
Transfer from the Growth and Financial Security Fund		194			-			341			(194	)		(341	)
Net transfer (to) from the Growth and Financial Security Fund		194			(48	)		257			(242	)		(305	)
Surplus		20			48			425			28			(377	)

Financial assets					3,082			3,693						(611	)
Less: Government general debt					(4,135	)		(4,140	)					5
Other liabilities					(2,623	)		(3,191	)					568
Net debt					(3,676	)		(3,638	)					(38	)
Plus: Non-financial assets					3,177			3,092						85
Accumulated Deficit					(499	)		(546	)					47

Growth and Financial Security Fund Balance		764			1,006			958			242			48

1	The Budget Estimates do not include a statement of financial position.

2	The Provincial Auditor’s report indicates that, in her opinion, there are certain adjustments required to the General Revenue Fund financial statements.

Surplus

The 2010-11 General Revenue Fund (GRF) financial statements report a pre-transfer surplus of $96 million. This is a $270 million improvement from budget due to a $1.11 billion increase in revenue, partially offset by an $841 million increase in expense.

The improved financial situation in 2010-11 eliminated the need for the budgeted $194 million transfer from the Growth and Financial Security Fund (GFSF). Instead, the GRF transferred $48 million to the GFSF. The resulting $48 million GRF surplus is $28 million higher than budgeted.

Compared to 2009-10, the GRF surplus is $377 million lower largely due to a $305 million decrease in the net GFSF transfer. In 2009-10, the GFSF provided a net transfer of $257 million to the GRF to assist in financing government-owned capital.

Growth and Financial Security Fund

The Government’s Growth and Financial Security Fund, established to safeguard Saskatchewan’s future, has a balance of $1.01 billion at March 31, 2011. This is after a $48 million transfer from the GRF, representing half of the GRF pre-transfer surplus for the year.

Debt

Government general debt at March 31, 2011 is $4.14 billion, maintaining approximately the same level of debt held over the last two years and the lowest level since 1989.

Credit Rating Upgrade

In May 2011, the Province received a credit rating upgrade from Standard & Poor’s, moving it to the highest level possible. For the first time in Saskatchewan’s history, the credit rating is at the AAA level.

10 Government of Saskatchewan – 2010-11 Public Accounts

Financial Statement Discussion and Analysis

General Revenue Fund Financial Statements

Surplus

The GRF annual results for the past ten years were as follows:

*	Since 2004-05, tangible capital assets have been capitalized and expensed over their useful lives rather than being fully expensed in the year of acquisition.

Accumulated Deficit

The accumulated deficit is the sum of all the annual results reported to date by the Government. An accumulated deficit indicates that a government has financed past annual operating deficits by borrowing. In 2010-11, the GRF accumulated deficit improved from $546 million to $499 million.

The GRF accumulated deficit for the past ten years was as follows:

*	Since 2004-05, tangible capital assets have been capitalized and expensed over their useful lives rather than being fully expensed in the year of acquisition.

Government of Saskatchewan – 2010-11 Public Accounts 11

Financial Statement Discussion and Analysis

General Revenue Fund Financial Statements

Revenue

The GRF sources of revenue for 2010-11 were as follows:

In the last five fiscal years, the GRF revenue was derived from the following sources:

12 Government of Saskatchewan – 2010-11 Public Accounts

Financial Statement Discussion and Analysis

General Revenue Fund Financial Statements

Revenue (continued)

Total revenue was $11.06 billion in 2010-11, an increase of $1.11 billion, or 11.2 per cent, from budget due to increases in all categories except transfers from the federal government. Compared to 2009-10, GRF revenue increased $794 million, or 7.7 per cent. The increase from the previous year is primarily due to higher taxation and non-renewable resources revenue. A comparison to budget and prior year by revenue source is illustrated below.

Taxation Revenue

Taxation revenue was $5.13 billion in 2010-11, an increase of $272 million from budget primarily due to higher corporation income tax, partially offset by lower individual income tax. Compared to 2009-10, taxation revenue increased by $399 million as a result of growth in the Saskatchewan economy.

Individual income tax (PIT) revenue was $1.80 billion in 2010-11, $169 million lower than budgeted primarily due to weaker-than-expected growth in the taxable income base in 2009. Strong employment income growth in 2009 was significantly offset by declines in investment income and resulted in a smaller-than-budgeted prior-year adjustment payment and taxable income base in 2010. Compared to 2009-10, PIT revenue was $95 million lower despite growth in the taxable income base because of the decline in prior-year adjustment payments between the two years.

Corporation income tax (CIT) revenue was $1.16 billion in 2010-11, $393 million higher than budgeted. The increase is due to stronger-than-anticipated assessments for 2009 that resulted in a larger-than-budgeted prior-year adjustment payment. As well, revised federal estimates of the national corporate tax base for 2010 led to increases in current-year CIT payments. Compared to 2009-10, CIT revenue was $274 million higher as a result of strong growth in the provincial and national taxable income bases.

Other tax revenue (including fuel, tobacco and other miscellaneous taxes) was a combined $48 million higher than budgeted largely due to stronger-than-expected capital growth in the financial sector that resulted in higher Corporation

Government of Saskatchewan – 2010-11 Public Accounts 13

Financial Statement Discussion and Analysis

General Revenue Fund Financial Statements

Revenue (continued)

Capital Tax revenue. Compared to 2009-10, other taxes increased by $118 million as a result of economic growth, a growing population, strong capital growth in the financial sector, higher tobacco tax rates and a reduction in the tobacco tax-free allowance for a First Nations individual.

Non-renewable Resources Revenue

Non-renewable resources revenue is one of the Government’s most volatile revenue sources because it is largely susceptible to changes in factors beyond the control of the Government, particularly market demand and commodity prices.

In 2010-11 non-renewable resources revenue was $2.53 billion, an increase of $420 million from budget primarily due to higher-than-budgeted revenue from Crown land sales and oil production. Compared to 2009-10, revenue was $617 million higher as the result of increases in potash and Crown land sales.

Oil revenue was $1.27 billion in 2010-11. This is an increase of $176 million from budget primarily due to higher-than-budgeted well-head prices resulting from higher West Texas Intermediate (WTI) oil prices, partially offset by a higher exchange rate.

WTI oil prices averaged 83.37 U.S. dollars per barrel in 2010-11, an increase of 5.87 U.S. dollars from the budget assumption of 77.50 U.S. dollars. In 2009-10, WTI oil prices averaged 70.71 U.S. dollars.

The Canadian dollar averaged 98.4 U.S. cents in 2010-11, an increase of 2.9 U.S. cents from the budget assumption of 95.5 U.S. cents. In 2009-10, the dollar averaged 91.9 U.S. cents.

Crown land sales revenue was $467 million in 2010-11, the second-highest fiscal year on record and $264 million higher than budgeted. The amount of land sold and the average price paid per hectare exceeded budget expectations. Compared to 2009-10, the sale of Crown petroleum and natural gas rights generated $316 million more in revenue for the GRF as a result of higher oil prices and continued confidence in Saskatchewan’s oil and gas sector.

Resource surcharge revenue was $361 million in 2010-11, $38 million lower than budgeted as the result of lower-than-expected instalment payments, particularly from the oil and gas sector. Compared to 2009-10, revenue declined $115 million. The decrease from the prior year reflects low resource prices and sales in 2009, upon which 2010-11 instalment payments were based.

Potash revenue was $263 million in 2010-11, an increase of $42 million from budget due to higher prices and sales.

On a fiscal-year basis, potash sales volumes increased from the budget assumption of 8.1 million K2O tonnes to 9.9 million K2O tonnes. The average mine netback (price) increased from the budget assumption of 308 U.S. dollars per KCl tonne to 348 U.S. dollars per KCl tonne (from $529 to $580 per K2O tonne).

Compared to 2009-10, potash revenue increased $446 million. The increase is related to refunds of prior-year revenue that were paid out in 2009-10, as well as a significant rebound in sales volumes that occurred in 2010-11. Potash sales volumes more than doubled in 2010-11, from 4.7 million K2O tonnes in 2009-10 to 9.9 K2O tonnes in 2010-11.

Transfers from Government Entities

Transfers from Government entities were $965 million in 2010-11, an increase of $196 million from budget. The GRF received two unbudgeted, special dividends from the Crown Investments Corporation of Saskatchewan (CIC) to fund the Saskatchewan Children’s Hospital ($195 million) and Saskatchewan’s nuclear research and development strategy ($9 million). Compared to 2009-10, transfers decreased $284 million largely as the result of lower CIC special dividends.

14 Government of Saskatchewan – 2010-11 Public Accounts

Financial Statement Discussion and Analysis

General Revenue Fund Financial Statements

Revenue (continued)

Other Own-Source Revenue

Other own-source revenue was $836 million, an increase of $322 million from budget. The change from budget was largely due to an increase in other revenue, primarily refunds of prior-year expense and higher interest, premium, discount and exchange revenue due to unbudgeted gains on the sale of investments.

In addition, commercial operations accounted for $92 million of the increase from budget. Ministries with commercial operations are allowed to re-spend the revenue earned through these operations. Accordingly, the budget expense is shown net of revenue in the Estimates. In the Public Accounts, revenue and expense are reported on a gross basis to

provide accountability for these operations. This results in variances between the budget and actual revenue being shown in the Public Accounts. However, including commercial revenue in the Public Accounts does not impact the GRF surplus because the equivalent, offsetting commercial expense is also reported in the GRF financial statements.

Compared to 2009-10, other own-source revenue increased $66 million primarily due to increases in refunds of prior-year expense.

Transfers from the Federal Government

Federal transfers were $1.60 billion in 2010-11, a $99 million decrease from budget. The decline is primarily due to an $83 million decline in cost-sharing transfers. Poor weather, construction delays and stimulus deadline extensions into 2011-12 resulted in less-than-expected activity in a number of federal-provincial-municipal cost-sharing agreements. In addition, Canada Health Transfer (CHT) funding was $16 million lower than the budget estimate due to an increase in the value of Saskatchewan’s tax points reflecting a higher-than-budgeted share of the national corporate tax base. This increase results in a corresponding decrease in CHT cash transfers.

Government of Saskatchewan – 2010-11 Public Accounts 15

Financial Statement Discussion and Analysis

General Revenue Fund Financial Statements

Expense

Expense is reported by ministry in the GRF Statement of Operations. Because the Government’s expense budget for the GRF is organized by ministry, this best provides a comparison of actual to budget. Schedules to the GRF financial statements also disclose expense by theme and by object, which provide information on the purpose for which the expense has been incurred. These best allow for comparison from year to year as programs maintain the same theme and object when the Government undergoes reorganization of ministries.

Expense by Ministry

The GRF expense by ministry for 2010-11 was as follows:

*	Key components of “other” include Municipal Affairs (3%), Finance (3%) and Environment (2%).

Comparison to Budget

Total expense was $841 million higher than budget primarily due to higher third-party capital transfers and costs associated with the spring and summer flooding. Key changes in expense reported by ministries are explained below.

Ministry of Health expense was $4.55 billion in 2010-11, a $346 million increase from budget, primarily due to funding provided for the Saskatchewan Children’s Hospital, the continuation of long-term care facility replacements, the Saskatchewan Surgical Initiative, medical equipment pressures, facility repairs, electronic health record development, Parkridge Long-term Care facility renovations and Multiple Sclerosis clinical trials.

Ministry of Agriculture expense was $97 million higher than budgeted, primarily due to the provincial contribution to the Canada-Saskatchewan Excess Moisture Program.

Ministry of Advanced Education, Employment and Immigration expense was $89 million higher than budgeted, primarily due to funding for the Academic Health Sciences Centre project, university facility maintenance, nursing program expansion, the InterVac project and a regional college project.

Ministry of Corrections, Public Safety and Policing expense was $54 million higher than budgeted, primarily due to claims under the Provincial Disaster Assistance Program.

Ministry of Education expense was $51 million higher than budgeted, primarily due to major school capital and block maintenance capital funding and increased requirements for the Saskatchewan Teachers’ Retirement Plan.

16 Government of Saskatchewan – 2010-11 Public Accounts

Financial Statement Discussion and Analysis

General Revenue Fund Financial Statements

Expense (continued)

Ministry of Social Services expense was $42 million higher than budgeted, primarily due to increases for social housing renovations, capital for the 440 Waitlist Initiative for individuals with intellectual disabilities and Saskatchewan Assistance Plan caseloads.

Ministry of Energy and Resources expense was $40 million higher than budgeted, primarily due to an increase related to abandoned uranium mine cleanup.

Ministry of Environment expense was $40 million higher than budgeted, primarily due to an increase in transfers to the Saskatchewan Watershed Authority for flood relief.

In addition, Commercial Operations accounted for a $92 million expense increase. Ministries with commercial operations are allowed to re-spend the revenue earned through these operations. Accordingly, the budget expense is shown net of revenue in the Estimates. In the Public Accounts, revenue and expense are reported on a gross basis to provide accountability for these operations. This results in variances between the budget and actual expense being shown in the Public Accounts. However, including commercial expense in the Public Accounts does not impact the GRF surplus because the equivalent, offsetting commercial revenue is also reported in the GRF financial statements.

Finance Debt Servicing expense was $11 million lower than budgeted, primarily due to lower-than-expected in-year financing at lower-than-expected interest rates.

Expense by Theme

The GRF expense by theme for 2010-11 was as follows:

*	Key components of “other” include community development (4%), debt servicing (4%), economic development (2%) and environment and natural resources (2%).

Government of Saskatchewan – 2010-11 Public Accounts 17

Financial Statement Discussion and Analysis

General Revenue Fund Financial Statements

Expense (continued)

In the last five fiscal years, the GRF expense by theme was as follows:

Comparison to Previous Year

Total expense was $866 million higher than in 2009-10. Key changes in expense reported by theme are explained below.

Health was $614 million higher than the prior year, primarily due to funding for the Saskatchewan Children’s Hospital, long-term care projects, the Saskatchewan Surgical Initiative, medical equipment pressures, facility repairs and compensation increases for health sector workers.

Agriculture was $109 million higher than the prior year mainly due to the provincial contribution to the Canada-Saskatchewan Excess Moisture Program.

Education increased by $101 million over the prior year. This increase was largely due to additional operating funding to universities. There were also increases in funding to the Saskatchewan Student Aid Fund and for contributions to pension plans for teachers.

Social services and assistance was $52 million higher than the previous year, primarily due to higher Saskatchewan Assistance Plan caseloads and an increase in funding to the Saskatchewan Housing Corporation for the development of affordable rental housing.

Protection of persons and property was $50 million higher than the previous year, primarily due to claims made under the Provincial Disaster Assistance Program. There was also an increase in policing costs.

Environment and natural resources increased by $44 million primarily due to payments made to the Saskatchewan Watershed Authority for flood relief.

Economic development increased by $42 million largely due to the remediation of abandoned uranium mine sites and the development of a nuclear strategy.

Debt servicing was $56 million lower than in 2009-10 as a result of debt maturities during 2009-10 and 2010-11 that were refinanced at much lower rates.

Community development decreased by $78 million, primarily due to a decrease in the Building Canada Fund - Communities Component, in payments made under the First Nations gaming agreement and in the funding of educational broadcasting with the sale of operations and then wind-up of Saskatchewan Communications Network Corporation.

18 Government of Saskatchewan – 2010-11 Public Accounts

Financial Statement Discussion and Analysis

General Revenue Fund Financial Statements

Expense (continued)

Expense by Object

The GRF expense by object for 2010-11 was as follows:

*	The key component of “other” is amortization of tangible capital property.

In the last five fiscal years, the GRF expense by object was as follows:

Government of Saskatchewan – 2010-11 Public Accounts 19

Financial Statement Discussion and Analysis

General Revenue Fund Financial Statements

Public Debt and Debt Servicing Costs

Public Debt

Public debt consists of gross debt net of sinking funds and includes:

•	government general debt, which is debt issued by the GRF to fund government spending;

•	Crown corporation general debt, which is debt issued by the GRF and subsequently loaned to a Crown corporation; and

•	government business enterprise specific debt, which is debt of self-sufficient Crown corporations issued by the GRF specifically on their behalf. The Government expects to realize the receivables from the government business enterprises and settle the external debt simultaneously.

The Government has undertaken initiatives to significantly reduce the government general debt outstanding and the costs to service this debt. The Government’s debt reduction strategy includes the following components:

•	paying down existing debt;

•	transferring debt borrowed for general government purposes to Crown corporations to meet their borrowing requirements; and

•	increasing sinking fund contributions.

At March 31, 2011, government general debt was $4.14 billion.

The GRF public debt for the past ten years was as follows:

Since 2001-02, the government general debt reported on the GRF Statement of Financial Position has declined by $3.42 billion from $7.56 billion to $4.14 billion.

Crown corporation general debt and government business enterprise specific debt have remained relatively constant since 2001-02 and at March 31, 2011 mainly include $2,513 million for Saskatchewan Power Corporation, $861 million for SaskEnergy Incorporated and $370 million for Saskatchewan Telecommunications Holding Corporation.

20 Government of Saskatchewan – 2010-11 Public Accounts

Financial Statement Discussion and Analysis

General Revenue Fund Financial Statements

Public Debt and Debt Servicing Costs (continued)

Debt Servicing Costs

The GRF incurs interest and other costs to service general debt. The amount of these costs is determined by the amount of general debt and the interest rate attached to that debt. The average effective interest rate on gross debt during 2010-11 was 6.3 per cent (2009-10 - 6.6 per cent).

The Government’s debt reduction strategy has resulted in a decrease in debt servicing costs and an increase in interest revenue. While paying down existing debt reduces the cost of debt servicing, contributing to sinking funds increases interest earnings.

Net interest cost is calculated as debt servicing costs less interest earnings. It is a measure of the positive impact on the Province’s operations from reducing general debt.

The GRF has reported the following debt servicing costs and net interest costs over the past ten years:

Since 2001-02, both the amount of general debt and the level of interest rates have declined. As a result, the debt servicing costs reported by the GRF have decreased from $696 million in 2001-02 to $424 million in 2010-11. At the same time, interest revenue has increased, resulting in a reduction in net interest costs from $576 million in 2001-02 to $215 million in 2010-11.

Government of Saskatchewan – 2010-11 Public Accounts 21

Financial Statement Discussion and Analysis

General Revenue Fund Financial Statements

Investment in Infrastructure

The Government invests in infrastructure in two ways:

•	by providing grants to third parties for capital purposes. This includes grants for universities and hospitals; and

•	by investing in government-owned capital, such as highways.

During 2010-11, $1.17 billion was invested in infrastructure. The Government’s investment in infrastructure over the past five years is presented below.

* Capital transfers for 2009 include $154 million which was subsequently permitted to be used by recipients for operations.

22 Government of Saskatchewan – 2010-11 Public Accounts

Financial Statement Discussion and Analysis

General Revenue Fund Financial Statements

Net Debt

Net debt is one measure of the amount of debt that has been left to future generations. It is the difference between the GRF liabilities and financial assets.

During 2010-11, net debt increased by $38 million. This increase can be attributed to amounts invested in tangible capital assets and other non-financial assets partially offset by the GRF surplus.

Since 2001-02, the net debt of the GRF has declined from $7.01 billion to $3.68 billion, as follows:

A decreasing net debt is an indicator of increased flexibility over future spending.

Government of Saskatchewan – 2010-11 Public Accounts 23

Financial Statement Discussion and Analysis

Growth and Financial Security Fund

The Growth and Financial Security Fund (GFSF) was established during 2008-09 under The Growth and Financial Security Act. At that time, the balances in the Fiscal Stabilization Fund and the Saskatchewan Infrastructure Fund were transferred to the GFSF. The Growth and Financial Security Act requires:

•	the Government to balance the GRF budget each fiscal year;

•	the annual preparation of four-year financial plans and public debt management plans; and

•	that 50 per cent of the annual surplus in the GRF be transferred to the GFSF.

The stabilization balance for the past five years was as follows:

The balance in the GFSF at March 31, 2011 was $1.01 billion. This increased from the previous year, as a result of a $48 million transfer to the fund, representing 50 per cent of the GRF pre-transfer surplus.

Growth and Financial Security Fund - Current Year Activity
(millions of dollars)	2011

Opening balance		958
Transfer from the GRF (50 per cent of GRF pre-transfer surplus)		48
Transfer to the GRF		-
Closing balance		1,006

24 Government of Saskatchewan – 2010-11 Public Accounts

Financial Statement Discussion and Analysis

Summary Financial Statements

Financial Highlights


(millions of dollars)							Change
							from
	2011			2010			2010


Revenue		12,328			11,243			1,085
Expense		13,311			12,486			825
Deficit from government service organizations		(983	)		(1,243	)		260
Income from government business enterprises		970			834			136
Deficit		(13	)		(409	)		396

Financial assets		10,270			10,355			(85	)
Less: Liabilities		(14,053	)		(13,914	)		(139	)
Net debt		(3,783	)		(3,559	)		(224	)
Plus: Non-financial assets		6,744			6,395			349
Accumulated Surplus		2,961			2,836			125

Reporting Entity

The Summary financial statements (SFS) include the financial activities of organizations controlled by the Government. These organizations are segregated into two classifications, government service organizations (GSOs) and government business enterprises (GBEs). GBEs are self-sufficient government organizations that have the financial and operating authority to sell goods and services to individuals and organizations outside the government reporting entity as their principal activity. All other organizations, including the General Revenue Fund, are GSOs. A complete listing of the organizations included in the government reporting entity is provided in schedule 18 of the SFS.

Deficit

Comparison to Previous Year

The deficit of $13 million in 2010-11 was an improvement of $396 million over the $409 million deficit reported in 2009-10.

This was primarily due to a $260 million improvement in the net operating results of GSOs. Revenue from GSOs increased in 2010-11 by $1.09 billion, primarily due to increases in non-renewable resources ($617 million) and taxation ($410 million) revenue. At the same time, expense for GSOs increased in 2010-11 by $825 million, primarily in agriculture ($507 million), health ($157 million) and education ($88 million).

There was a $136 million increase in income from GBEs. This increase was mainly the result of higher operating profits and stronger investment earnings.

Credit Rating Upgrade

Government of Saskatchewan – 2010-11 Public Accounts 25

Financial Statement Discussion and Analysis

Summary Financial Statements

Financial Highlights (continued)

Comparison to Budget

The Government prepares a Summary Financial Budget, which is based on the entities that are included in the SFS. In this budget, the categorization of organizations is aligned with the Cabinet Committee (CIC Board or Treasury Board) that examines an organization’s budget. There is also a category for Not-for-Profit Insurance organizations, which are intended to be actuarially sound over the long term. As the categorization is different than that used for reporting purposes in the SFS, actual results are most easily compared to budget based on the annual surplus/deficit.

2010-11 Deficit - Comparison to Budget							Change
(millions of dollars)	2011						from
	Estimated1			Actual1			Estimated


Treasury Board Organizations
General Revenue Fund		20			48			28
Growth and Financial Security Fund		(194	)		48			242
Other Treasury Board Organizations		238			842			604
Less: Dividends included in General Revenue Fund surplus		(453	)		(448	)		5
Adjustment for pension liability accrual		(289	)		(304	)		(15	)
		(678	)		186			864
CIC Board Organizations		250			312			62
Less: Dividends included in General Revenue Fund surplus		(276	)		(480	)		(204	)
		(704	)		18			722
Not-for-Profit Insurance Organizations		81			(31	)		(112	)
Deficit		(623	)		(13	)		610

1 Presented on the basis of the Summary Financial Budget.

The 2010-11 SFS report a deficit of $13 million, $610 million less than the $623 million budget deficit. This lower-than-budget deficit was largely due to budget-to-actual variances in the General Revenue Fund (GRF). GRF revenue was $1.11 billion higher than budgeted as a result of stronger than originally expected performance in the non-renewable resources sector and robust growth in tax revenue. Additional details are found in the GRF financial statement discussion and analysis.

26 Government of Saskatchewan – 2010-11 Public Accounts

Financial Statement Discussion and Analysis

Summary Financial Statements

Surplus/Deficit

The SFS have reported the following results over the past ten years:

*	Since 2003-04, tangible capital assets have been capitalized and expensed over their useful lives rather than being fully expensed in their year of acquisition.

Accumulated Surplus

The accumulated surplus is the sum of all the annual results reported to date by the Government. An accumulated surplus indicates that a government has net resources that can be used to provide future services. The SFS accumulated surplus (deficit) for the past ten years was as follows:

*	Since 2003-04, tangible capital assets have been capitalized and expensed over their useful lives rather than being fully expensed in their year of acquisition.

**	Includes a $1.58 billion increase for the first-time inclusion of the Boards of Education.

Government of Saskatchewan – 2010-11 Public Accounts 27

Financial Statement Discussion and Analysis

Summary Financial Statements

Revenue

The SFS sources of revenue for 2010-11 were as follows:

In the last five fiscal years, the SFS revenue was derived from the following sources:

* The increase in 2010 taxation revenue is primarily due to the impact of recording education property tax resulting from the first-time inclusion of Boards of Education.

28 Government of Saskatchewan – 2010-11 Public Accounts

Financial Statement Discussion and Analysis

Summary Financial Statements

Expense

Expense by Theme

The SFS expense by theme for 2010-11 was as follows:

*	Key components of “other” include protection of persons and property (4%), community development (4%) and transportation (4%).

In the last five fiscal years, the SFS expense by theme was as follows:

Government of Saskatchewan – 2010-11 Public Accounts 29

Financial Statement Discussion and Analysis

Summary Financial Statements

Expense (continued)

Expense by Object

In addition to reporting expense by theme, the SFS also present expense by object, or major type of expense. The SFS expense by object for 2010-11 was as follows:

*	The key component of “other” is amortization of tangible capital property.

In the last five fiscal years, the SFS expense by object was as follows:

* The increase in 2010 salaries and benefits expense and corresponding decrease in transfers expense are primarily due to the impact of the first-time inclusion of Boards of Education.

30 Government of Saskatchewan – 2010-11 Public Accounts

Financial Statement Discussion and Analysis

Summary Financial Statements

Income from Government Business Enterprises

Government business enterprises are independently managed, profit-oriented organizations that are controlled by the Government. The SFS reported the following income from government business enterprises over the past ten years:

Future Accounting Policy Changes

Government business enterprises are required to adopt International Financial Reporting Standards (IFRS) in fiscal years beginning on or after January 1, 2011. The Government is not required to adopt these standards; however, the Summary financial statements could be affected by this change to the extent that government business enterprises are impacted. The respective entities are finalizing their conversion to IFRS. The impact of the IFRS conversion will be reflected in the 2011-12 Summary financial statements.

Government of Saskatchewan – 2010-11 Public Accounts 31

Financial Statement Discussion and Analysis

Summary Financial Statements

Public Debt and Debt Charges

Public Debt

Public debt consists of gross debt net of sinking funds and includes:

•	general debt, which is:

▪	debt issued by the GRF and other government service organizations; and

▪	debt issued by government service organizations and subsequently loaned to government business enterprises; and

•

government business enterprise specific debt, which is debt issued by government service organizations specifically on behalf of government business enterprises where the Government expects to realize the receivables from the government business enterprises and settle the external debt simultaneously.

Public debt on the Summary Statement of Financial Position is presented net of government business enterprise specific debt. The SFS public debt for the past ten years was as follows:

At March 31, 2011, the SFS report public debt of $4.89 billion. Since 2001-02, public debt has declined $3.45 billion, from $8.34 billion to $4.89 billion.

At March 31, 2011, government business enterprise specific debt was $3.46 billion. Government business enterprise specific debt is included in the Investment in (or net assets of) Government Business Enterprises reported on the Summary Statement of Financial Position and disclosed in schedule 3 of the SFS. Since 2001-02, government business enterprise specific debt has remained relatively stable, increasing slightly from $3.09 billion to $3.46 billion.

32 Government of Saskatchewan – 2010-11 Public Accounts

Financial Statement Discussion and Analysis

Summary Financial Statements

Public Debt and Debt Charges (continued)

Credit Rating

The improvement in the Government’s finances since 2001-02 has led to a series of upgrades in its credit ratings. One of the world’s leading credit rating agencies is Standard & Poor’s. Its credit rating for the Province of Saskatchewan at March 31, each fiscal year since 2001-02 is shown below.

At March 31, 2011, the credit ratings for Saskatchewan and each of the other jurisdictions are shown below. In May 2011, Standard & Poor’s upgraded Saskatchewan’s credit rating from AA+ to AAA. Saskatchewan was the only jurisdiction to receive a credit rating upgrade at that time.

Credit Ratings - March 2011



	Rating Agency1
Jurisdiction	Moody's Investors Service Inc.	Standard & Poor's	Dominion Bond Rating Service
Alberta	Aaa	AAA	AAA
British Columbia	Aaa	AAA	AA(high)
Saskatchewan	Aa1	AA+*	AA
Manitoba	Aa1	AA	A(high)
Ontario	Aa1	AA-	AA (low)
Quebec	Aa2	A+	A(high)
New Brunswick	Aa2	AA-	A(high)
Nova Scotia	Aa2	A+	A
Newfoundland & Labrador	Aa2	A+	A
Prince Edward Island	Aa2	A	A(low)

The rating agencies assign letter ratings to borrowers. The major A bracket categories, in descending order of credit quality, are: AAA/Aaa; AA/Aa; A. The ‘1’, ‘2’, ‘3’, ‘high’, ‘low’, ‘-’, and ‘+’ modifiers show relative standing within the major categories. For example, AAA exceeds AA, Aa1 exceeds Aa2 and AA exceeds AA-.

*	positive outlook or trend.

Government of Saskatchewan – 2010-11 Public Accounts 33

Financial Statement Discussion and Analysis

Summary Financial Statements

Public Debt and Debt Charges (continued)

Debt Charges

The Government incurs interest and other costs to service its public debt. The amount of these costs is determined by the amount of public debt and the interest rate attached to that debt. The average effective interest rate on gross debt during 2010-11 was 6.4 per cent (2009-10 - 6.7 per cent).

Net Debt

Net debt is one measure of the amount of debt that has been left to future generations. It is the difference between the SFS liabilities and its financial assets.

During 2010-11, net debt increased by $224 million. This increase can be attributed to the SFS deficit of $13 million plus amounts invested in tangible capital assets and other non-financial assets.

Since 2001-02, the net debt of the SFS has declined from $8.71 billion to $3.78 billion, as follows:

Lower levels of net debt indicate increased flexibility over future spending.

34 Government of Saskatchewan – 2010-11 Public Accounts

Financial Statement Discussion and Analysis

Summary Financial Statements

Financial Assets

Financial assets represent the amount of resources that are available to the Government that can be converted to cash to meet obligations or fund operations. In the past five years, the SFS financial assets were as follows:

* In 2010-11, primarily accounts receivable ($1.42 billion) and other investments ($1.14 billion).

Liabilities

Liabilities represent the obligations that the Government has to others arising from past transactions or events. In the past five years, the SFS liabilities were as follows:

* In 2010-11, primarily accounts payable ($2.22 billion).

From 2006-07 to 2010-11, liabilities decreased by $457 million. This is the net result of a $2.74 billion decrease in public debt, partially offset by a $1.53 billion increase in pension liabilities. Information relating to public debt can be found in more detail in the public debt and debt charges section found on page 34.

The total pension liability has increased from $4.65 billion in 2006-07 to $6.18 billion in 2010-11. The increase is due to pension costs, including interest on the pension liabilities, exceeding payments to the pension plans and retirees. The liabilities are projected to increase until the majority of plan members are retired around 2014. In subsequent years, the liabilities will decline as pensions are paid to retired members.

Government of Saskatchewan – 2010-11 Public Accounts 35

Financial Statement Discussion and Analysis

Summary Financial Statements

Non-financial Assets

Non-financial assets typically represent resources that the Government can use to provide services in the future. Non-financial assets primarily consist of tangible capital assets but also include inventories held for consumption and prepaid expenses.

Tangible Capital Assets

The Statement of Financial Position reports the net book value of tangible capital assets held by government service organizations and does not include the capital assets held by government business enterprises. The capital assets held by government business enterprises are included in the Investment in (or net assets of) Government Business Enterprises reported on the Statement of Financial Position and disclosed in schedule 3 of the SFS. The net book value of capital assets of government service organizations in the past five years is as follows:

*	The increase in net book value of tangible capital assets in 2010 is primarily due to the impact of the first-time inclusion of Boards of Education.

The net book value represents the original cost of capital assets net of accumulated amortization and any write-down in value. The net book value of capital assets held by the Government has steadily increased over the last five years indicating an increase in the future service potential of the Government’s capital assets.

36 Government of Saskatchewan – 2010-11 Public Accounts

Financial Statement Discussion and Analysis

Summary Financial Statements

Assessment of Financial Condition

Financial condition describes a government’s financial health or its ability to meet its existing financial obligations, both with respect to its service commitments to the public and its financial commitments to creditors, employees and others. The following assessment of the Government’s financial condition considers three elements: sustainability, flexibility and vulnerability.

Sustainability

Sustainability is the degree to which a government can maintain its existing service commitments and meet its existing financial obligations without increasing its debt or tax burden relative to the economy within which it operates.

Net Debt to the Province’s Gross Domestic Product

Gross domestic product (GDP) is a measure of the value of the goods and services produced during a year, indicating the size of the provincial economy. Net debt is the difference between a government’s liabilities and financial assets and represents the future revenue that is required to pay for past transactions and events. Net debt as a percentage of the Province’s GDP provides a measure of the level of financial demands placed on the economy by the Government’s spending and taxation policies. A higher ratio means the net debt of the Government is more onerous on the economy, which may not be sustainable. Therefore, a lower net debt to GDP ratio is desired and indicates higher sustainability.

The overall downward trend illustrated by this ratio is a result of growth in the provincial economy together with a declining net debt over the ten-year period.

Government of Saskatchewan – 2010-11 Public Accounts 37

Financial Statement Discussion and Analysis

Summary Financial Statements

Assessment of Financial Condition (continued)

Net Debt to Total Revenue

Another measure of a government’s sustainability is net debt as a percentage of total revenue. Net debt provides a measure of the future revenue that is required to pay for past transactions and events. A lower net debt to revenue ratio indicates higher sustainability, as less time is required to eliminate net debt.

When expressed as a percentage of total revenue, the Government’s net debt has declined from 133.49 per cent to 30.69 per cent of total revenue since 2001-02. The reduction in this ratio indicates that the Government’s annual revenue has been sufficient not only to pay for current transactions and events, but also to pay off a portion of past deficits.

38 Government of Saskatchewan – 2010-11 Public Accounts

Financial Statement Discussion and Analysis

Summary Financial Statements

Assessment of Financial Condition (continued)

Flexibility

Flexibility is the degree to which a government can change its debt or tax burden and still meet its existing service commitments and financial obligations.

Debt Charges to Total Revenue

A debt charges to revenue ratio, often referred to as the interest bite, indicates the proportion of provincial revenue that is required to pay interest charges on public debt and therefore, is not available to pay for essential public services and programs. A lower ratio means that there is more money available to provide government services.

Over the last ten years, the interest bite has decreased due to both increased revenue and decreased interest costs. In 2010-11, the Government spent approximately 5.75 cents of each dollar of revenue on debt charges on public debt, compared to 13.79 cents in 2001-02. This reduction leaves more resources available to the Government to provide services without increasing its revenue.

Government of Saskatchewan – 2010-11 Public Accounts 39

Financial Statement Discussion and Analysis

Summary Financial Statements

Assessment of Financial Condition (continued)

Own-source Revenue to the Province’s Gross Domestic Product

This ratio measures the extent to which the Government is taking income out of the provincial economy, either through taxation or user fees. An increase in this ratio indicates that the Government’s own-source revenue is growing faster than the economy, reducing the Government’s flexibility to increase revenue without slowing the growth of the provincial economy.

Own-source revenue as a percentage of GDP has remained relatively stable over the last ten years meaning that the Government has not significantly changed its demands on the provincial economy over this time. This indicates that the Government’s flexibility is largely unchanged over the last ten years.

40 Government of Saskatchewan – 2010-11 Public Accounts

Financial Statement Discussion and Analysis

Summary Financial Statements

Assessment of Financial Condition (continued)

Vulnerability

Vulnerability is the degree to which a government is dependent on sources of funding outside of its control or is exposed to risks that could impair its ability to meet its existing service commitments and financial obligations.

Transfers from the Federal Government to Total Revenue

The Government has no control over the amount of federal transfers that it receives each year. Transfers from the federal government as a percentage of total revenue is therefore an indicator of the degree of vulnerability the Government has as a result of reliance on the federal government for revenue. Generally, a decreasing ratio indicates that a government is less reliant on federal transfers to fund its programs, making it less vulnerable.

For the past ten years, the percentage of total revenue attributable to transfers from the federal government was as follows:

In 2010-11, 17.07 per cent of the Government’s revenue came from transfers from the federal government with the remainder coming from Saskatchewan sources. The Government’s ability to fund essential programs and services from own-source revenue has remained fairly stable over the past several years.

Government of Saskatchewan – 2010-11 Public Accounts 41

Financial Statement Discussion and Analysis

Risks and Uncertainties

The Government is subject to risks and uncertainties that arise from variables which the Government can not directly control. These risks and uncertainties include:

•	changes in economic factors such as economic growth, commodity and non-renewable resource prices, inflation, interest rates, population growth, personal income and retail sales;

•	financial risks including interest rate risk, foreign exchange rate risk, credit risk and liquidity risk;

•	changes in transfers from the federal government;

•	utilization of Government services, such as crop insurance, health care and social services;

•	other unforeseen developments including natural and other disasters, changes in environmental liabilities and legal obligations; and

•	changes in accounting standards.

The Government has implemented strategies that limit its exposure to such risks and uncertainties. The key component of this fiscal management plan is The Growth and Financial Security Act (the Act), legislation that provides a fiscal framework to ensure balanced GRF budgets and the appropriate use of surplus revenue.

The Act imposes discipline into the budgetary process and reduces risk to external events by requiring annual program reviews and the tabling of balanced budgets and debt management plans, yet the fiscal framework has the flexibility to respond to sudden and rapid changes in factors beyond Government’s influence or control. Specifically, the Act:

•	requires a four-year financial plan with balanced budgets to be prepared annually;

•	requires a four-year debt management plan to be prepared annually;

•	requires actual revenue in each fiscal year to be greater than actual expense;

•	requires deficits to be fully offset in the following fiscal year;

•	establishes the Growth and Financial Security Fund to assist in providing for financial security from year to year and to provide a source of funds available for use for promoting or enhancing the economic development of Saskatchewan;

•	requires 50 per cent of any GRF pre-transfer surplus to be transferred to the Growth and Financial Security Fund;

•	requires the remaining 50 per cent of any GRF pre-transfer surplus to be applied to the Debt Retirement Fund; and

•	contains provisions for extraordinary events, such as natural or other disasters, that lead to unanticipated spending or reduced revenue.

In addition, recognizing that Saskatchewan is heavily reliant on non-renewable resources and external events, the Government takes a prudent approach in developing its budget assumptions for macroeconomic variables and non-renewable resource prices. Government makes use of a number of forecasts from national forecasting agencies and banks, private industry and private sector analysts when developing the underlying assumptions to fiscal forecasts both at budget and throughout the fiscal year.

The fiscal impact of changes in the underlying economic assumptions, including non-renewable resource prices, are estimated on a regular basis in order to quantify the risk associated with each forecast assumption. By understanding the size of the risk inherent in the fiscal projections, Government is better able to make sound financial decisions.

Finally, the Government requires regular fiscal updates during the fiscal year. These updates are based on the continual monitoring of monthly financial results and current economic conditions, as well as the early identification of potential spending pressures. The Government publishes quarterly reports that contain revised fiscal and economic forecasts so that Saskatchewan residents are well-informed as to the Government’s current fiscal position and the risks and uncertainties associated with the Government’s fiscal plan.

Risk management specific to public debt is discussed in note 3 of the GRF financial statements and note 3 of the SFS.

42 Government of Saskatchewan – 2010-11 Public Accounts

General Revenue Fund Financial Statements

General Revenue Fund

Responsibility for the General Revenue Fund Financial

Statements

The Government is responsible for the General Revenue Fund Financial Statements. The Government maintains a system of accounting and administrative controls to ensure that accurate and reliable financial statements are prepared and to obtain reasonable assurance that transactions are authorized, assets are safeguarded, and financial records are maintained.

The Provincial Comptroller prepares these statements in accordance with the Government's stated accounting policies, using the Government's best estimates and judgement when appropriate.

The Provincial Auditor expresses an independent opinion on these statements. His report, which appears on the following page, provides the scope of his audit and states his opinion.

Treasury Board approves the General Revenue Fund Financial Statements. The statements are tabled in the Legislative Assembly as part of the Public Accounts and referred to the Standing Committee on Public Accounts for review.

On behalf of the Government of the Province of Saskatchewan.

/s/ Ken Krawetz

Ken Krawetz

Deputy Premier

Minister of Finance

/s/ Karen Layng

Karen Layng

Deputy Minister of Finance

/s/ Terry Paton

Terry Paton

Provincial Comptroller

Regina, Saskatchewan

June 2011

Government of Saskatchewan – 2010-11 Public Accounts 45

General Revenue Fund

Independent Auditor's Report

To the Members of the Legislative Assembly of Saskatchewan

I have audited the accompanying financial statements of the General Revenue Fund, which comprise the statement of financial position as at March 31, 2011, and the statements of operations, accumulated deficit, change in net debt, and cash flow for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian public sector accounting principles for Treasury Board’s approval, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Basis for Qualified Opinion

The Government through the General Revenue Fund is responsible for the liabilities of several pension plans and a disability benefit plan. Notes 1 and 4 state that the pension liabilities and a disability benefit liability are not recorded in these financial statements. Canadian public sector accounting principles require that the pension and disability benefit liabilities be recorded in the financial statements. Had the pension and disability benefit liabilities been recorded, liabilities and accumulated deficit would increase by $6,024 million (2010 - $5,783 million) as at March 31, 2011 and, for the year, expenses would increase by $241 million (2010 - $341 million), and surplus would decrease by the same amounts.

The Government records transactions between the General Revenue Fund and the Growth and Financial Security Fund (GFSF) as revenue or expense of the General Revenue Fund. The substance of the transactions between the General Revenue Fund and the GFSF is that the amounts the General Revenue Fund owes the GFSF must be repaid by the GFSF to the General Revenue Fund. Canadian public sector accounting principles do not allow the General Revenue Fund to record changes in the amount due to the GFSF as revenue or expense of the General Revenue Fund.

Government of Saskatchewan – 2010-11 Public Accounts 47

General Revenue Fund

The financial statements show an expense (as Transfer to the GFSF) of $48 million (2010 - net Transfer from the GFSF of $257 million). It is not appropriate to record an expense because the GFSF must return all amounts due to the General Revenue Fund. Likewise, it is not appropriate to record revenue for it is only the amount the GFSF has returned to the General Revenue Fund in the year. Instead of recording an expense or revenue, the financial statements should record an asset equal to the amount it owed or paid to the GFSF. Had the Government properly recorded the transactions, Total Financial Assets would increase by $1,006 million (2010 - $958 million) and accumulated deficit would decrease by the same amount as at March 31, 2011 and, Surplus for the year would increase by $48 million (2010 - decrease by $257 million).

Qualified Opinion

In my opinion, except for the effects of not recording pension and disability benefit liabilities and recording the amounts that the General Revenue Fund has paid to the GFSF as expense of the General Revenue Fund as described in the preceding paragraphs, the financial statements present fairly, in all material respects, the financial position of the General Revenue Fund as at March 31, 2011, and the results of its operations, the changes in its net debt, and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.

Usefulness of these Financial Statements is Limited

These financial statements contain qualifications from Canadian public sector accounting standards and only report transactions and events of the General Revenue Fund, a component of the Summary Financial Statements. Therefore, readers should not use the General Revenue Fund financial statements to understand and assess the Government’s overall management of public financial affairs and provincial resources. Rather, they should use the Summary Financial Statements of the Government of the Saskatchewan.

The Government is comprised of over 270 different entities other than the General Revenue Fund. The extent of the Government’s controlled financial activities outside of this Fund is significant. Consideration of the financial activities of these entities, and adjusting for the qualifications to the General Revenue Fund has the following impact: total financial assets increase by $7,188 million (2010 - $6,661 million); total liabilities increase by $7,295 million (2010 - $6,582 million); net debt increases by $107 million (2010 - decreases by $79 million); total non-financial assets increase by $3,567 million (2010 - $3,304 million); accumulated deficit decreases by $3,460 million (2010 - $3,382 million); total revenue including net income from government business enterprises increases by $2,237 million (2010 - $1,469 million); total expense increases by $2,298 million (2010 - $2,303 million); and the annual surplus decreases by $61 million (2010 - $834 million).

Only the Summary Financial Statements report the full nature and extent of the overall financial affairs and resources of the Government of the Province of Saskatchewan.

/s/ Bonnie Lysyk

Bonnie Lysyk, MBA, CA

Provincial Auditor

Regina, Saskatchewan

June 16, 2011

48 Government of Saskatchewan – 2010-11 Public Accounts

General Revenue Fund

Statement of Financial Position
As at March 31, 2011
(thousands of dollars)

	2011			2010
Financial Assets
Cash and temporary investments (note 2)		457,912			858,427
Accounts receivable (schedule 1)		857,866			855,117
Deferred charges		7,128			9,775
Loans to Crown corporations (schedule 2)		609,044			818,751
Other loans (schedule 3)		91,165			100,168
Equity investment in Crown Investments Corporation of Saskatchewan		1,058,889			1,051,152
Total Financial Assets		3,082,004			3,693,390
Liabilities
Accounts payable and accrued liabilities (schedule 4)		1,513,501			1,896,708
Deposits held (schedule 5)		403,672			396,122
Unearned revenue		91,323			75,642
Public debt
Government general debt (note 3)(schedule 6)		4,135,226			4,140,482
Crown corporation general debt (note 3)(schedule 6)		609,044			818,751
Unamortized foreign exchange gain		5,231			3,939
Total Liabilities		6,757,997			7,331,644
Net Debt		(3,675,993	)		(3,638,254	)
Non-financial Assets
Prepaid expenses		11,435			7,004
Inventories held for consumption		120,652			109,411
Tangible capital assets (schedule 9)		3,045,147			2,975,411
Total Non-financial Assets		3,177,234			3,091,826
Accumulated Deficit		(498,759	)		(546,428	)
Employee future benefits (note 4)
Contingencies (note 5)
Guaranteed debt (note 5)(schedule 8)
Contractual obligations (note 6)
The accompanying notes and schedules are an integral part of these financial statements.

Government of Saskatchewan – 2010-11 Public Accounts 49

General Revenue Fund

Statement of Operations
For the Year Ended March 31, 2011
(thousands of dollars)
	2011						2010
	Budget			Actual			Actual
Revenue
Taxation		4,859,200			5,131,642			4,732,273
Non-renewable resources		2,108,000			2,527,799			1,910,624
Transfers from government entities		768,500			964,682			1,249,096
Other own-source revenue		514,500			836,307			770,432
Transfers from the federal government		1,699,700			1,600,248			1,604,033
Total Revenue (schedule 10)		9,949,900			11,060,678			10,266,458
Expense
Ministries and Agencies
Advanced Education, Employment and Immigration1		846,131			935,426			866,110
Agriculture		385,776			482,306			373,246
Corrections, Public Safety and Policing		336,205			390,156			340,314
Education		1,312,414			1,363,639			1,334,346
Energy and Resources		37,720			77,621			40,546
Enterprise and Innovation		9,547			24,114			22,497
Enterprise Saskatchewan		37,036			39,586			45,406
Environment		174,299			213,895			172,304
Executive Council		12,177			11,629			8,478
Finance		324,827			314,102			326,558
Finance Debt Servicing (schedule 14)		435,000			424,334			479,962
First Nations and Métis Relations		85,740			71,630			86,842
Government Services		12,472			10,972			15,215
Government Services - commercial operations (schedule 11)		-			83,868			82,030
Health		4,202,106			4,547,793			3,934,231
Highways and Infrastructure		402,939			427,471			418,279
Highways and Infrastructure - commercial operations (schedule 11)		-			5,925			3,281
Information Technology Office		16,472			16,744			11,834
Information Technology Office - commercial operations (schedule 11)		-			1,931			1,574
Innovation Saskatchewan		1,318			9,818			-
Intergovernmental Affairs		-			-			3,295
Justice and Attorney General		140,350			145,871			145,293
Municipal Affairs		382,207			363,669			409,956
Office of the Provincial Capital Commission		10,082			10,166			-
Office of the Provincial Secretary		3,417			3,466			4,879
Public Service Commission		36,873			36,238			50,229
Saskatchewan Research Council		16,633			16,633			15,016
Social Services		753,703			795,778			740,087
Tourism, Parks, Culture and Sport		110,071			102,289			129,703
Legislative Assembly and its Officers
Chief Electoral Officer		1,679			2,023			1,679
Children's Advocate		1,621			1,648			1,628
Conflict of Interest Commissioner		156			298			143
Information and Privacy Commissioner		927			964			874
Legislative Assembly		23,950			23,081			23,295
Ombudsman		2,221			2,228			2,152
Provincial Auditor		8,017			8,028			7,471
Total Expense (schedules 12 and 13)		10,124,086			10,965,340			10,098,753
Pre-transfer (deficit) surplus		(174,186	)		95,338			167,705
Transfer to the Growth and Financial Security Fund		-			(47,669	)		(83,853	)
Transfer from the Growth and Financial Security Fund		194,186			-			340,648
Surplus		20,000			47,669			424,500

1	For 2011, Advanced Education, Employment and Immigration includes expenses for which administration has been transferred to the Ministry of Labour Relations and Workplace Safety and the Ministry of Social Services.

The accompanying notes and schedules are an integral part of these financial statements.

50 Government of Saskatchewan – 2010-11 Public Accounts

General Revenue Fund

Statement of Accumulated Deficit
For the Year Ended March 31, 2011
(thousands of dollars)

	2011						2010
	Budget			Actual			Actual

Accumulated deficit, beginning of year		(546,428	)		(546,428	)		(970,928	)
Surplus		20,000			47,669			424,500
Accumulated Deficit, End of Year		(526,428	)		(498,759	)		(546,428	)
Statement of Change in Net Debt
For the Year Ended March 31, 2011
(thousands of dollars)

		2011						2010
	Budget			Actual			Actual

Surplus		20,000			47,669			424,500
Tangible Capital Assets
Acquisitions (schedule 9)		(347,983	)		(390,042	)		(388,541	)
Amortization (schedule 9)		165,903			179,522			160,175
Net loss (gain) on disposal		18,000			(7,138	)		(13,284	)
Net transfers to (from) government organizations		-			127,737			(1,396	)
Proceeds on disposal		-			19,914			40,332
Write-downs (schedule 9)		-			271			180
Net Acquisition of Tangible Capital Assets		(164,080	)		(69,736	)		(202,534	)
Other Non-financial Assets
Net acquisition of prepaid expenses		-			(4,431	)		(102	)
Net acquisition of inventories held for consumption		-			(11,241	)		(12,066	)
Net Acquisition of Other Non-financial Assets		-			(15,672	)		(12,168	)

(Increase) decrease in net debt		(144,080	)		(37,739	)		209,798
Net debt, beginning of year		(3,638,254	)		(3,638,254	)		(3,848,052	)
Net Debt, End of Year		(3,782,334	)		(3,675,993	)		(3,638,254	)
The accompanying notes and schedules are an integral part of these financial statements.

Government of Saskatchewan – 2010-11 Public Accounts 51

General Revenue Fund

Statement of Cash Flow
For the Year Ended March 31, 2011
(thousands of dollars)

	2011			2010
Operating Activities
Surplus		47,669			424,500
Non-cash items included in surplus (schedule 15)		23,472			(10,122	)
Net change in non-cash operating activities (schedule 15)		(383,300	)		226,875
Cash (Used for) Provided by Operating Activities		(312,159	)		641,253
Capital Activities
Acquisition of tangible capital assets (schedule 9)		(390,042	)		(388,541	)
Proceeds on disposal of tangible capital assets		19,914			40,332
Cash Used for Capital Activities		(370,128	)		(348,209	)
Investing Activities
Loan advances		(197,319	)		(352,586	)
Loan repayments		408,767			114,977
Sinking funds
Contributions for general debt		(60,045	)		(64,558	)
Contributions received for Crown corporation general debt		5,436			4,644
Redemptions for general debt		502,972			892,655
Redemptions disbursed for Crown corporation general debt		-			(48,993	)
Equity investment in Crown Investments Corporation of Saskatchewan		120,000			-
Cash Provided by Investing Activities (schedule 15)		779,811			546,139
Financing Activities
Proceeds from general debt		182,719			508,629
Repayment of general debt		(688,308	)		(867,047	)
Increase (decrease) in deposits held		7,550			(198,233	)
Cash Used for Financing Activities		(498,039	)		(556,651	)
(Decrease) increase in cash and temporary investments		(400,515	)		282,532
Cash and temporary investments, beginning of year		858,427			575,895
Cash and Temporary Investments, End of Year		457,912			858,427
The accompanying notes and schedules are an integral part of these financial statements.

52 Government of Saskatchewan – 2010-11 Public Accounts

General Revenue Fund

Notes to the Financial Statements

As at March 31, 2011

1. Significant Accounting Policies

Basis of accounting

These financial statements are prepared in accordance with Canadian public sector accounting standards, with the following exceptions:

•	transfers to and from the Growth and Financial Security Fund are included in the determination of surplus for the year; and

•	pension liabilities and a disability benefit liability are not recorded in the financial statements. The General Revenue Fund accounts for defined benefit pension plans and a disability benefit plan on a cash basis.

Reporting entity

The General Revenue Fund is the general fund, which receives all revenues unless otherwise specified by law. Spending from the General Revenue Fund is appropriated by the Legislative Assembly.

Other government entities such as special purpose funds, government business enterprises and other Crown corporations and agencies report separately in other financial statements. Only financial transactions to or from these other entities are included in the General Revenue Fund. The net expenses/recoveries for revolving funds’ operations are charged to expense.

Government business enterprises are self-sufficient government organizations that have the financial and operating authority to sell goods and services to individuals and organizations outside the government reporting entity as their principal activity.

The Government’s Summary financial statements, which include the financial activities of the General Revenue Fund and other government entities, are provided separately.

Specific accounting policies

Financial assets

Financial assets are assets that could be used to discharge existing liabilities or finance future operations and are not for consumption in the normal course of operations.

Temporary investments are recorded at the lower of cost or market.

Deferred charges include issue costs and net discounts or premiums incurred on the issue of general debt and related derivative instruments. They are recorded at cost and amortized on a straight-line basis over the remaining life of the debt issue.

Loans to Crown corporations and Other loans generally have fixed repayment terms and are interest bearing. Promissory notes issued by Crown corporations are recorded at par; all other loans are recorded at cost. Loans to Crown corporations are presented net of amounts Crown corporations have contributed to sinking funds and net of government business enterprise specific debt.

Equity investment in Crown Investments Corporation of Saskatchewan is an advance to the corporation to form its equity capitalization and is recorded at cost.

Where there has been a loss in value that is other than a temporary decline, loans and equity investments are written down to recognize the loss.

Liabilities

Liabilities are present obligations to individuals and organizations outside of the General Revenue Fund as a result of transactions and events occurring prior to year-end, which will be satisfied in the future through the transfer or use of assets or another form of economic settlement. They consist of obligations to provide authorized transfers where any eligibility criteria have been met, to repay borrowings, to pay for goods and services acquired prior to year-end and to deliver goods or services in the future where payment has been received. Liabilities include contingencies when it is likely that a liability exists and the amount can be reasonably estimated.

Unearned revenue consists mainly of revenue for Crown mineral leases and motor vehicle fees that will be earned in a subsequent fiscal year.

Government of Saskatchewan – 2010-11 Public Accounts 53

General Revenue Fund

Notes to the Financial Statements

1. Significant Accounting Policies (continued)

Public debt is recorded at par, and is comprised of:

•	government general debt, which is debt issued by the General Revenue Fund to fund government spending;

•	Crown corporation general debt, which is debt issued by the General Revenue Fund and subsequently loaned to a Crown corporation; and

•

government business enterprise specific debt, which is debt issued by the General Revenue Fund specifically on behalf of government business enterprises, where the government expects to realize the receivables from the government business enterprises and settle the external debt simultaneously. Government business enterprises for which the government issues debt specifically are listed in schedule 6.

On the Statement of Financial Position, public debt is presented net of loans to Crown corporations for government business enterprise specific debt. Debt servicing costs on the Statement of Operations are presented net of reimbursements of interest for government business enterprise specific debt.

Certain debenture issues require contributions to a sinking fund. These obligations are recorded at principal less sinking fund balances where applicable. The General Revenue Fund is reimbursed by Crown corporations for all sinking fund contributions made for debt incurred on their behalf. Premiums and discounts on long-term investments within these sinking funds are amortized on a constant yield basis.

Debt issues and sinking fund investments held in foreign currencies are converted to the Canadian dollar equivalent at the exchange rate in effect at March 31.

Premiums, discounts and issue costs incurred on general debt are recorded as deferred charges. Premiums, discounts and commissions on government business enterprise specific debt are netted against reimbursements by these entities.

Unamortized foreign exchange gain or loss includes unrealized foreign exchange gains and losses resulting from conversion of general debt and sinking fund investments held in a foreign currency to the Canadian dollar equivalent at the exchange rate in effect at March 31. Unrealized foreign exchange gains and losses are amortized on a straight-line basis over the remaining life of the debt issue. Realized foreign exchange gains and losses resulting from general debt transactions are included in debt servicing costs.

Guaranteed debt includes guarantees by the Minister of Finance made through specific agreements or legislation to pay all or part of the principal and/or interest on a debt obligation in the event of default by the borrower. Loss provisions on guaranteed debt are recorded as a liability and an expense when it is likely that a loss will occur. The amount of the loss provision represents the best estimate of future payments net of recoveries.

Non-financial assets

Non-financial assets are acquired, constructed or developed assets that do not normally provide resources to discharge existing liabilities, but instead are normally employed to deliver government services, may be consumed in the normal course of operations and are not for sale in the normal course of operations.

Inventories held for consumption are recorded at cost and are expensed as they are consumed.

Tangible capital assets are recorded at cost and include all amounts directly attributable to the acquisition, construction, development or betterment of the asset but does not include interest. Tangible capital assets are generally amortized on a straight-line basis over the estimated useful life of each asset.

Revenue

Revenues are recorded on the accrual basis. For corporate and individual income taxes, cash received from the federal government is used as the basis for estimating the tax revenue. Government transfers are recognized as revenue in the period during which the transfer is authorized and any eligibility criteria are met.

Expense

Expenses are recorded on the accrual basis, except for costs related to defined benefit pension plans and a disability benefit plan, which are recorded on the cash basis. Government transfers are recognized as expenses in the period during which the transfer is authorized and any eligibility criteria are met.

54 Government of Saskatchewan – 2010-11 Public Accounts

General Revenue Fund

Notes to the Financial Statements

1. Significant Accounting Policies (continued)

Measurement uncertainty

Uncertainty in the determination of the amount at which an item is recognized or disclosed in financial statements is known as measurement uncertainty. Such uncertainty exists when there is a variance between the recognized or disclosed amount and another reasonably possible amount.

Measurement uncertainty that may be material to these financial statements exists:

•	in corporate and individual income tax revenue of $2,951.1 million (2010 - $2,772.3 million) because final tax assessments may differ from initial estimates on which cash payments are based;

•	in oil and natural gas non-renewable resource revenue of $1,303.8 million (2010 - $1,334.7 million) because of price and production sensitivities in the royalty revenue structures;

•	in resource surcharge non-renewable resource revenue of $360.8 million (2010 - $475.6 million) because the final valuation of resource sales may differ from initial estimates on which installments are based;

•	in potash non-renewable resource revenue of $262.5 million (2010 - $(183.9) million) because actual operating profits may differ from initial estimates;

•	in the Canada Health Transfer and Canada Social Transfer revenue of $1,138.0 million (2010 - $1,154.2 million) because of changes in the economic and demographic conditions in the Province and the country;

•	in agricultural income stability programs expense of $141.2 million (2010 - $131.4 million) because actual program uptake may differ from initial estimates which are based on farm income forecasts; and

•	in the disclosure of liabilities for defined benefit pension plans of $6,004.6 million (2010 - $5,760.7 million) because actual experience may differ from actuarial estimations and assumptions.

While best estimates are used for reporting items subject to measurement uncertainty, it is reasonably possible that changes in future conditions, occurring within one fiscal year, could require a material change in the amounts recognized or disclosed.

2. Temporary Investments

Temporary investments are recorded at $459.8 million (2010 - $782.9 million), consist of investment grade money market securities and are generally for less than 30 days. Due to their short-term nature, market value approximates cost.

3. Risk Management of Public Debt

Funds are borrowed in both domestic and foreign capital markets by issuing Government of Saskatchewan securities. This borrowing activity finances government operations and the activities of Crown corporations. These transactions result in exposure to four types of risk: interest rate risk, foreign exchange rate risk, credit risk and liquidity risk.

To manage these risks, a preference for fixed rate Canadian dollar denominated debt is maintained. Where market conditions dictate that other forms of debt are more attractive, opportunities are sought to use derivative financial instruments to reduce these risks. A derivative financial instrument is a contract, the value of which is based on the value of another asset or index.

Interest rate risk is the risk that debt servicing costs will increase due to changes in interest rates. This risk is managed by issuing debt securities at predominantly fixed rates of interest rather than at floating rates of interest.

Floating rate debt is defined as the sum of floating rate debentures, short-term promissory notes, fixed rate debt maturing within one year and Saskatchewan Savings Bonds. Opportunities are sought to effectively convert floating rate debt into fixed rate debt through the use of interest rate swaps. There are interest rate swaps on a notional value of debt of $66.0 million (2010 - $66.0 million). At March 31, 2011, 90.3 per cent (2010 - 85.6 per cent) of the gross debt effectively carried a rate of interest that was fixed for greater than a one-year period.

Gross debt includes floating rate debt of $1,027.1 million (2010 - $1,535.5 million). A one percentage point increase in interest rates would decrease the surplus by $8.9 million in 2010-11.

Foreign exchange rate risk is the risk that debt servicing costs will increase due to a decline in the value of the Canadian dollar relative to other currencies. This risk is managed by maintaining a preference for issuing debt that is denominated in Canadian dollars. Where debt has been issued in foreign currencies, opportunities are sought to effectively convert it into Canadian dollar debt through the use of cross currency swaps. At March 31, 2011, 97.5 per cent (2010 - 97.4 per cent) of the gross debt is effectively denominated in Canadian dollars. A one cent change in the value of the U.S. dollar compared to the Canadian dollar from the March 31, 2011 level would have an insignificant effect on debt and debt servicing costs.

Government of Saskatchewan – 2010-11 Public Accounts 55

General Revenue Fund

Notes to the Financial Statements

3. Risk Management of Public Debt (continued)

The following foreign denominated items have been hedged to Canadian dollars using cross currency swaps:

•	debentures totalling 1,225.0 million U.S. dollars (2010 - 1,225.0 million) fully hedged to $1,619.3 million Canadian (2010 - $1,619.3 million);

•	debentures totalling 300.0 million Swiss francs (2010 - 300.0 million) fully hedged to $274.7 million Canadian (2010 - $274.7 million); and

•	interest payments on debentures of 275.0 million U.S. dollars (2010 - 275.0 million) hedged to Canadian dollars at an exchange rate of 1.2325 (2010 - 1.2325).

In total, there are cross currency swaps on a notional value of debt of $2,507.5 million (2010 - $2,507.5 million). The effectiveness of these hedges is assessed on an ongoing basis by monitoring the credit ratings of the counterparties to the hedges.

Credit risk is the risk that a loss may occur from the failure of another party to meet its obligations under a derivative financial instrument contract. This risk is managed by dealing only with counterparties that have good credit ratings and by establishing limits on individual counterparty exposures and monitoring those exposures on a regular basis. At March 31, 2011, 100 per cent (2010 - 100 per cent) of counterparties held a Standard and Poor’s credit rating of A or higher.

Liquidity risk is a risk that financial commitments will not be met over the short term. This risk is managed by distributing debt maturities over many years, maintaining sinking funds on long-term debt issues and maintaining adequate cash reserves and short-term borrowing programs as contingent sources of liquidity.

4. Employee Future Benefits

Pension Plans

The Government sponsors several defined benefit pension plans and a defined contribution pension plan.

Pension fund assets of government sponsored defined benefit and defined contribution pension plans are invested in fixed income securities, equities, real estate and short-term monetary items. The investment in Government of Saskatchewan securities is insignificant for all plans.

Defined benefit plans

Defined benefit plans provide benefits based on length of service and pensionable earnings. A typical defined benefit plan provides pensions equal to 2.0 per cent of a member’s average five years highest salary, multiplied by the years of service to a maximum of 35 years. Members contribute a percentage of salary, which may vary based on age, to their plan. Pensions and contribution rates are integrated with the Canada Pension Plan.

The two main plans are the Teachers’ Superannuation Plan (TSP) and the Public Service Superannuation Plan (PSSP). Other plans include Judges of the Provincial Court Superannuation Plan (Judges), Saskatchewan Transportation Company Employees Superannuation Plan (STC), Anti-TB League Employees Superannuation Plan (ATB) and the Saskatchewan Pension Annuity Fund, an annuity underwriting operation. Obligations for allowances payable to members of the former Members of the Legislative Assembly Superannuation Fund (MLA) are part of the General Revenue Fund.

Actuarial valuations are performed at least triennially. An actuary extrapolates these valuations when a valuation is not done in the current fiscal year. Valuations are based on a number of assumptions about future events, such as inflation rates, interest rates, wage and salary increases and employee turnover and mortality. These assumptions reflect estimates of expected long-term rates and short-term forecasts. Estimates vary based on the individual plan.

The accrued benefit obligation is determined using the projected benefit method prorated on services. Pension fund assets are valued at market related values based on actual market values averaged over a four-year period. In the periods between valuations, the actuary estimates the market related value of pension fund assets using expected long-term rates of return for the individual plans.

The Government is required to match member current service contributions for all plans except the PSSP and Judges. Separate pension funds are maintained for all plans except the PSSP and the MLA. The PSSP member contributions are deposited into the General Revenue Fund. All pension obligations arising under the PSSP and the MLA are paid from the General Revenue Fund.

56 Government of Saskatchewan – 2010-11 Public Accounts

General Revenue Fund

Notes to the Financial Statements

4. Employee Future Benefits (continued)

Information on the defined benefit plans is as follows:

	2011										2010
	TSP		PSSP			Others			Total		Total


Plan status	closed		closed			closed1				n/a		n/a
Member contribution rate (percentage of salary)		7.85		7.00-9.00	2		5.00-9.00	2		n/a		n/a
Number of active members		1,499		623			55			2,177		2,842
Average age of active members (years)		56.2		57.5			57.7			56.6		56.0
Number of former members entitled to deferred
pension benefits		4,583		94			10			4,687		4,779
Number of superannuates and surviving spouses		11,280		5,698			2,249			19,227		19,020
Actuarial valuation date	June 30/09		Dec. 31/08			Various				n/a		n/a
Long-term assumptions used
Rate of compensation increase (percentage)		3.50		3.50			3.50			n/a		n/a
Expected rate of return on plan assets (percentage)		6.60		n/a			5.75-6.15			n/a		n/a
Discount rate (percentage)		4.80		4.70			4.20-5.00			n/a		n/a
Inflation rate (percentage)		2.50		2.50			2.50			n/a		n/a
Expected average remaining service life (years)		4.0		1.5			1.5-7.5			n/a		n/a
Post-retirement index (percentage of annual increase in
Consumer Price Index)		80		70			70-75			n/a		n/a

1	Judges is open to new membership; all other plans are closed.

2	Contribution rate varies based on age upon joining the plan.

Based on the latest actuarial valuations, extrapolated to March 31, 2011, the present value of accrued pension benefits and the market related value of pension fund assets are shown in the table below:

(thousands of dollars)	2011												2010
	TSP1			PSSP			Others			Total			Total
Accrued benefit obligation,
beginning of year		5,152,049			1,898,650			323,160			7,373,859			7,216,147
Current period benefit cost		35,032			9,127			5,020			49,179			59,296
Plan amendment		-			-			-			-			(173	)
Interest cost		255,397			90,465			15,200			361,062			371,145
Actuarial losses		-			33,903			10,863			44,766			180,926
Benefit payments		(323,573	)		(121,377	)		(22,515	)		(467,465	)		(453,482	)
Accrued Benefit Obligation, End of Year		5,118,905			1,910,768			331,728			7,361,401			7,373,859
Plan assets, beginning of year		1,174,158			-			195,260			1,369,418			1,486,890
Employer contributions		89,271			119,065			6,131			214,467			173,376
Employee contributions		8,662			2,312			534			11,508			14,840
Return on plan assets		70,048			-			13,190			83,238			89,439
Actuarial gains		-			-			6,214			6,214			58,355
Benefit payments		(323,573	)		(121,377	)		(22,515	)		(467,465	)		(453,482	)
Plan Assets, End of Year 2		1,018,566			-			198,814			1,217,380			1,369,418
		4,100,339			1,910,768			132,914			6,144,021			6,004,441
Unamortized estimation adjustments3		(68,955	)		(64,768	)		(5,739	)		(139,462	)		(243,702	)
Total Pension Liabilities4		4,031,384			1,846,000			127,175			6,004,559			5,760,739

1	The TSP had an actual rate of return on plan assets of 10.8 per cent (2010 - 15.0 per cent).

2	At March 31, 2011, the market value of plan investments was $1,114.3 million (2010 - $1,233.1 million). Of this amount, 42.7 per cent (2010 - 42.9 per cent) was invested in fixed income securities and 44.9 per cent (2010 - 47.7 per cent) in equity investments.

Unamortized estimation adjustments are amortized against the net obligation over periods ranging from 3.7 to 4.0 years for the TSP, from 1.5 to 3.9 years for the PSSP and from 1.5 to 10.0 years for the other plans. These represent the expected average remaining service life of active plan members at the time the estimation adjustments arose.

Changes in assumptions can result in significantly higher or lower estimates of pension liabilities. A one percentage point decrease in the discount rate would result in a $624.2 million and $227.4 million increase in the pension liabilities for the TSP and the PSSP respectively, and a one percentage point increase would result in a $516.1 million and $189.2 million decrease in the pension liabilities for the TSP and the PSSP respectively.

Government of Saskatchewan – 2010-11 Public Accounts 57

General Revenue Fund

Notes to the Financial Statements

4. Employee Future Benefits (continued)

Defined contribution plans

Defined contribution plans provide pensions based on accumulated contributions and investment earnings. Employees contribute a percentage of salary.

The Government sponsors the Public Employees Pension Plan (PEPP), a multi-employer defined contribution plan. Employers are required to provide contributions at specified rates for employee current service. The General Revenue Fund has fully funded its share of contributions. The General Revenue Fund also contributes to the Saskatchewan Teachers’ Retirement Plan (STRP), sponsored by the Saskatchewan Teachers’ Federation.

Information on the defined contribution plans to which the General Revenue Fund contributes is as follows:

	2011							2010
	PEPP			STRP¹		Total		Total

Plan status	open				n/a		n/a		n/a
Member contribution rate (percentage of salary)		5.00-9.00	2		n/a		n/a		n/a
Government contribution rate (percentage of salary)		6.00-9.00	2		n/a		n/a		n/a
Number of active members, all employers		25,382			n/a		25,382		28,801
General Revenue Fund participation
Number of active members		11,956			n/a		11,956		14,373
Member contributions (thousands of dollars)		52,784			n/a		52,784		52,023
Government contributions (thousands of dollars)		57,384			60,654		118,038		111,809

1	The STRP is a contributory defined benefit pension plan. The Government contributes an amount which is set through provincial negotiations.

2	Contribution rate varies based on employee group.

Pension expense

Pensions are accounted for on a cash basis. The pension liabilities are not recorded in the financial statements.

(thousands of dollars)	2011		2010


Defined benefit plans		214,467		173,376
Defined contribution plans		118,038		111,809
Total Pension Expense		332,505		285,185

Other Employee Future Benefits

The Government provides long-term disability benefits to members of the TSP. The disability benefit plan liability of $19.2 million (2010 - $22.6 million) is not recorded in the financial statements. The benefit expense on a cash basis is $4.6 million (2010 - $5.4 million).

5. Contingencies

Guaranteed debt

The Minister of Finance has guaranteed the debt of others of $35.4 million (2010 - $17.1 million). Schedule 8 provides a listing of guaranteed debt.

Lawsuits

The Government is involved in various legal actions, the outcome of which is not determinable. Up to $396.3 million may be paid depending on the outcome of lawsuits in progress. The lawsuits in progress include aboriginal land claims, claims for damages to persons and property, disputes of taxes and various other legal actions.

58 Government of Saskatchewan – 2010-11 Public Accounts

General Revenue Fund

Notes to the Financial Statements

6. Contractual Obligations

Operating and capital lease obligations are as follows:

(thousands of dollars)	Operating		Capital
Future minimum lease payments
2011-12		38,972		4,764
2012-13		34,105		3,876
2013-14		30,154		1,831
2014-15		25,358		1,338
2015-16		19,022		1,006
Thereafter		68,672		3,901
		216,283		16,716
Interest and executory costs		-		(7,369	)
Total Lease Obligations		216,283		9,347

Significant other contractual obligations include:

•	contracts for the construction and acquisition of tangible capital assets of $389.3 million over the next four years;

•	computer service agreements of $68.3 million over the next five years;

•	research and development projects for agriculture technology and opportunities in the agri-food industry of $26.9 million over the next five years;

•	beverage container collection and recycling programs of $20.6 million in 2011-12;

•	fire suppression aerial fleet renewal agreements of $13.9 million over the next three years;

•	projects to expand innovation and enhance the competitive ability of the Saskatchewan economy of $12.9 million over the next five years; and

•	treaty land entitlement agreements valued at approximately $6.9 million over the next three years, and rural municipality and school division tax loss compensation of approximately $13.1 million as land achieves reserve status over the course of the agreements.

7. Related Party Transactions

Included in these financial statements are transactions with various Saskatchewan Crown corporations, agencies, boards, and commissions related to the General Revenue Fund by virtue of common control by the Government of Saskatchewan.

Transactions include transfers to related parties of $5,272.4 million (2010 - $4,534.2 million).

Routine operating transactions with related parties are recorded at the rates charged by those organizations and are settled on normal trade terms. These transactions include:

•	payments to Saskatchewan Telecommunications Holding Corporation of approximately $23.8 million (2010 - $21.9 million); and

•	taxation and non-renewable resource revenue received from related parties during 2010-11 of approximately $105.2 million (2009-10 - $92.9 million). In addition, Saskatchewan Provincial Sales Tax and Fuel Tax are received from related parties on all taxable purchases.

Amounts due to or from related parties are described separately in these financial statements.

Government of Saskatchewan – 2010-11 Public Accounts 59

General Revenue Fund

Notes to the Financial Statements

8. Trust Funds

The General Revenue Fund has no equity in trust fund assets. Trust fund assets held and administered but not owned by the General Revenue Fund are as follows:

(thousands of dollars)	2011		2010


Pension plans		7,788,957		7,367,998
Public Guardian and Trustee of Saskatchewan		158,830		152,540
Other		65,468		51,707
Total Trust Fund Assets1		8,013,255		7,572,245

1	Amounts are based on the latest financial statements of the funds closest to March 31, 2011, where available.

9. Debt Retirement Fund

This fund was established pursuant to The Growth and Financial Security Act and is an accounting of the surpluses of the General Revenue Fund commencing April 1, 2008.

(thousands of dollars)	Budget		Actual

Debt Retirement Fund, beginning of year		2,813,363		2,813,363
Surplus for the year		20,000		47,669
Debt Retirement Fund, End of Year		2,833,363		2,861,032

10. Comparative Figures

Certain 2010 comparative figures have been reclassified to conform with the current year’s presentation. With regard to expenses, the figures are reported on the same basis as the Estimates for the prior year.

60 Government of Saskatchewan – 2010-11 Public Accounts

General Revenue Fund

Accounts Receivable									Schedule 1
As at March 31, 2011
(thousands of dollars)

						2011			2010

Taxation							198,145			186,825
Non-renewable resources							210,545			223,969
Transfers from government entities							124,855			139,336
Other own-source revenue							117,124			109,872
Transfers from the federal government							214,454			182,126
Other							53,626			73,548
							918,749			915,676
Provision for loss							(60,883	)		(60,559	)
Total Accounts Receivable1							857,866			855,117
1 Accounts receivable include $149.3 million due from related parties (2010 - $176.6 million).
Loans to Crown Corporations									Schedule 2
As at March 31, 2011
(thousands of dollars)

							2011			2010
Promissory Notes
Municipal Financing Corporation of Saskatchewan							6,249			6,356
Saskatchewan Opportunities Corporation							-			11,099
Saskatchewan Power Corporation							-			300,000
Saskatchewan Telecommunications Holding Corporation							-			29,500
Saskatchewan Water Corporation							15,112			23,675
SaskEnergy Incorporated							210,000			85,000
Total Promissory Notes							231,361			455,630
	Principal		Sinking
	Outstanding		Fund Equity
			(schedule 7)
Long-term Loans
Information Services Corporation of Saskatchewan		13,547		-			13,547			13,547
Saskatchewan Housing Corporation		52,004		(22,242	)		29,762			31,649
Saskatchewan Opportunities Corporation		36,684		(514	)		36,170			23,437
Saskatchewan Power Corporation		100,000		(2,177	)		97,823			98,953
Saskatchewan Water Corporation		39,800		(5,761	)		34,039			27,298
SaskEnergy Incorporated		170,000		(3,658	)		166,342			168,237
Total Long-term Loans		412,035		(34,352	)		377,683			363,121
Total Loans to Crown Corporations1							609,044			818,751

1	Loans to Crown corporations are presented net of government business enterprise specific debt of $3,373.8 million (2010 - $3,033.4 million) (schedule 6).

Government of Saskatchewan – 2010-11 Public Accounts 61

General Revenue Fund

Other Loans								Schedule 3
As at March 31, 2011
(thousands of dollars)

	2011				2010
Advanced Education, Employment and Immigration
Saskatchewan Student Aid Fund				79,004					80,004

Agriculture
Agricultural Credit Corporation of Saskatchewan				-					6,150
Short-term hog loans		8,722				15,017
Provision for loss		(6,500	)	2,222		(11,924	)		3,093

Enterprise and Innovation
Economic development loans		8,521				9,525
Provision for loss		(2,278	)	6,243		(2,626	)		6,899

First Nations and Métis Relations
Economic development loans		2,540				2,817
Provision for loss		(1,938	)	602		(1,952	)		865

Other				3,094					3,157
Total Other Loans				91,165					100,168

62 Government of Saskatchewan – 2010-11 Public Accounts

General Revenue Fund

Accounts Payable and Accrued Liabilities			Schedule 4
As at March 31, 2011
(thousands of dollars)

	2011		2010

Salaries and benefits		80,356		84,730
Transfers
Capital		252,314		326,814
Operating		391,253		317,021
Goods and services		107,624		82,394
Accrued interest		107,236		111,631
Equalization and Canada Health and Social Transfer repayable to the federal
government		251,191		275,000
Transfers to the federal government		119,083		149,019
Tangible capital assets		81,205		84,415
Other		123,239		465,684
Total Accounts Payable and Accrued Liabilities1		1,513,501		1,896,708
1 Includes $399.6 million payable to related parties (2010 - $707.1 million) and $376.2 million payable to the federal government (2010 - $426.1 million).

Deposits Held			Schedule 5
As at March 31, 2011
(thousands of dollars)

		2011		2010
Deposits held on behalf of government entities and others
Cattle Marketing Deductions Fund		-		5,455
Crop Reinsurance Fund of Saskatchewan		56,983		38,308
eHealth Saskatchewan		28,650		29,868
Enterprise Saskatchewan		21,748		24,639
Extended Health Care Plans		16,999		15,255
Innovation Saskatchewan		9,086		-
Liquor and Gaming Authority		44,363		44,094
New Crops Insurance Program		-		6,537
Oil and Gas Orphan Fund		6,809		5,461
Public Employees' Dental Plan		31,107		29,397
Public Employees' Pension Plan		6,327		7,392
Queen's Bench Court Accounts		10,060		8,931
Saskatchewan Agricultural Stabilization Fund		14,431		18,059
Saskatchewan Crop Insurance Corporation		40,705		54,826
Saskatchewan Grain Car Corporation		5,001		3,995
Saskatchewan Financial Services Commission Fund		12,922		8,729
Saskatchewan Student Aid Fund		14,073		20,655
School Division Tax Loss Compensation Fund		7,086		7,190
Transportation Partnerships Fund		8,771		6,305
Victims' Fund		7,022		5,611
Other		36,736		37,017
Conditional receipts		24,793		18,398
Total Deposits Held		403,672		396,122

Government of Saskatchewan – 2010-11 Public Accounts 63

General Revenue Fund

Public Debt											Schedule 6
As at March 31, 2011
(thousands of dollars)

	2011						2010
			Government						Government
			Business						Business
			Enterprise						Enterprise
	General		Specific		Public		General		Specific		Public
	Debt1		Debt1		Debt		Debt1		Debt1		Debt

Government		4,135,226		-		4,135,226		4,140,482		-		4,140,482

Crown Corporation
Information Services Corporation of
Saskatchewan		13,547		-		13,547		13,547		-		13,547
Municipal Financing Corporation of
Saskatchewan		6,249		97,330		103,579		6,356		90,154		96,510
Saskatchewan Gaming Corporation		-		6,000		6,000		-		6,000		6,000
Saskatchewan Housing Corporation		29,762		-		29,762		31,649		-		31,649
Saskatchewan Opportunities Corporation		36,170		-		36,170		34,536		-		34,536
Saskatchewan Power Corporation		97,823		2,415,601		2,513,424		398,953		2,117,440		2,516,393
Saskatchewan Telecommunications
Holding Corporation		-		369,928		369,928		29,500		255,616		285,116
Saskatchewan Water Corporation		49,151		-		49,151		50,973		-		50,973
SaskEnergy Incorporated		376,342		484,933		861,275		253,237		564,207		817,444
Total Crown Corporation ²		609,044		3,373,792		3,982,836		818,751		3,033,417		3,852,168
Public Debt 3 4		4,744,270		3,373,792		8,118,062		4,959,233		3,033,417		7,992,650

1	General debt and government business enterprise specific debt are net of sinking funds.

2	On the Statement of Financial Position, public debt is presented net of loans to Crown corporations for government business enterprise specific debt of $3,373.8 million (2010 - $3,033.4 million).

3	Public debt repayable in U.S. dollars of 38.3 million (2010 - 53.8 million) has been converted to $37.2 million Canadian (2010 - $54.6 million) at the exchange rate in effect at March 31, 2011 of 0.9718 (2010 - 1.0156).

Public debt is comprised of gross debt net of sinking funds as follows:

	2011
	Gross		Sinking			Public
	Debta		Funds			Debt
			(schedule 7)

Government		6,111,642		(1,976,416	)		4,135,226
Crown Corporation
Information Services Corporation of Saskatchewan		13,547		-			13,547
Municipal Financing Corporation of Saskatchewan		105,153		(1,574	)		103,579
Saskatchewan Gaming Corporation		6,000		-			6,000
Saskatchewan Housing Corporation		52,004		(22,242	)		29,762
Saskatchewan Opportunities Corporation		36,684		(514	)		36,170
Saskatchewan Power Corporation		2,812,158		(298,734	)		2,513,424
Saskatchewan Telecommunications Holding Corporation		436,600		(66,672	)		369,928
Saskatchewan Water Corporation		54,912		(5,761	)		49,151
SaskEnergy Incorporated		921,183		(59,908	)		861,275
Total Crown Corporation		4,438,241		(455,405	)		3,982,836
Public Debt		10,549,883		(2,431,821	)		8,118,062

The average effective interest rate on gross debt during 2010-11 was 6.3 per cent (2009-10 - 6.6 per cent), and includes the impact of foreign exchange and the amortization of any premiums and discounts associated with the debentures. The average term to maturity of gross debt is 11.6 years (2010 - 11.5 years).

64 Government of Saskatchewan – 2010-11 Public Accounts

General Revenue Fund

Public Debt (continued)				Schedule 6

4 Debt principal payment requirements in each of the next five years and thereafter are as follows:
	2011			2010

Year of Maturity

Short-term promissory notes		586,293			650,000
2010-11		-			649,074
2011-12		259,014			260,706
2012-13		1,159,159			1,161,548
2013-14		837,664			840,109
2014-15		897,584			898,882
2015-16		491,870			-
6-10 years		1,735,518			1,246,072
Thereafter		4,582,781			4,983,634
Gross debt a		10,549,883			10,690,025
Sinking funds		(2,431,821	)		(2,697,375	)
Public Debt		8,118,062			7,992,650

a	Gross debt includes debentures of $104.5 million (2010 - $104.5 million) that provide the holder with a choice of dates on which the debt matures. The year of maturity reflects the earliest possible date of maturity rather than maximum term to maturity.

Gross debt includes Canada Pension Plan debentures of $745.1 million (2010 - $745.1 million). These debentures are callable in whole or in part before maturity at the option of the Minister of Finance of Saskatchewan.

Government of Saskatchewan – 2010-11 Public Accounts 65

General Revenue Fund

Sinking Funds													Schedule 7
As at March 31, 2011
(thousands of dollars)

	2010		2011
	Sinking									Currency			Sinking
	Funds		Contributions1		Earnings2		Redemptions3			Adjustment			Funds

Government		2,286,526		54,609		148,794		(502,972	)		(10,541	)		1,976,416

Crown Corporation
Municipal Financing Corporation of Saskatchewan		1,150		332		92		-			-			1,574
Saskatchewan Housing Corporation		20,355		520		1,367		-			-			22,242
Saskatchewan Opportunities Corporation		247		237		30		-			-			514
Saskatchewan Power Corporation		255,872		24,722		18,140		-			-			298,734
Saskatchewan Telecommunications Holding
Corporation		70,984		2,366		4,582		(11,260	)		-			66,672
Saskatchewan Water Corporation		3,502		1,979		280		-			-			5,761
SaskEnergy Incorporated		58,739		7,112		4,066		(10,009	)		-			59,908
Total Crown Corporation		410,849		37,268		28,557		(21,269	)		-			455,405
Total Sinking Funds4		2,697,375		91,877		177,351		(524,241	)		(10,541	)		2,431,821

Annual contributions, established by Order in Council, are set at not less than one per cent of debentures outstanding. The aggregate amount of contributions estimated to be required in each of the next five years and thereafter to meet sinking fund requirements by debt classification are as follows:

	2012		2013		2014		2015		2016		Thereafter		Total
Government general debta		46,717		45,672		45,672		39,286		29,975		306,491		513,813
Crown corporation general debt		3,935		3,935		3,935		3,435		3,435		57,262		75,937
Government business enterprise
specific debt		35,834		35,334		35,334		34,312		33,812		480,220		654,846
Total Sinking Fund Contributions		86,486		84,941		84,941		77,033		67,222		843,973		1,244,596

	a	Each year until 2015 includes contributions of 1.0 million U.S. dollars.
2	Sinking fund earnings include gains on investment sales of $71.6 million (2010 - $67.9 million).
3	The redemption value is based on the market value of the sinking fund units at the date of redemption.
4	The market value of total sinking funds is $2,415.6 million (2010 - $2,701.8 million).

Total sinking funds by debt classification are as follows:

	2010		2011
	Sinking									Currency			Sinking
	Funds		Contributions		Earnings		Redemptions			Adjustment			Funds

Government general debt		2,286,526		54,609		148,794		(502,972	)		(10,541	)		1,976,416
Crown corporation general debt		26,914		5,436		2,002		-			-			34,352
Total sinking funds of general debt		2,313,440		60,045		150,796		(502,972	)		(10,541	)		2,010,768
Government business enterprise specific debt		383,935		31,832		26,555		(21,269	)		-			421,053
Total Sinking Funds		2,697,375		91,877		177,351		(524,241	)		(10,541	)		2,431,821
Sinking fund assets have been invested as follows:
											2011			2010
Long-term investments in securities of:
Government of other provinces (coupon interest range 0.0% to 9.6%; maturing in 2.9 to 31.2 years)											1,257,328			1,165,580
Government of Saskatchewan (coupon interest range 0.0% to 10.3%; maturing in 2.2 to 29.2 years)											382,781			469,604
Government of Canada (coupon interest range 3.0% to 5.0%; maturing in 4.0 to 30.2 years)											128,655			464,899
Corporations (coupon interest 5.0%; maturing in 2.6 years)											10,499			10,680
Government of the United States (coupon interest range 3.9% to 4.5%; maturing in 27.1 to 29.4 years)											6,954			24,648
Cash, short-term investments and accrued interest a											645,604			561,964
Total Sinking Fundsb											2,431,821			2,697,375

a	Cash, short-term investments and accrued interest are disclosed net of $0.5 million (2010 - $0.6 million) in liabilities.

b	Included in total sinking funds are U.S. dollar cash, investments and accrued interest converted to $230.1 million Canadian (2010 - $224.7 million) at the exchange rate in effect at March 31, 2011 of 0.9718 (2010 - 1.0156).

66 Government of Saskatchewan – 2010-11 Public Accounts

General Revenue Fund

Guaranteed Debt			Schedule 8
As at March 31, 2011
(thousands of dollars)

	2011		2010
Crown Corporation
The Crown Corporations Act, 1993
Federal immigrant investor loans		18,529		-
The Power Corporation Act
Saskatchewan Power savings bonds
Series I - series VIl (matured)		18		18
Total Crown Corporation		18,547		18
Other
The Farm Financial Stability Act
Breeder associations loan guarantees		8,830		9,095
Feeder associations loan guarantees		5,963		5,778
Feedlot construction loan guarantees		1,996		2,107
Individual cattle feeder loan guarantees		61		23
The Student Assistance and Student Aid Fund Act		31		37
Total Other		16,881		17,040
Total Guaranteed Debt1		35,428		17,058

1	In addition to the amount shown, there is a contingent liability for interest accrued on certain of these items.

Total guaranteed debt is net of a loss provision of $0.1 million (2010 - $0.3 million).

Breeder and Feeder Associations

The Minister of Finance provides guarantees to lenders who make loans to production associations. The Minister of Finance guarantees the repayment of 25 per cent of the outstanding loan balance at the time of a first default on any advance, plus accrued interest as of the time that payment is to be made on the guarantee. Guarantees for each cattle association are limited to $6 million under the breeder option. Guarantees for each bison and sheep association are limited to $6 million and $4 million respectively, under both the breeder and feeder options.

Government of Saskatchewan – 2010-11 Public Accounts 67

General Revenue Fund

Tangible Capital Assets																			Schedule 9
As at March 31, 2011
(thousands of dollars)

	2011																		2010
	Land,			Machinery			Trans-			Office &
	Buildings &			&			portation			Information			Infra-
	Improvements			Equipment			Equipment			Technology			structure			Total			Total
	15 years-
Estimated useful life	Indefinite			10-20 years			10-40 years			5-10 years			15-40 years

Opening Net Book Value of
Tangible Capital Assets1		775,489			105,143			186,076			35,224			1,873,479			2,975,411			2,772,877
Opening cost		1,171,843			171,334			273,450			104,078			3,586,984			5,307,689			4,985,305
Acquisitions		39,726			8,327			10,247			25,073			306,669			390,042			388,541
Transfers2		(178,014	)		(19,267	)		-			(2,426	)		16,464			(183,243	)		1,396
Write-downs		(210	)		-			-			(61	)		-			(271	)		(180	)
Disposals		(37,594	)		(4,943	)		(6,446	)		(817	)		(19,978	)		(69,778	)		(67,373	)
Closing Cost3		995,751			155,451			277,251			125,847			3,890,139			5,444,439			5,307,689
Opening accumulated amortization		396,354			66,191			87,374			68,854			1,713,505			2,332,278			2,212,428
Annual amortization		32,785			8,226			17,249			8,838			112,424			179,522			160,175
Transfers2		(54,361	)		-			-			(2,426	)		1,281			(55,506	)		-
Disposals		(29,307	)		(3,689	)		(3,650	)		(774	)		(19,582	)		(57,002	)		(40,325	)
Closing Accumulated Amortization		345,471			70,728			100,973			74,492			1,807,628			2,399,292			2,332,278
Closing Net Book Value of
Tangible Capital Assets1		650,280			84,723			176,278			51,355			2,082,511			3,045,147			2,975,411

1	Net book value of tangible capital assets does not include the following:
	•	works of art and historical treasures, such as the Legislative Building;
	•	items inherited by right of the Crown, such as Crown lands, forests, water and mineral resources, which are not recognized in these financial statements; and
	•	intangible assets.

During 2010-11, the General Revenue Fund transferred capital assets with a cost of $181.8 million and accumulated amortization of $54.1 million to the Crown Investments Corporation of Saskatchewan in exchange for an equity investment in Crown Investments Corporation of Saskatchewan of $127.7 million.

3	Closing cost includes work-in-progress of $111.8 million (2010 - $151.8 million).

68 Government of Saskatchewan – 2010-11 Public Accounts

General Revenue Fund

Revenue					Schedule 10
For the Year Ended March 31, 2011
(thousands of dollars)

	2011				2010
	Budget		Actual		Actual
Taxation
Corporation income		762,500		1,155,273		881,424
Fuel		452,700		463,147		441,533
Individual income		1,964,700		1,795,788		1,890,848
Provincial sales		1,186,300		1,186,992		1,084,001
Tobacco		235,100		237,507		196,868
Other		257,900		292,935		237,599
Total Taxation		4,859,200		5,131,642		4,732,273
Non-renewable Resources
Crown land sales		202,800		466,993		151,455
Natural gas		42,200		29,741		40,078
Oil		1,098,300		1,274,053		1,294,670
Potash		221,000		262,540		(183,887	)
Resource surcharge		398,700		360,848		475,632
Other		145,000		133,624		132,676
Total Non-renewable Resources		2,108,000		2,527,799		1,910,624
Transfers from Government Entities
Crown Investments Corporation of Saskatchewan		266,000		266,000		185,000
- Special dividend		10,000		213,500		570,000
Liquor and Gaming Authority		445,600		437,063		429,924
Other enterprises and funds		46,900		48,119		64,172
Total Transfers from Government Entities		768,500		964,682		1,249,096
Other Own-source Revenue
Fines, forfeits, and penalties		11,800		13,170		13,219
Interest, premiums, discounts, and exchange		134,300		209,704		237,372
Motor vehicle fees		152,400		161,093		158,303
Other licences and permits		27,100		29,425		34,587
Sales, services, and service fees		108,300		132,073		110,555
Transfers from other governments		15,600		15,791		18,421
Commercial operations (schedule 11)		-		91,874		87,771
Other1		65,000		183,177		110,204
Total Other Own-source Revenue		514,500		836,307		770,432
Total Own-source Revenue		8,250,200		9,460,430		8,662,425
Transfers from the Federal Government
Canada Health Transfer		811,800		795,422		819,262
Canada Social Transfer		342,400		342,626		334,976
Other		545,500		462,200		449,795
Total Transfers from the Federal Government		1,699,700		1,600,248		1,604,033
Total Revenue		9,949,900		11,060,678		10,266,458

1	Includes reversals and refunds of prior year expenses of $151.8 million (2010 - $62.0 million).

Government of Saskatchewan – 2010-11 Public Accounts 69

General Revenue Fund

Commercial Operations						Schedule 11
For the Year Ended March 31, 2011
(thousands of dollars)

	2011					2010
	Budget		Actual			Actual
Commercial Operations Revenue1
Recovery from external sources
Government Services		72,832		83,789			82,914
Highways and Infrastructure		4,000		6,392			3,558
Information Technology Office		1,627		1,940			1,574
Recovery of overhead costs2
Highways and Infrastructure		-		(247	)		(275	)
Commercial Operations Revenue (schedule 10)		78,459		91,874			87,771
Commercial Operations Expense
Government Services		72,832		83,868			82,030
Highways and Infrastructure		4,000		5,925			3,281
Information Technology Office		1,627		1,931			1,574
Commercial Operations Expense		78,459		91,724			86,885
Net Results
Government Services		-		(79	)		884
Highways and Infrastructure		-		220			2
Information Technology Office		-		9			-
Net Results		-		150			886

1	With the approval of the Lieutenant Governor in Council, revenues from commercial-type activities may be used to pay for the related costs without requiring an appropriation.

2	Where a portion of the revenue collected relates to the recovery of overhead costs (e.g. employee benefit cost) paid for by another ministry, the revenue is included in sales, services and service fees.

Expense by Object		Schedule 12
For the Year Ended March 31, 2011
(thousands of dollars)

	2011	2010

Salaries and benefits	1,030,725	1,041,285
Transfers
Capital (schedule 16)	784,177	538,950
Operating	7,903,627	7,258,021
Goods and services	589,463	597,648
Debt servicing (schedule 14)	424,334	479,962
Amortization of tangible capital assets (schedule 9)	179,522	160,175
Other	53,492	22,712
Total Expense	10,965,340	10,098,753

70 Government of Saskatchewan – 2010-11 Public Accounts

General Revenue Fund

Expense by Theme				Schedule 13
For the Year Ended March 31, 2011
(thousands of dollars)

	2011			2010

Agriculture		482,306			373,246
Community development		449,351			527,425
Debt servicing (schedule 14)		424,334			479,962
Economic development		233,146			190,880
Education		2,196,536			2,095,131
Environment and natural resources		224,810			180,453
Health		4,547,793			3,934,231
Protection of persons and property		480,312			430,356
Social services and assistance		911,095			859,565
Transportation		476,158			466,935
Other		539,499			560,569
Total Expense		10,965,340			10,098,753
Debt Servicing				Schedule 14
For the Year Ended March 31, 2011
(thousands of dollars)
						��
		2011			2010

Total interest costs		645,622			698,859
Interest reimbursed for government business enterprise specific debt1		(225,651	)		(223,675	)
Net foreign exchange gain		(213	)		(511	)
Other costs		4,576			5,289
Total Debt Servicing		424,334			479,962

1	Interest reimbursed for debt issued by the General Revenue Fund specifically on behalf of government business enterprises.

Government of Saskatchewan – 2010-11 Public Accounts 71

General Revenue Fund

Supplemental Cash Flow Information				Schedule 15
For the Year Ended March 31, 2011
(thousands of dollars)

	2011			2010
Non-cash Items Included in Surplus
Amortization of tangible capital assets (schedule 9)		179,522			160,175
Net gain on disposal of tangible capital assets		(7,138	)		(13,284	)
Net gain on transfer of tangible capital assets		-			(1,396	)
Write-downs of tangible capital assets (schedule 9)		271			180
Net (gain) loss on loans and investments		(176	)		3,369
Amortization of foreign exchange gain (schedule 14)		(213	)		(511	)
Earnings retained in sinking funds		(148,794	)		(158,655	)
Total Non-cash Items Included in Surplus		23,472			(10,122	)
Net Change in Non-cash Operating Activities
(Increase) decrease in accounts receivable		(2,749	)		60,272
Decrease in deferred charges		2,647			4,391
(Decrease) increase in accounts payable and accrued liabilities		(383,207	)		175,192
Increase (decrease) in unearned revenue		15,681			(812	)
Increase in prepaid expenses		(4,431	)		(102	)
Increase in inventories held for consumption		(11,241	)		(12,066	)
Net Change in Non-cash Operating Activities		(383,300	)		226,875
Other Supplemental Information
Cash interest paid during the year		426,082			495,587
Cash interest received during the year		134,105			159,001

	2011				2010
Investing Activities	Receipts		Disbursements		Receipts		Disbursements
Loans
Municipal Financing Corporation of Saskatchewan		107		-		-		5,294
Saskatchewan Crop Insurance Corporation		-		-		50,000		-
Saskatchewan Opportunities Corporation		11,099		13,000		2,760		-
Saskatchewan Power Corporation		300,000		-		-		260,000
Saskatchewan Telecommunications Holding Corporation		29,500		-		-		600
Saskatchewan Water Corporation		8,563		9,000		-		10,892
SaskEnergy Incorporated		-		125,000		-		32,500
Other		59,498		50,319		62,217		43,300
Total Loan Receipts and Disbursements		408,767		197,319		114,977		352,586
Sinking Funds (schedule 7)
Contributions		5,436		60,045		4,644		64,558
Redemptions		502,972		-		892,655		48,993
Total Sinking Fund Receipts and Disbursements		508,408		60,045		897,299		113,551
Equity Investment in Crown Investments
Corporation of Saskatchewan		120,000		-		-		-
Total Receipts and Disbursements		1,037,175		257,364		1,012,276		466,137
Net Receipts		779,811				546,139

72 Government of Saskatchewan – 2010-11 Public Accounts

General Revenue Fund

Capital Investment							Schedule 16
For the Year Ended March 31, 2011
(thousands of dollars)

	2011						2010
	Capital				Total		Total
	Asset		Capital		Capital		Capital
	Acquisitions		Transfers		Investment		Investment
	(schedule 9)		(schedule 12)

Ministries and Agencies
Advanced Education, Employment and Immigration		3,236		110,336		113,572		111,615
Agriculture		1,145		8,000		9,145		144
Corrections, Public Safety and Policing		11,932		-		11,932		20,808
Education		1,965		55,519		57,484		56,762
Energy and Resources		7,480		-		7,480		6,375
Environment		14,139		-		14,139		21,328
Finance		853		-		853		38
Government Services		14,340		-		14,340		23,042
Health		2,675		318,645		321,320		82,378
Highways and Infrastructure		310,743		64,085		374,828		332,594
Information Technology Office		1,574		-		1,574		650
Justice and Attorney General		6,427		-		6,427		12,870
Municipal Affairs		-		159,615		159,615		206,557
Public Service Commission		136		-		136		2,646
Social Services		8,524		56,758		65,282		30,447
Tourism, Parks, Culture and Sport		4,796		11,219		16,015		19,055
Legislative Assembly and its Officers
Chief Electoral Officer		-		-		-		23
Legislative Assembly		77		-		77		130
Ombudsman		-		-		-		29
Total Capital Investment		390,042		784,177		1,174,219		927,491

Government of Saskatchewan – 2010-11 Public Accounts 73

Summary Financial Statements

Responsibility for the Summary Financial Statements

The Government is responsible for the Summary Financial Statements. The Government maintains a system of accounting and administrative controls to ensure that accurate and reliable financial statements are prepared and to obtain reasonable assurance that transactions are authorized, assets are safeguarded, and financial records are maintained.

The Provincial Comptroller prepares these statements in accordance with generally accepted accounting principles for the public sector, using the Government's best estimates and judgement when appropriate. He uses information from the accounts of the General Revenue Fund, Crown corporations and other government organizations to prepare these statements.

The Provincial Auditor expresses an independent opinion on these statements. His report, which appears on the following page, provides the scope of his audit and states his opinion.

Treasury Board approves the Summary Financial Statements. The statements are tabled in the Legislative Assembly as part of the Public Accounts and referred to the Standing Committee on Public Accounts for review.

On behalf of the Government of the Province of Saskatchewan.

/s/ Ken Krawetz

Ken Krawetz

Deputy Premier

Minister of Finance

/s/ Karen Layng

Karen Layng

Deputy Minister of Finance

/s/ Terry Paton

Terry Paton

Provincial Comptroller

Regina, Saskatchewan

June 2011

Government of Saskatchewan – 2010-11 Public Accounts 77

Summary Financial Statements

Independent Auditor’s Report

To the Members of the Legislative Assembly of Saskatchewan

I have audited the accompanying financial statements of the Government of Saskatchewan, which comprise the summary statement of financial position as at March 31, 2011, and the summary statements of operations, accumulated surplus, change in net debt, and cash flow for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian public sector accounting standards for Treasury Board’s approval, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

In my opinion, the financial statements present fairly, in all material respects, the financial position of the Government of Saskatchewan as at March 31, 2011, and the results of its operations, the changes in its net debt, and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.

/s/ Bonnie Lysyk

Bonnie Lysyk, MBA, CA

Provincial Auditor

Regina, Saskatchewan

June 16, 2011

Government of Saskatchewan – 2010-11 Public Accounts 79

Summary Financial Statements

Summary Statement of Financial Position
As at March 31, 2011
(thousands of dollars)

	2011			2010
Financial Assets
Cash and temporary investments (note 2)		3,111,646			3,597,304
Accounts receivable (schedule 1)		1,415,310			1,372,164
Inventories held for resale		2,046			3,370
Deferred charges		14,466			17,926
Loans receivable (schedule 2)		606,394			822,086
Investment in government business enterprises (schedule 3)		3,977,239			3,557,103
Other investments (schedule 4)		1,142,956			984,600
Total Financial Assets		10,270,057			10,354,553
Liabilities
Accounts payable and accrued liabilities (schedule 5)		2,215,925			2,253,988
Other liabilities (schedule 6)		391,816			373,829
Unearned revenue (schedule 7)		378,859			321,301
Public debt (note 3)(schedule 8)		4,885,776			5,089,292
Unamortized foreign exchange gain		5,231			3,939
Pension liabilities (note 4)(schedule 10)		6,175,795			5,871,770
Total Liabilities		14,053,402			13,914,119
Net Debt		(3,783,345	)		(3,559,566	)
Non-financial Assets
Prepaid expenses		46,783			41,423
Inventories held for consumption		152,263			142,296
Tangible capital assets (schedule 11)		6,545,414			6,211,612
Total Non-financial Assets		6,744,460			6,395,331
Accumulated Surplus		2,961,115			2,835,765
Contingencies (note 5)
Contractual obligations (note 6)
The accompanying notes and schedules are an integral part of these financial statements.

Government of Saskatchewan – 2010-11 Public Accounts 81

Summary Financial Statements

Summary Statement of Operations
For the Year Ended March 31, 2011
(thousands of dollars)

	2011			2010
Revenue
Taxation		5,737,137			5,327,423
Non-renewable resources		2,527,799			1,910,624
Other own-source revenue		1,957,897			2,001,680
Transfers from the federal government		2,104,853			2,003,047
Total Revenue (schedule 12)		12,327,686			11,242,774
Expense
Agriculture		1,134,690			627,774
Community development		532,166			576,005
Debt charges (schedule 14)		709,275			773,892
Economic development		291,552			279,196
Education		2,997,736			2,910,231
Environment and natural resources		241,247			225,195
Health		4,676,530			4,519,904
Protection of persons and property		537,419			480,166
Social services and assistance		1,079,279			1,032,358
Transportation		505,754			499,618
Other		605,243			561,279
Total Expense (schedule 13)		13,310,891			12,485,618
Deficit from government service organizations		(983,205	)		(1,242,844	)
Income from government business enterprises (schedule 3)		969,913			833,599
Deficit (schedule 15)		(13,292	)		(409,245	)
The accompanying notes and schedules are an integral part of these financial statements.

82 Government of Saskatchewan – 2010-11 Public Accounts

Summary Financial Statements

Summary Statement of Accumulated Surplus
For the Year Ended March 31, 2011
(thousands of dollars)

	2011					2010
	Estimated			Actual		Actual

Accumulated surplus, beginning of year		2,835,765		2,835,765			1,396,880
Adjustment for Boards of Education (note 10)		-		-			1,576,916
Deficit		(622,676	)	(13,292	)		(409,245	)
Other comprehensive income (schedule 3)		-		138,642			271,214
Accumulated Surplus, End of Year		2,213,089		2,961,115			2,835,765

Summary Statement of Change in Net Debt
For the Year Ended March 31, 2011
(thousands of dollars)

	2011						2010
	Estimated			Actual			Actual

Deficit		(622,676	)		(13,292	)		(409,245	)
Tangible Capital Assets
Acquisitions (schedule 11)		(668,703	)		(814,084	)		(772,771	)
Amortization (schedule 11)		434,913			450,715			416,234
Proceeds on disposal		18,000			29,863			54,632
Write-downs (schedule 11)		-			5,469			4,632
Net gain on disposal		-			(5,765	)		(20,574	)
Net Acquisition of Tangible Capital Assets		(215,790	)		(333,802	)		(317,847	)
Other Non-financial Assets
Net acquisition of prepaid expenses		-			(5,360	)		(2,504	)
Net acquisition of inventories held for consumption		-			(9,967	)		(29,392	)
Net Acquisition of Other Non-financial Assets		-			(15,327	)		(31,896	)
Increase in net debt		(838,466	)		(362,421	)		(758,988	)
Net debt, beginning of year		(3,559,566	)		(3,559,566	)		(3,523,947	)
Adjustment for Boards of Education (note 10)		-			-			404,040
Adjustment to tangible capital assets (schedule 11)		-			-			48,115
Other comprehensive income (schedule 3)		-			138,642			271,214
Net Debt, End of Year		(4,398,032	)		(3,783,345	)		(3,559,566	)
The accompanying notes and schedules are an integral part of these financial statements.

Government of Saskatchewan – 2010-11 Public Accounts 83

Summary Financial Statements

Summary Statement of Cash Flow
For the Year Ended March 31, 2011
(thousands of dollars)

	2011			2010
Operating Activities
Deficit		(13,292	)		(409,245	)
Non-cash items included in the deficit
Income from government business enterprises (schedule 3)		(969,913	)		(833,599	)
Other non-cash items included in the deficit (schedule 16)		300,476			229,382
Net change in non-cash operating activities (schedule16)		269,831			567,782
Dividends received from government business enterprises (schedule 3)		688,419			638,730
Dividends received from other investments		2,732			926
Cash Provided by Operating Activities		278,253			193,976
Capital Activities
Acquisition of tangible capital assets (schedule 11)		(814,084	)		(772,771	)
Adjustment to tangible capital assets (schedule 11)		-			48,115
Proceeds on disposal of tangible capital assets		29,863			54,632
Cash Used for Capital Activities		(784,221	)		(670,024	)
Investing Activities
Net decrease (increase) in loans receivable		217,142			(300,580	)
Decrease in equity advances to government business enterprises		-			10,000
Acquisition of other investments		(970,998	)		(1,240,734	)
Disposition of other investments		807,394			1,202,100
Sinking fund contributions for general debt (schedule 9)		(60,045	)		(64,558	)
Sinking fund redemptions for general debt (schedule 9)		502,972			892,655
Cash Provided by Investing Activities		496,465			498,883
Financing Activities
Proceeds from public debt		221,537			530,764
Repayment of public debt		(715,679	)		(990,912	)
Net increase in other liabilities		17,987			9,278
Cash Used for Financing Activities		(476,155	)		(450,870	)
Decrease in cash and temporary investments		(485,658	)		(428,035	)
Cash and temporary investments, beginning of year		3,597,304			3,831,588
Adjustment for Boards of Education (note 10)		-			193,751
Cash and Temporary Investments, End of Year		3,111,646			3,597,304
The accompanying notes and schedules are an integral part of these financial statements.

84 Government of Saskatchewan – 2010-11 Public Accounts

Summary Financial Statements

Notes to the Summary Financial Statements

As at March 31, 2011

1. Significant Accounting Policies

Basis of accounting

These Summary financial statements are prepared in accordance with Canadian public sector accounting standards.

Government reporting entity

The government reporting entity consists of organizations controlled by the Government. These government entities are segregated into two classifications. Entities that are self-sufficient and have the financial and operating authority to sell goods and services to individuals and organizations outside the government reporting entity as their principal activity are classified as government business enterprises. All other government entities are government service organizations.

A listing of the organizations included in the government reporting entity is provided in schedule 18. Unless otherwise noted, the financial activities of all subsidiaries of these organizations have also been included.

Trust funds are administered but not controlled by the Government and, therefore, are excluded from the government reporting entity.

Government partnerships

The Government has entered into various partnerships where there is a contractual arrangement between the Government and one or more partners outside the government reporting entity and where these partners share, on an equitable basis, the significant risks and benefits associated with operating the partnership.

Method of consolidation

Government service organizations are consolidated after adjustment to a basis consistent with the accounting policies described in this note. Significant inter-organization balances and transactions are eliminated. Government service organizations in which a non-controlling interest exists are proportionately consolidated.

Government business enterprises are accounted for by the modified equity method. Using this method, the Government’s investment in government business enterprises, which is initially recorded at cost, is adjusted annually to include the Government’s proportionate share of net earnings or losses and certain other net equity changes of the enterprise without adjustment to conform with the accounting policies described in this note. With the exception of dividends declared by March 31, inter-organization balances and transactions are not eliminated.

Government partnerships are proportionately consolidated after adjustment to a basis consistent with the accounting policies described in this note and are disclosed in note 7. Significant inter-organization balances and transactions are eliminated.

Financial results of government organizations with fiscal year-ends other than March 31 are adjusted for transactions having a significant impact on these financial statements.

Specific accounting policies

Financial assets

Financial assets are assets that could be used to discharge existing liabilities or finance future operations and are not for consumption in the normal course of operations.

Temporary investments are recorded at the lower of cost or market.

Inventories held for resale are valued at the lower of cost and net realizable value.

Deferred charges include issue costs and net discounts or premiums incurred on the issue of debt and related derivative instruments. They are recorded at cost and amortized on a straight-line basis over the remaining life of the debt issue.

Loans receivable are initially recorded at cost. Where there has been a loss in value that is other than a temporary decline, the loan is written down to recognize the loss. Interest is recognized on the accrual basis; when collection is uncertain, it is recorded on the cash basis.

Government of Saskatchewan – 2010-11 Public Accounts 85

Summary Financial Statements

Notes to the Summary Financial Statements

1. Significant Accounting Policies (continued)

Other investments are accounted for by various methods as described below and are written down to their market value when there is evidence of a permanent decline in value.

Equities are investments in shares of private or public companies. Investments that are subject to significant influence but in which the Government has less than a controlling interest are accounted for by the modified equity method. Using this method, the Government’s investment, which is initially recorded at cost, is adjusted annually for the Government’s share of the investees’ net earnings or losses and is reduced by dividends and partnership distributions received from these investments. Investments that are not subject to significant influence are recorded at cost; dividends from these shares are recorded as income when receivable.

Pooled investment funds are recorded at market value.

All other investments are recorded at amortized cost.

Liabilities

Liabilities are present obligations to individuals and organizations outside the government reporting entity as a result of transactions and events occurring prior to year-end, which will be satisfied in the future through the transfer or use of assets or another form of economic settlement. They consist of obligations to provide retirement benefits to employees, to repay borrowings, to provide authorized transfers where any eligibility criteria have been met, to pay for goods and services acquired prior to year-end and to deliver goods or services in the future where payment has been received. Liabilities include contingencies when it is likely that a liability exists and the amount can be reasonably estimated.

Unearned revenue includes externally restricted funding from the federal government and other organizations and individuals.

Public debt is recorded at par, and is comprised of:

•	general debt, which is debt issued by government service organizations and includes issued amounts subsequently transferred to government business enterprises; and

•	government business enterprise specific debt, which is debt issued by, or specifically on behalf of, government business enterprises.

On the Statement of Financial Position public debt includes only general debt. Government business enterprise specific debt is listed separately on schedule 8.

Certain debenture issues require contributions to a sinking fund. These obligations are recorded at principal less sinking fund balances where applicable. Premiums and discounts on long-term investments within these sinking funds are amortized on a constant yield basis.

Debt issues and sinking fund investments held in foreign currencies are converted to the Canadian dollar equivalent at the exchange rate in effect at March 31.

Premiums, discounts and issue costs are recorded as deferred charges.

Unamortized foreign exchange gain or loss includes unrealized foreign exchange gains and losses resulting from the conversion of debentures due and sinking funds held in a foreign currency to the Canadian dollar equivalent at the exchange rate in effect at March 31. Unrealized foreign exchange gains and losses are amortized on a straight-line basis over the remaining life of the debt issue. Realized foreign exchange gains and losses are included in the surplus or deficit.

Pension liabilities are calculated using the projected benefit method prorated on services, except as otherwise disclosed in note 4. Pension fund assets are valued at market-related values. Changes in the pension liabilities that result from estimation adjustments due to experience gains and losses and changes in actuarial assumptions are amortized on a straight-line basis over the expected average remaining service life of the related employee group. Gains or losses resulting from plan amendments are recognized in the period of the plan amendment.

Guaranteed debt includes guarantees of the Government made through specific agreements or legislation to pay all or part of the principal or interest on a debt obligation in the event of default by the borrower. Loss provisions on guaranteed debt are recorded as a liability and an expense when it is likely that a loss will occur. The amount of the loss provision represents the Government’s best estimate of future payments net of recoveries.

86 Government of Saskatchewan – 2010-11 Public Accounts

Summary Financial Statements

Notes to the Summary Financial Statements

1. Significant Accounting Policies (continued)

Non-financial assets

Inventories held for consumption are recorded at cost and are expensed as they are consumed.

Tangible capital assets are recorded at cost and include all amounts directly attributable to the acquisition, construction, development or betterment of the asset. Tangible capital assets are generally amortized on a straight-line basis over the estimated useful life of each asset.

Revenue

Expense

Expenses are recorded on the accrual basis. Government transfers are recognized as expenses in the period during which the transfer is authorized and any eligibility criteria are met.

Measurement uncertainty

Measurement uncertainty, disclosed in aggregate for government service organizations and government business enterprises, that may be material to these financial statements exists:

•

in pension obligations of $6,094.7 million (2010 - $5,783.2 million), insurance claim obligations of $2,720.9 million (2010 - $2,563.1 million) and environmental obligations of $307.2 million (2010 - $269.4 million) because actual experience may differ significantly from actuarial or historical estimations and assumptions;

•	in corporate and individual income taxation revenue of $2,951.1 million (2010 - $2,772.3 million) because final tax assessments may differ from initial estimates on which cash payments are based;

•	in oil and natural gas non-renewable resource revenue of $1,303.8 million (2010 - $1,334.7 million) because of price and production sensitivities in the royalty revenue structures;

•	in resource surcharge non-renewable resource revenue of $360.8 million (2010 - $475.6 million) because the final valuation of resource sales may differ from initial estimates on which installments are based;

•	in potash non-renewable resource revenue of $262.5 million (2010 - negative $183.9 million) because actual operating profits may differ from initial estimates;

•	in the Canada Health Transfer and Canada Social Transfer revenue of $1,138.0 million (2010 - $1,154.2 million) because of changes in economic and demographic conditions in the Province and the country;

•	in unbilled utility revenue of $128.4 million (2010 - $137.8 million) because actual usage may differ from estimated usage; and

•	in agricultural income stability programs expense of $176.2 million (2010 - $232.2 million) because actual program uptake may differ from initial estimates which are based on farm income forecasts.

Future accounting policy changes

Government of Saskatchewan – 2010-11 Public Accounts 87

Summary Financial Statements

Notes to the Summary Financial Statements

2. Cash and Temporary Investments

Temporary investments are $1,800.1 million (2010 - $2,467.1 million) and mature in less than one year. Due to the short-term nature of these investments, market value approximates cost. Cash and temporary investments includes $76.2 million (2010 - $32.5 million) restricted as a result of agreements with external parties.

3. Risk Management of Public Debt

The Government borrows funds in both domestic and foreign capital markets by issuing Government of Saskatchewan securities. As a result, the Government is exposed to four types of risk: interest rate risk, foreign exchange rate risk, credit risk and liquidity risk.

To manage these risks, the Government maintains a preference for fixed rate Canadian dollar denominated debt. Where market conditions dictate that other forms of debt are more attractive, the Government seeks opportunities to use derivative financial instruments to reduce these risks. A derivative financial instrument is a contract, the value of which is based on the value of another asset or index.

Interest rate risk is the risk that the Government’s debt charges will increase due to changes in interest rates. This risk is managed by issuing debt securities at predominantly fixed rates of interest rather than at floating rates of interest.

Floating rate debt is defined as the sum of floating rate debentures, short-term promissory notes, fixed rate debt maturing within one year and Saskatchewan Savings Bonds. The Government seeks opportunities to effectively convert floating rate debt into fixed rate debt through the use of interest rate swaps. The Government has interest rate swaps on a notional value of debt of $77.7 million (2010 - $80.3 million). At March 31, 2011, 90.3 per cent (2010 - 85.9 per cent) of the Government’s gross debt effectively carried a rate of interest that was fixed for greater than a one-year period.

Public debt includes floating rate debt of $1,040.6 million (2010 - $1,540.7 million). A one percentage point increase in interest rates would increase the deficit by $10.4 million in 2011-12.

Foreign exchange rate risk is the risk that the Government’s debt charges will increase due to a decline in the value of the Canadian dollar relative to other currencies. This risk is managed by maintaining a preference for issuing debt that is denominated in Canadian dollars. Where debt has been issued in foreign currencies, the Government seeks opportunities to effectively convert it into Canadian dollar debt through the use of cross currency swaps and foreign currency forward exchange contracts. At March 31, 2011, 97.4 per cent (2010 - 97.5 per cent) of the Government’s gross debt is effectively denominated in Canadian dollars. A one cent change in the value of the U.S. dollar compared to the Canadian dollar from the March 31, 2011 level would have an insignificant effect on debt and debt servicing costs.

The following foreign denominated items have been hedged to Canadian dollars using cross currency swaps:

•	debentures totalling 1,225.0 million U.S. dollars (2010 - 1,225.0 million) fully hedged to $1,619.3 million Canadian (2010 - $1,619.3 million);

•	debentures totalling 300.0 million Swiss francs (2010 - 300.0 million) fully hedged to $274.7 million Canadian (2010 - $274.7 million); and

•	interest payments on debentures of 275.0 million U.S. dollars (2010 - 275.0 million) hedged to Canadian dollars at an exchange rate of 1.2325 (2010 - 1.2325).

In total, the Government has cross currency swaps on a notional value of debt of $2,507.5 million (2010 - $2,507.5 million). The effectiveness of these hedges is assessed on an ongoing basis by monitoring the credit ratings of the counterparties to the hedges.

Credit risk is the risk that a loss may occur from the failure of another party to meet its obligations under a derivative financial instrument contract. This risk is managed by dealing only with counterparties that have good credit ratings and by establishing limits on individual counterparty exposures and monitoring those exposures on a regular basis. At March 31, 2011, 100 per cent (2010 - 100 per cent) of the Government’s counterparties held a Standard and Poor’s credit rating of A or better.

Liquidity risk is the risk that the Government will not be able to meet its financial commitments over the short term. This risk is managed by distributing debt maturities over many years, maintaining sinking funds on long-term debt issues and maintaining adequate cash reserves and short-term borrowing programs as contingent sources of liquidity.

88 Government of Saskatchewan – 2010-11 Public Accounts

Summary Financial Statements

Notes to the Summary Financial Statements

4. Employee Future Benefits

Pension plans

The Government sponsors several defined benefit and defined contribution pension plans. The Government also participates in a joint defined benefit pension plan.

The accrued benefit obligation is determined using the projected benefit method prorated on services. Pension fund assets are valued at market related values based on the actual market values averaged over a four-year period. In the periods between valuations, the actuary estimates the market related value of pension fund assets using expected long-term rates of return for the individual plans.

Joint defined benefit plans are governed by a formal agreement between the joint sponsors (i.e., employer and plan members), which establishes that the joint sponsors have shared control over the plan. Funding contributions are shared mutually between the employer and plan members. The sponsors share, on an equitable basis, the significant risks of each plan. Accordingly, the Government accounts for only its portion of the plan. Plan assets and surpluses are restricted for member benefits or certain other purposes set out in the agreement. Plan benefits are determined on the same basis as defined benefit plans.

The accrued benefit obligation is determined using the projected accrued benefit actuarial cost method. Pension fund assets are valued at market related values by averaging the difference between the net investment income on a market value basis and the expected investment income determined by the actuary, over a five-year period.

Defined contribution plans provide pensions based on accumulated contributions and investment earnings. Employees contribute a percentage of salary. The Government provides contributions at specified rates for employee current service.

Pension fund assets of government sponsored defined benefit and defined contribution plans are invested in fixed income securities, equities, real estate and short-term monetary items. The investment in Government of Saskatchewan securities is insignificant for all plans.

Government service organizations

a) Defined benefit plans and joint defined benefit plan

The two main defined benefit plans are the Teachers’ Superannuation Plan (TSP) and the Public Service Superannuation Plan (PSSP). Other plans include Judges of the Provincial Court Superannuation Plan (Judges), Saskatchewan Transportation Company Employees Superannuation Plan (STC), Anti-TB League Employees Superannuation Plan (ATB), Pension Plan for the Non-Teaching Employees of the Saskatoon School Division No. 13 (PPNTE), and the Saskatchewan Pension Annuity Fund, an annuity underwriting operation. Defined benefits are also payable to members of the former Members of the Legislative Assembly Superannuation Fund (MLA).

The Government is required to match member current service contributions for all plans except the PSSP, Judges and PPNTE. Funding contributions are required for the PPNTE. Separate pension funds are maintained for all plans except the PSSP and the MLA, for which member contributions are received and pension obligations are paid directly by the Government.

The Government also participates in the Saskatchewan Healthcare Employees’ Pension Plan (SHEPP), a joint defined benefit plan for employees of the Regional Health Authorities. The Government contributes to the plan at the ratio of 1.12 to 1 of employee contributions. Any actuarially determined deficiency is the responsibility of participating employers and employees in the ratio of 1.12 to 1. The Government’s participating employer contributions for the SHEPP represents approximately 94 per cent (2010 - 93 per cent) of the total employer contributions to the plan.

Government of Saskatchewan – 2010-11 Public Accounts 89

Summary Financial Statements

Notes to the Summary Financial Statements

4. Employee Future Benefits (continued)

Information on the defined benefit plans and the joint defined benefit plan of government service organizations is as follows:

	2011												2010
	TSP		PSSP			Others			SHEPP		Total		Total


Plan status	closed		closed			closed		1	open			n/a		n/a
Member contribution rate (percentage of salary)		7.85		7.00-9.00	2		4.40-9.00	2		7.20-9.60		n/a		n/a
Number of active members		1,499		623			946			33,923		36,991		36,866
Average age of active members (years)		56.2		57.5			46.3			45.3		46.0		46.1
Number of former members entitled to deferred
pension benefits		4,583		94			144			1,494		6,315		6,411
Number of superannuates and surviving spouses		11,280		5,698			2,439			11,174		30,591		29,816
Actuarial valuation date	June 30/09		Dec. 31/08			Various			Dec. 31/09			n/a		n/a
Long-term assumptions used
Rate of compensation increase (percentage)		3.50		3.50			3.50-4.00			3.50		n/a		n/a
Expected rate of return on plan assets (percentage)		6.60		n/a			5.75-6.15			7.25		n/a		n/a
Discount rate (percentage)		4.80		4.70			4.20-6.00			7.25		n/a		n/a
Inflation rate (percentage)		2.50		2.50			2.50-3.00			2.50		n/a		n/a
Expected average remaining service life (years)		4.0		1.5			1.5-13.0			11.5		n/a		n/a
Post-retirement index (percentage of annual
increase in Consumer Price Index)		80		70			70-100		Ad hoc			n/a		n/a

1	Judges and PPNTE are open to new membership; all other plans are closed.
2	Contribution rate varies based on age upon joining the plan.

b) Defined contribution plans

The two main multi-employer defined contribution plans sponsored by the Government are the Public Employees Pension Plan (PEPP) and the Capital Pension Plan (Capital). The Government provides contributions to the plans at specified rates for employee current service. The Government also contributes to the Saskatchewan Teachers’ Retirement Plan (STRP), sponsored by the Saskatchewan Teachers’ Federation, the Municipal Employees’ Pension Plan (MEPP) and the Regina Civic Employees’ Superannuation and Benefit Plan (RCESP). The Government has fully funded its share of contributions to the defined contribution plans.

Information on the defined contribution plans of government service organizations is as follows:

	2011														2010
	Government Sponsored
	PEPP			Capital			STRP 1		MEPP 2		RCESP 3		Total		Total

Plan status	open			open			open		open		open			n/a		n/a
Member contribution rate (percentage of salary)		5.00-9.00	4		5.00-7.50	4		7.00-9.00		6.40		8.42-13.96		n/a		n/a
Government contribution rate (percentage of salary)		5.00-9.00	4		5.50-8.00	4		7.00-9.00		6.40		8.42-13.96		n/a		n/a
Government service organization participation
Number of active members		15,598			735			13,509		9,052		2,122		41,016		43,261
Member contributions (thousands of dollars)		67,302			2,666			59,156		14,763		11,592		155,479		147,083
Government contributions (thousands of dollars)		72,106			3,375			60,654		14,763		12,289		163,187		153,807

1	Teachers employed by Boards of Education after July 1, 1980 participate in the STRP, a contributory defined benefit pension plan. The Government contributes an amount which is set through provincial negotiations.

Certain employees of Boards of Education and Regional Colleges participate in the MEPP, a multi-employer defined benefit plan. All costs, including costs of any actuarially determined deficiency, are equally shared by the employees and employers. At December 31, 2010, audited financial statements for the MEPP reported an accrued benefit obligation of $1,353.3 million (2009 - $1,204.8 million) and pension fund assets at market value of $1,371.5 million (2009 - $1,255.9 million).

Certain employees of a Regional Health Authority and a Board of Education participate in the RCESP, a multi-employer defined benefit plan. All costs, including costs of any actuarially determined deficiency, are equally shared by the employees and employers. At December 31, 2010, audited financial statements for the RCESP reported an accrued benefit obligation of $1,084.7 million (2009 - $994.5 million) and pension fund assets at market value of $875.7 million (2009 - $787.3 million).

4	Contribution rate varies based on employee group.

90 Government of Saskatchewan – 2010-11 Public Accounts

Summary Financial Statements

Notes to the Summary Financial Statements

4. Employee Future Benefits (continued)

c) Pension expense

Pension expense for government service organizations is primarily allocated to education expense, health expense and other expense. Pension interest expense is included in debt charges. The total pension expense of government service organizations includes the following:

(thousands of dollars)	2011			2010


Defined benefit plans
Current period benefit cost		53,445			63,353
Plan amendment		-			(173	)
Amortization of estimation adjustments		143,047			191,525
Employee contributions		(12,899	)		(16,163	)
Cost of financing unfunded pension obligation (pension interest expense)		277,991			281,705
Pension expense, defined benefit plans		461,584			520,247
Other plans
Pension expense, joint defined benefit plan		168,671			172,434
Pension expense, defined contribution plans		163,187			153,807
Total Pension Expense		793,442			846,488

Government business enterprises

a) Defined benefit plans

There are additional employee pension plans of government business enterprises which are accounted for in the investment in government business enterprises. The two main defined benefit plans of government business enterprises are the Power Corporation Superannuation Plan (SaskPower) and the Saskatchewan Telecommunications Pension Plan (SaskTel). Other plans include the Saskatchewan Government Insurance Superannuation Plan, the Liquor Board Superannuation Plan, and the Pension Plan for the Employees of the Saskatchewan Workers’ Compensation Board.

The Government contributes the amount necessary to fund the payment of pension benefits.

Information on the defined benefit plans of government business enterprises is as follows:

	2011								2010
	SaskPower		SaskTel		Others		Total		Total
									(Restated)

Plan status	closed		closed		closed			n/a		n/a
Number of active members		286		116		50		452		577
Number of former members, superannuates and surviving spouses		1,777		2,057		441		4,275		4,252
Member contributions (thousands of dollars)		880		360		151		1,391		2,194
Government contributions (thousands of dollars)		27,337		16,450		3,368		47,155		37,142
Benefits paid (thousands of dollars)		49,841		65,849		8,346		124,036		119,330
Actuarial valuation date	Sept. 30/10		Nov. 30/09		Various			n/a		n/a
Long-term assumptions used
Rate of compensation increase (percentage)		3.50		3.00		2.50-3.50		n/a		n/a
Expected rate of return on plan assets (percentage)		6.75		6.75		4.50-6.25		n/a		n/a
Discount rate (percentage)		5.00		5.25		4.50-5.10		n/a		n/a
Inflation rate (percentage)		2.50		2.50		2.25-2.50		n/a		n/a
Post-retirement index (percentage of annual increase in
Consumer Price Index)		70		100		50-70		n/a		n/a

Government of Saskatchewan – 2010-11 Public Accounts 91

Summary Financial Statements

Notes to the Summary Financial Statements

4. Employee Future Benefits (continued)

Based on the latest actuarial valuation for SaskPower at September 30, 2010 and extrapolations for the other plans to December 31, 2010, the present value of accrued pension benefits and the market value of pension fund assets are shown in the table below:

(thousands of dollars)	2011												2010
	SaskPower			SaskTel			Others			Total			Total

Accrued benefit obligation		915,415			1,050,704			130,219			2,096,338			1,939,101
Fair value of plan assets1		732,608			945,668			83,198			1,761,474			1,654,583
Plan deficit		182,807			105,036			47,021			334,864			284,518
Unamortized amounts2		(164,628	)		(237,729	)		(13,575	)		(415,932	)		(346,038	)
Corporate contributions		-			-			-			-			(27,079	)
Pension (Assets) Liabilities		18,179			(132,693	)		33,446			(81,068	)		(88,599	)

1	At December 31, 2010, 29.9 per cent (2009 - 30.6 per cent) of pension plan assets were invested in fixed income securities and 57.0 per cent (2009 - 57.3 per cent) in equity investments.

Includes unamortized transitional assets, unamortized actuarial gains (losses) and unamortized past service costs. SaskTel’s amounts are amortized to pension expense over the average remaining life of retired members of 22 years. SaskPower and the other plans’ amounts are amortized to pension expense over periods ranging from 1 to 2 years, which is the expected average remaining service life of active plan members at the time the amounts arose.

b) Defined contribution plans

Information on the defined contribution plans of government business enterprises is as follows:

	2011						2010
	PEPP		Capital		Total		Total

Plan status	open		open			n/a		n/a
Member contribution rate (percentage of salary)1		4.00-7.00		4.00-5.50		n/a		n/a
Government contribution rate (percentage of salary)1		6.00-7.00		5.50-6.00		n/a		n/a
Government business enterprise participation
Number of active members		9,134		2,709		11,843		12,474
Government contributions (thousands of dollars)		39,693		7,642		47,335		45,740

1	Contribution rate varies based on employee group.

c) Pension expense

Pension expense and pension interest expense for government business enterprises are included in income from government business enterprises. The pension expense is $55.0 million (2010 - $31.5 million) for the defined benefit plans and $47.3 million (2010 - $45.7 million) for the defined contribution plans.

Other employee future benefits

Government service organizations

Other employee future benefits of government service organizations include long-term disability benefit plans, a group life insurance plan providing waiver of premiums during disability and other benefits. The benefit liability of $56.4 million (2010 - $59.7 million) is recorded in accounts payable and accrued liabilities, and the benefit expense of $23.6 million (2010 - $32.9 million) is recorded in education expense and health expense.

Government business enterprises

Other employee future benefits of government business enterprises include a defined benefit severance plan, a supplementary superannuation plan, two defined benefit service recognition plans, a defined benefit retiring allowance plan and a voluntary early retirement plan. The accrued benefit liability is $89.2 million (2010 - $86.7 million) and the benefit expense is $18.1 million (2010 - $17.9 million).

92 Government of Saskatchewan – 2010-11 Public Accounts

Summary Financial Statements

Notes to the Summary Financial Statements

5. Contingencies

Guaranteed debt

The Government has guaranteed the debt of others of $29.1 million (2010 - $23.4 million).

Significant guarantees include $14.8 million (2010 - $14.9 million) provided to lenders who make loans to breeder and feeder production associations under The Farm Financial Stability Act. The Government guarantees the repayment of 25 per cent of the outstanding loan balance at the time of a first default on any advance, plus accrued interest as of the time that payment is to be made on the guarantee. Guarantees for each cattle association are limited to $6 million under the breeder option. Guarantees for each bison and sheep association are limited to $6 million and $4 million respectively, under both the breeder and feeder options. These guarantees are net of a recorded loss provision of $0.1 million (2010 - $0.3 million).

Lawsuits

The Government is involved in various legal actions, the outcome of which is not determinable. Up to $431.8 million may be paid depending on the outcome of lawsuits in progress. The lawsuits in progress include aboriginal land claims, claims for damages to persons and property, disputes of taxes and various other legal actions.

Other

The Government has issued $32.0 million (2010 - $28.9 million) in letters of credit as security for outstanding insurance claims, electricity trading and natural gas purchases. An estimate of $10.9 million (2010 - $10.9 million) has been recorded as the likely cost related to these letters of credit.

6. Contractual Obligations

The Government has operating and capital lease obligations as follows:

(thousands of dollars)	Operating1		Capital 2

Future minimum lease payments
2011-12		164,285		14,552
2012-13		122,841		13,041
2013-14		103,071		8,779
2014-15		46,659		6,360
2015-16		36,813		4,888
Thereafter		42,243		16,715
		515,912		64,335
Interest and executory costs		-		(19,450	)
Total Lease Obligations		515,912		44,885

1	Total operating lease obligations include $232.6 million for government service organizations and $283.3 million for government business enterprises.

2	Total capital lease obligations include $37.4 million for government service organizations (schedule 6) and $7.5 million for government business enterprises.

The Government has significant other contractual obligations including:

•	forward purchase agreements of approximately $11,736.6 million for power over the next 26 years, $1,180.6 million for future minimum coal deliveries valued at current prices over the next 14 years and $234.9 million for natural gas over the next five years;

•	contracts for the construction and acquisition of tangible capital assets of $1,949.8 million over the next five years;

•	computer service agreements of $145.8 million over the next five years;

•	agreements to provide housing subsidies and transfers of $91.2 million over the next five years;

•	projects to expand innovation and enhance the competitive ability of the Saskatchewan economy of $64.7 million over the next five years;

•	agreements to provide loss of income subsidies to previous purveyors of gaming services of $61.3 million over the next 17 years;

Government of Saskatchewan – 2010-11 Public Accounts 93

Summary Financial Statements

Notes to the Summary Financial Statements

6. Contractual Obligations (continued)

•	an agreement to make contributions to the Power Corporation Superannuation Plan as a result of a binding court settlement of $27.1 million in the next year;

•	research and development projects for agriculture technology and opportunities in the agri-food industry of $26.9 million over the next five years;

•	beverage container collection and recycling programs of $20.6 million in 2011-12;

•	capital grant projects of $19.8 million over the next two years;

•	fire suppression aerial fleet renewal agreements of $13.9 million over the next three years;

•	treaty land entitlement agreements valued at approximately $6.9 million over the next three years, and rural municipality tax loss compensation of approximately $6.0 million as land achieves reserve status over the course of the agreements; and

•	other contractual obligations for various government service organizations of $33.9 million over the next 20 years.

7. Government Partnerships

The Government has entered into various contractual arrangements with parties outside the government reporting entity resulting in shared control of certain organizations. The Government’s holdings in government partnerships include:

•	a 60 per cent interest in Apex Investment Limited Partnership, which invests in a variety of industries in the prairie region of Canada;

•	a 50 per cent interest in Meadow Lake Pulp Limited Partnership (MLPLP), which operated a pulp mill near Meadow Lake. MLPLP is in receivership, and the Government expects to be paid any remaining cash upon the wind up of MLPLP;

•	a 45.5 per cent interest in Saskatchewan Entrepreneurial Fund Joint Venture, which assists with the development and growth of small business in the province;

•	a 33.3 per cent interest in Foragen Technologies Limited Partnership, a venture capital fund which provides seed capital to technology corporations; and

•	shared control of Prairie Diagnostic Services Inc., which provides veterinary diagnostic services to veterinary and livestock industries in the province.

The Government’s pro-rata share of its government partnerships is as follows:

(thousands of dollars)	2011		2010

Financial assets		49,656		48,959
Liabilities		6,763		6,131
Net assets		42,893		42,828
Non-financial assets		551		639
Accumulated Surplus		43,444		43,467

Revenue		7,416		12,792
Expense		5,824		5,274
Surplus		1,592		7,518
Recovery of partnership interest		423		122
Accumulated partnership earnings, beginning of year		16,171		8,531
Accumulated partnership earnings, end of year		18,186		16,171
Equity advances from government organizations		25,258		27,296
Accumulated Surplus		43,444		43,467

8. Non-controlling Interest

Government service organizations controlled by the Government may also have ownership by individuals or organizations outside of the government reporting entity. This outside ownership is a non-controlling interest. The 49.2 per cent non-controlling interest of Prairie Ventures Limited Partnership, a subsidiary of CIC Asset Management Inc., amounts to $6.7 million (2010 - $7.8 million) in accumulated surplus, which has been excluded from these financial statements.

94 Government of Saskatchewan – 2010-11 Public Accounts

Summary Financial Statements

Notes to the Summary Financial Statements

9. Trust Funds

Trust fund assets held and administered by the Government are as follows:

(thousands of dollars)	2011		2010

Pension plans		10,634,991		10,024,894
Employee benefit plans		250,623		176,973
Public Guardian and Trustee of Saskatchewan		158,830		152,540
Other		47,065		37,147
Total Trust Fund Assets1		11,091,509		10,391,554

1	Amounts are based on the latest financial statements of the funds closest to March 31, 2011, where available.

10. Adjustment for Boards of Education

During 2009-10, amendments were made to The Education Act, 1995 that changed the relationship between the Government and the Boards of Education of Saskatchewan School Divisions (Boards of Education), such that the Boards of Education meet the criteria for inclusion in the government reporting entity.

At April 1, 2009, the date of inclusion of the Boards of Education, these financial statements were adjusted as follows:

(thousands of dollars)

Financial assets
Cash and temporary investments			193,751
Other investments			4,104
Other1			510,547
Liabilities
Public debt			101,716
Other liabilities			3,790
Other1 2			198,856
Decrease in net debt			404,040
Non-financial assets
Prepaid expenses1			7,850
Inventories held for consumption1			3,592
Tangible capital assets			1,161,434
Increase in Accumulated Surplus			1,576,916

1	Represents the adjustment to non-cash operating activities of $323.1 million (schedule 16).

2	Includes net pension plan assets of $0.6 million.

11. Comparative Figures

Certain 2010 comparative figures have been reclassified to conform with the current year’s presentation.

Government of Saskatchewan – 2010-11 Public Accounts 95

Summary Financial Statements

Accounts Receivable				Schedule 1
As at March 31, 2011
(thousands of dollars)

	2011			2010

Taxation		388,868			386,021
Non-renewable resources		210,545			223,969
Other own-source revenue		505,971			511,408
Transfers from the federal government		415,021			349,107
		1,520,405			1,470,505
Provision for loss		(105,095	)		(98,341	)
Total Accounts Receivable		1,415,310			1,372,164

Loans Receivable				Schedule 2
As at March 31, 2011
(thousands of dollars)

	2011			2010

Government business enterprises		480,414			688,046
Student loans		129,929			126,213
Agricultural loans		53,218			66,008
Other		24,956			25,392
		688,517			905,659
Provision for loss		(82,123	)		(83,573	)
Total Loans Receivable		606,394			822,086

Government Business Enterprises

Loans to government business enterprises are presented net of government business enterprise specific debt of $3.4 billion (2010 - $3.0 billion).

Saskatchewan Power Corporation (SaskPower)

The Government has $100.0 million (2010 - $400.0 million) in loans receivable from SaskPower. The entire balance (2010 - $100.0 million) is repayable over 30 years and bears interest at 4.8 per cent (2010 - 4.8 per cent). In 2010, an additional $300.0 million was repayable on demand at a floating rate of interest. The loans are recorded net of $2.2 million (2010 - $1.0 million) for SaskPower’s equity in sinking funds administered by the Government.

SaskEnergy Incorporated (SaskEnergy)

The Government has $380.0 million (2010 - $255.0 million) in loans receivable from SaskEnergy. Of this, $170.0 million (2010 - $170.0 million) is repayable over terms not exceeding 30 years and bears interest at rates between 4.5 and 4.9 per cent (2010 - 4.5 and 4.9 per cent). The remaining $210.0 million (2010 - $85.0 million) is repayable on demand at a floating rate of interest. The loans are recorded net of $3.6 million (2010 - $1.8 million) for SaskEnergy’s equity in sinking funds administered by the Government.

96 Government of Saskatchewan – 2010-11 Public Accounts

Summary Financial Statements

Loans Receivable (continued)

Schedule 2

Government Business Enterprises (continued)

Other government business enterprise loans

The Government has $6.2 million (2010 - $35.9 million) in loans receivable from other government business enterprises. The loans are repayable on demand at a floating rate of interest.

Student Loans

The program operates under the authority of The Student Assistance and Student Aid Fund Act, 1985. Loans are interest free until the discontinuance of full-time studies or graduation. Interest rates are prescribed by the Government and range between 3.0 and 9.3 per cent (2010 - 4.8 and 12.0 per cent). Student bursaries, study grants and other varieties of loan forgiveness are available to students who meet specific criteria.

The administration and delivery of the federal and provincial student loans programs is integrated. The Government approves applications for both provincial and federal loans. External agencies are contracted to disburse, administer and collect loans, and the federal government is responsible for collection of loans in default.

Student loans approved between August 1996 and July 2001 are lender financed, disbursed, managed and collected by a bank. The Government retained responsibility for loan approval during this period and pays a risk premium of 5.0 per cent to the bank when loans become repayable.

A loss provision of $62.2 million (2010 - $56.2 million) has been recorded on these loans.

Agricultural Loans

Short-term cattle loan program

The Government holds $32.1 million (2010 - $33.7 million) in loans under the short-term cattle loan program. These loans are repayable over terms not exceeding four years at a floating rate of interest between 0.4 and 1.2 per cent (2010 - 0.3 and 0.5 per cent). The loans are secured by general security agreements. The program operates under The Agricultural Credit Corporation of Saskatchewan Act. A loss provision of $5.1 million (2010 - $5.0 million) has been recorded on these loans.

Capital loan program

The Government holds $10.4 million (2010 - $13.0 million) in loans under the capital loan program. These loans are repayable over terms not exceeding 25 years and bear interest at rates between 5.0 and 8.0 per cent (2010 - 5.0 and 8.0 per cent). Security on individual loans varies and may include mortgages on real property, security agreements and guarantees. The program operates under The Agricultural Credit Corporation of Saskatchewan Act. A loss provision of $1.5 million (2010 - $2.2 million) has been recorded on these loans.

Short-term hog loan program

The Government holds $8.7 million (2010 - $15.0 million) in loans under the short-term hog loan program. These loans are repayable over terms not exceeding five years at a floating rate of interest between 0.3 and 1.1 per cent (2010 - 0.2 and 0.5 per cent). The loans are secured by general security agreements. The program operates under The Farm Financial Stability Act. A loss provision of $6.5 million (2010 - $11.9 million) has been recorded on these loans.

Other agricultural loans

The Government holds $2.0 million (2010 - $4.3 million) in loans under various other agricultural loan programs. The interest on these loans ranges from 0.0 to 12.0 per cent (2010 - 0.0 to 10.5 per cent). Generally, the loans are secured by promissory notes and, where applicable, by guarantees or general security arrangements. A loss provision of $1.0 million (2010 - $2.3 million) has been recorded on these loans.

Other

The Government’s loan portfolio also consists of numerous other loans at various interest rates with maturities not exceeding 15 years. Security on the loans may include promissory notes or charges against residential property. A loss provision of $5.8 million (2010 - $6.0 million) has been recorded on these loans.

Government of Saskatchewan – 2010-11 Public Accounts 97

Summary Financial Statements

Investment in Government Business Enterprises
As at March 31, 2011
(thousands of dollars)

	SaskEnergy			SaskPower			SaskTel			SGI			Auto Fund1

Assets
Cash and temporary investments
Due from government organizations		-			-			-			-			-
Other		1,085			(4,991	)		12,886			27,809			80,286
Accounts receivable
Due from government organizations		4,452			10,476			-			-			-
Other		108,230			210,887			86,983			127,479			165,149
Inventories		288,518			144,291			5,810			-			3,336
Prepaid expenses
Paid to government organizations		-			-			-			8,676			16,021
Other		-			16,545			14,100			102,719			11,180
Long-term investments
In government organizations		-			-			-			6,155			5,601
Other		29,338			35,059			2,782			585,206			1,305,872
Capital assets		1,055,935			4,535,035			1,068,519			11,121			41,076
Intangible assets		17,990			23,922			137,911			481			14,762
Sinking funds (schedule 8)		58,839			290,890			64,769			-			-
Other assets		78,530			594			186,676			3,169			2,787
Total Assets		1,642,917			5,262,708			1,580,436			872,815			1,646,070
Liabilities
Accounts payable and accrued liabilities
Due to government organizations		6,743			67,798			4,534			16,776			35,564
Other		127,253			207,770			123,563			37,332			31,536
Dividends payable to government organizations		22,184			-			16,157			15,462			-
Gross debt (schedule 8)
Owing to government organizations		948,829			2,865,743			492,656			-			-
Other		4,816			75,736			-			-			-
Unearned revenue
Received from government organizations		-			-			41,163			-			2,116
Other		-			-			67,400			245,680			323,053
Provision for insurance claims		-			-			-			316,820			1,011,069
Other liabilities		71,092			254,067			7,644			2,428			-
Total Liabilities		1,180,917			3,471,114			753,117			634,498			1,403,338
Net Assets (Debt)		462,000			1,791,594			827,319			238,317			242,732
Revenue
From government organizations		37,067			156,360			41,875			-			4,707
Other		915,092			1,635,251			1,082,790			445,776			811,513
Total Revenue		952,159			1,791,611			1,124,665			445,776			816,220
Expense
Paid and owing to government organizations		61,325			263,568			54,577			16,307			54,709
Other		853,849			1,368,573			919,013			381,113			693,159
Total Expense3		915,174			1,632,141			973,590			397,420			747,868
Income (loss) before non-recurring items		36,985			159,470			151,075			48,356			68,352
Non-recurring items		-			-			4,127			-			-
Net Income		36,985			159,470			155,202			48,356			68,352
Retained earnings (deficit), beginning of year		405,788			972,656			561,799			126,479			88,555
Dividends to government organizations		(48,800	)		-			(139,682	)		(43,520	)		-
Retained earnings (deficit), end of year		393,973			1,132,126			577,319			131,315			156,907
Equity advances from government organizations		71,531			659,993			250,000			80,000			-
Accumulated other comprehensive income (loss)4		(3,504	)		(525	)		-			27,002			85,825
Net Assets (Debt)		462,000			1,791,594			827,319			238,317			242,732

1	Net assets are restricted as disclosed on page 100.
2	Adjustments include:

•	the disposition of discontinued operations prior to March 31, 2011 for a gain on sale of $30.4 million;

•	reclassifying dividends paid by March 31, 2011; and

•	eliminating unrealized inter-organizational losses on transactions with government organizations.

3	Total expense includes debt charges, net of sinking fund earnings, of $201.4 million (2010 - $217.9 million - restated). Interest in the amount of $209.1 million (2010 - $221.6 million) was paid and owing to government organizations.

Accumulated other comprehensive income (loss) consists primarily of market value adjustments on investments and includes other comprehensive income of $138.6 million (2010 - $271.2 million). The other comprehensive income consists of $219.6 million net unrealized gains (2010 - $225.4 million) less $81.0 million net realized gains (2010 - plus $45.8 million net realized losses) recognized in net income.

98 Government of Saskatchewan – 2010-11 Public Accounts

Summary Financial Statements

																Schedule 3


WCB1		SLGA			SGC			MFC		Adjustments2			2011			2010



	-		43,216			-			1		-			43,217			42,577
	45,082		1,590			9,993			-		14,204			187,944			20,066

	-		-			-			-		-			14,928			12,453
	20,404		49,675			309			1,395		-			770,511			784,099
	-		27,602			314			-		-			469,871			488,463

	-		-			-			-		-			24,697			23,041
	292		1,025			414			-		-			146,275			129,271

	10,481		-			-			6,388		-			28,625			43,594
	1,401,662		-			-			104,321		-			3,464,240			3,185,880
	13,881		39,776			60,125			-		-			6,825,468			6,362,826
	17,138		-			-			-		-			212,204			183,246
	-		-			-			-		1,552			416,050			372,219
	7,602		-			-			42		(48,073	)		231,327			256,179
	1,516,542		162,884			71,155			112,147		(32,317	)		12,835,357			11,903,914


	10,125		-			5,086			-		-			146,626			141,753
	18,557		24,507			8,798			588		-			579,904			580,681
	-		98,303			2,825			-		(56,628	)		98,303			116,121

	-		-			6,000			95,051		1,552			4,409,831			4,097,407
	-		-			10,023			-		-			90,575			106,524

	-		-			-			-		(41,163	)		2,116			2,175
	-		-			-			-		-			636,133			586,570
	1,021,265		-			-			-		-			2,349,154			2,250,469
	165,106		45,222			7,561			-		(7,644	)		545,476			465,111
	1,215,053		168,032			40,293			95,639		(103,883	)		8,858,118			8,346,811
	301,489		(5,148	)		30,862			16,508		71,566			3,977,239			3,557,103

	26,298		-			-			-		(1,237	)		265,070			208,894
	268,571		1,012,873			137,396			4,763		-			6,314,025			6,279,046
	294,869		1,012,873			137,396			4,763		(1,237	)		6,579,095			6,487,940

	21,694		-			21,675			3,379		-			497,234			492,564
	261,064		570,371			94,217			25		5,094			5,146,478			5,171,181
	282,758		570,371			115,892			3,404		5,094			5,643,712			5,663,745
	12,111		442,502			21,504			1,359		(6,331	)		935,383			824,195
	-		-			-			-		30,403			34,530			9,404
	12,111		442,502			21,504			1,359		24,072			969,913			833,599
	170,756		(10,587	)		8,907			15,149		47,487			2,386,989			2,192,120
	-		(437,063	)		(19,354	)		-		-			(688,419	)		(638,730	)
	182,867		(5,148	)		11,057			16,508		71,559			2,668,483			2,386,989
	-		-			19,805			-		7			1,081,336			1,081,336
	118,622		-			-			-		-			227,420			88,778
	301,489		(5,148	)		30,862			16,508		71,566			3,977,239			3,557,103

Government of Saskatchewan – 2010-11 Public Accounts 99

Summary Financial Statements

Investment in Government Business Enterprises (continued)

Schedule 3

The investment in government business enterprises is comprised of the Government’s equity in the entities listed below. The financial statements of these entities are prepared in accordance with Canadian generally accepted accounting principles, and will be impacted by the future accounting policy changes mentioned in note 1.

SaskEnergy Incorporated (SaskEnergy)

SaskEnergy promotes, transports, stores and distributes natural gas in Saskatchewan.

Saskatchewan Power Corporation (SaskPower)

SaskPower generates, purchases, transmits, distributes and sells electricity and related products and services.

Saskatchewan Telecommunications Holding Corporation (SaskTel)

SaskTel markets and supplies a range of voice, data, internet, wireless, text, image, security and entertainment products, systems and services. Through interconnection agreements, SaskTel is part of the national and global communications network.

Saskatchewan Government Insurance (SGI) and Saskatchewan Auto Fund (Auto Fund)

SGI’s competitive general insurance business, SGI CANADA, offers a comprehensive line of home, tenant, farm, automobile extension and commercial coverages.

The Auto Fund, the provincial compulsory vehicle insurance program, is administered by SGI on behalf of the Government. Any net assets of the Auto Fund are held on behalf of Saskatchewan’s motoring public and cannot be used for any other purpose.

Workers’ Compensation Board (Saskatchewan) (WCB)

WCB provides workers’ compensation insurance to Saskatchewan workers and employers. Any net assets of the WCB cannot be used for any other purpose.

Liquor and Gaming Authority (SLGA)

SLGA’s mandate is to control the manufacturing and distribution of beverage alcohol throughout the Province, to oversee the licensing of all establishments selling alcohol in the Province and to maintain the integrity of all licensed gaming while ensuring maximum benefit to Saskatchewan charities.

To fulfill its mandate, SLGA operates retail liquor stores and video lottery terminals. It also owns and manages all slot machines at Saskatchewan Indian Gaming Authority casinos.

Saskatchewan Gaming Corporation (SGC)

SGC manages and operates Casino Regina and Casino Moose Jaw.

Municipal Financing Corporation of Saskatchewan (MFC)

MFC assists municipalities in financing their capital requirements.

100 Government of Saskatchewan – 2010-11 Public Accounts

Summary Financial Statements

Other Investments			Schedule 4
As at March 31, 2011
(thousands of dollars)

	2011		2010

Bonds and debentures		834,784		632,028
Pooled investment funds		96,185		82,162
Equities		75,262		129,784
Loans and advances		34,292		39,521
Other		102,433		101,105
Total Other Investments		1,142,956		984,600

Bonds and Debentures

Bonds and debentures held by the Government have a market value of $835.7 million (2010 - $632.8 million), and include securities of:

	2011		2010

Governments of other provinces (coupon interest range 0.0% to 8.5%; maturing in 1.0 to 26.0 years)		435,676		370,163
Corporations (coupon interest range 2.0% to 10.5%; maturing in 1.0 to 41.3 years)		239,649		204,699
Government of Canada (coupon interest range 2.5% to 10.8%; maturing in 1.3 to 26.2 years)		149,206		41,145
Government of Saskatchewan (coupon interest range 4.2% to 5.8%; maturing in 1.3 to 17.9 years)		4,657		5,697
Other (coupon interest range 3.9% to 5.4%; maturing in 1.3 to 45.3 years)		5,596		10,324
Total Bonds and Debentures		834,784		632,028

Pooled Investment Funds

Pooled investment funds represent the Government’s investment in units of various funds consisting primarily of debt and equities.

Equities

Equities include $64.9 million (2010 - $87.5 million) invested in shares of private companies and $10.4 million (2010 - $42.3 million) invested in Canadian and international equity markets for which the quoted market value is $12.4 million (2010 - $50.1 million). Investments in equities are as follows:

	2011		2010

Equities subject to significant influence
Meadow Lake OSB Limited Partnership1		23,695		24,620
Other		16,766		21,583
Other
Premium Brands Holding Corporation2		1,676		10,796
Crescent Point Energy Corporation3		-		19,412
Other		33,125		53,373
Total Equities		75,262		129,784

The Government, as a limited partner, holds a 25 per cent interest in Meadow Lake OSB Limited Partnership (ML OSB), an oriented strand board facility near Meadow Lake. The Government has issued options to purchase its units of ML OSB, which, if exercised, would reduce the Government’s interest to 17.6 per cent.

The Government owns units in Premium Brands Holding Corporation (PBH) with a market value of $2.7 million (2010 - $17.0 million). PBH owns a broad range of leading branded specialty food businesses with manufacturing and distribution facilities located throughout Western Canada. During the year, the Government sold a significant portion of its interest in PBH for proceeds of $15.0 million realizing a gain on sale of $5.8 million.

3	During the year, the Government disposed of its interest in Crescent Point Energy Corporation for proceeds of $22.4 million realizing a gain on sale of $2.9 million.

Government of Saskatchewan – 2010-11 Public Accounts 101

Summary Financial Statements

Other Investments (continued)

Schedule 4

Loans and Advances

Loans and advances include loan agreements between the Government and companies in which the Government holds shares.

Other

Other investments include various fixed rate securities having a market value of $103.2 million (2010 - $101.5 million).

102 Government of Saskatchewan – 2010-11 Public Accounts

Summary Financial Statements

Accounts Payable and Accrued Liabilities			Schedule 5
As at March 31, 2011
(thousands of dollars)

	2011		2010

Accrued salaries and benefits		594,461		608,935
Transfers
Operating1		464,437		404,191
Capital		51,153		59,628
Supplier payments		375,211		378,571
Equalization and Canada Health and Social Transfer repayable to the federal
government		251,191		275,000
Accrued interest		109,987		114,179
Other		369,485		413,484
Total Accounts Payable and Accrued Liabilities		2,215,925		2,253,988
1 Includes transfers to the federal government of $119.6 million (2010 - $150.1 million).



Other Liabilities			Schedule 6
As at March 31, 2011
(thousands of dollars)

		2011		2010


Environmental		161,816		132,903
Funds held on behalf of government business enterprises and others
Liquor and Gaming Authority		44,363		44,094
Other		54,005		54,264
Capital leases (note 6)		37,356		40,351
Other		94,276		102,217
Total Other Liabilities		391,816		373,829



Unearned Revenue			Schedule 7
As at March 31, 2011
(thousands of dollars)

		2011		2010

Housing contributions		139,637		121,583
Education contributions		51,727		62,819
Motor vehicle licensing fees		50,441		37,366
Water supply and infrastructure		45,097		7,365
Health contributions		39,773		38,638
Crown mineral leases		20,950		19,860
Other		31,234		33,670
Total Unearned Revenue		378,859		321,301

Government of Saskatchewan – 2010-11 Public Accounts 103

Summary Financial Statements

Public Debt														Schedule 8
As at March 31, 2011
(thousands of dollars)

	2011								2010
				Government								Government
				Business								Business
				Enterprise								Enterprise
	General			Specific		Public			General			Specific		Public
	Debt1 2 3			Debt 2		Debt			Debt1 2 3			Debt 2		Debt

General Revenue Fund		4,135,226			-		4,135,226			4,140,482			-		4,140,482
Less amounts held by
government service organizations		(45,211	)		-		(45,211	)		(43,732	)		-		(43,732	)
Saskatchewan Power Corporation4		97,823			2,490,267		2,588,090			398,953			2,196,212		2,595,165
SaskEnergy Incorporated4		376,342			489,749		866,091			253,237			569,023		822,260
Saskatchewan Telecommunications Holding
Corporation4		-			369,928		369,928			29,500			262,151		291,651
Municipal Financing Corporation
of Saskatchewan4		6,249			97,330		103,579			6,356			90,154		96,510
Regional Health Authorities		81,227			-		81,227			74,717			-		74,717
Boards of Education		74,079			-		74,079			87,332			-		87,332
Saskatchewan Water Corporation		49,151			-		49,151			50,973			-		50,973
Saskatchewan Housing Corporation		38,745			-		38,745			41,748			-		41,748
Saskatchewan Opportunities Corporation		36,170			-		36,170			34,536			-		34,536
Saskatchewan Immigrant Investor Fund Inc.		17,297			-		17,297			-			-		-
Saskatchewan Gaming Corporation4		-			14,585		14,585			-			20,178		20,178
Information Services Corporation
of Saskatchewan		13,547			-		13,547			13,547			-		13,547
Other		5,131			-		5,131			1,643			-		1,643
Public Debt1 5		4,885,776			3,461,859		8,347,635			5,089,292			3,137,718		8,227,010

1	Public debt on the Statement of Financial Position includes only general debt.

2	General debt and government business enterprise specific debt are presented net of sinking funds.

3	General debt includes $78.9 million (2010 - $82.5 million) primarily secured by assets with a carrying value of $113.7 million (2010 - $154.1 million).

Public debt of government business enterprises includes both general debt and government business enterprise specific debt. General debt of government business enterprises represents amounts transferred from the General Revenue Fund to government business enterprises and recorded as loans receivable (schedule 2). Government business enterprise specific debt represents debt issued by, or specifically on behalf of, government business enterprises.

Schedule 3 provides information on government business enterprises as presented in their audited financial statements closest to March 31, 2011. Public debt of government business enterprises shown above has been adjusted for transactions occurring from the audited financial statements to March 31, 2011 as follows:

	2011							2010
	Government
	Business
	Enterprise		Transactions			Public		Public
	Debt		to March 31			Debt		Debt
	(schedule 3)a

Saskatchewan Power Corporation		2,650,589		(62,499	)		2,588,090		2,595,165
SaskEnergy Incorporated		894,806		(28,715	)		866,091		822,260
Saskatchewan Telecommunications Holding Corporation		427,887		(57,959	)		369,928		291,651
Municipal Financing Corporation of Saskatchewan		95,051		8,528			103,579		96,510
Saskatchewan Gaming Corporation		16,023		(1,438	)		14,585		20,178
Total Government Business Enterprises		4,084,356		(142,083	)		3,942,273		3,825,764

a	Includes gross debt net of sinking funds reported on schedule 3.

104 Government of Saskatchewan – 2010-11 Public Accounts

Summary Financial Statements

Public Debt (continued)

Schedule 8

5	Public debt payable in U.S. dollars of 38.8 million (2010 - 53.8 million) has been converted to $37.2 million Canadian (2010 - $54.6 million) at the exchange rate in effect at March 31, 2011 of 0.9718 (2010 - 1.0156).

Public debt is comprised of gross debt net of sinking funds as follows:

	2011
	Gross			Sinking			Public
	Debta			Funds			Debt
				(schedule 9)

General Revenue Fund		6,111,642			(1,976,416	)		4,135,226
Less amounts held by government service organizations		(45,211	)		-			(45,211	)
Saskatchewan Power Corporation		2,886,824			(298,734	)		2,588,090
SaskEnergy Incorporated		925,999			(59,908	)		866,091
Saskatchewan Telecommunications Holding Corporation		436,600			(66,672	)		369,928
Municipal Financing Corporation of Saskatchewan		105,153			(1,574	)		103,579
Regional Health Authorities		81,227			-			81,227
Boards of Education		74,079			-			74,079
Saskatchewan Water Corporation		54,912			(5,761	)		49,151
Saskatchewan Housing Corporation		60,987			(22,242	)		38,745
Saskatchewan Opportunities Corporation		36,684			(514	)		36,170
Saskatchewan Immigrant Investor Fund Inc.		17,297			-			17,297
Saskatchewan Gaming Corporation		14,585			-			14,585
Information Services Corporation of Saskatchewan		13,547			-			13,547
Other		5,131			-			5,131
Public Debt		10,779,456			(2,431,821	)		8,347,635

The average effective interest rate on gross debt during 2010-11 was 6.4 per cent (2009-10 - 6.7 per cent) and includes the impact of foreign exchange and the amortization of any premiums or discounts associated with the debentures. The average term to maturity of gross debt is 11.5 years (2010 - 11.1 years).

Debt principal payment requirements in each of the next five years and thereafter are as follows:

	2011			2010
Year of Maturity

Short-term promissory notes		586,293			650,000
2010-11		-			678,616
2011-12		292,342			285,263
2012-13		1,184,522			1,186,233
2013-14		819,201			822,463
2014-15		925,781			926,434
2015-16		538,696			-
6-10 years		1,799,612			1,325,946
Thereafter		4,633,009			5,049,430
Gross debta		10,779,456			10,924,385
Sinking funds		(2,431,821	)		(2,697,375	)
Public Debt		8,347,635			8,227,010

a	Gross debt includes debentures of $104.5 million (2010 - $104.5 million) that provide the holder with a choice of dates on which the debt matures. The year of maturity reflects the earliest possible date of maturity rather than the maximum term to maturity.

Gross debt includes Canada Pension Plan debentures of $745.1 million (2010 - $745.1 million). These debentures are callable in whole or in part before maturity, at the option of the Minister of Finance of Saskatchewan.

Government of Saskatchewan – 2010-11 Public Accounts 105

Summary Financial Statements

Sinking Funds													Schedule 9
As at March 31, 2011
(thousands of dollars)

	2010		2011
	Sinking									Currency			Sinking
	Funds		Contributions1		Earnings2		Redemptions3			Adjustment			Funds

General Revenue Fund		2,286,526		54,609		148,794		(502,972	)		(10,541	)		1,976,416
Saskatchewan Power Corporation		255,872		24,722		18,140		-			-			298,734
Saskatchewan Telecommunications Holding
Corporation		70,984		2,366		4,582		(11,260	)		-			66,672
SaskEnergy Incorporated		58,739		7,112		4,066		(10,009	)		-			59,908
Saskatchewan Housing Corporation		20,355		520		1,367		-			-			22,242
Saskatchewan Water Corporation		3,502		1,979		280		-			-			5,761
Municipal Financing Corporation of Saskatchewan		1,150		332		92		-			-			1,574
Saskatchewan Opportunities Corporation		247		237		30		-			-			514
Total Sinking Funds4		2,697,375		91,877		177,351		(524,241	)		(10,541	)		2,431,821

	2012		2013		2014		2015		2016		Thereafter		Total

General debta		50,652		49,607		49,607		42,721		33,410		363,753		589,750
Government business enterprise
specific debt		35,834		35,334		35,334		34,312		33,812		480,220		654,846
Total Sinking Fund Contributions		86,486		84,941		84,941		77,033		67,222		843,973		1,244,596

Each year, until 2015, includes contributions of 1.0 million U.S. dollars.

2	Sinking fund earnings include gains on investment sales of $71.6 million (2010 - $67.9 million).

3	The redemption value is based on the market value of the sinking fund units at the date of redemption.

4	The market value of total sinking funds is $2,415.6 million (2010 - $2,701.8 million). Total sinking funds by debt classification are as follows:

	2010		2011
	Sinking									Currency			Sinking
	Funds		Contributions		Earnings		Redemptions			Adjustment			Funds

General Debt		2,313,440		60,045		150,796		(502,972	)		(10,541	)		2,010,768
Government business enterprise specific debt		383,935		31,832		26,555		(21,269	)		-			421,053
Total Sinking Funds		2,697,375		91,877		177,351		(524,241	)		(10,541	)		2,431,821

Sinking fund assets have been invested as follows:

	2011		2010
Long-term investments in securities of:
Governments of other provinces (coupon interest range 0.0% to 9.6%; maturing in 2.9 to 31.2 years)		1,257,328		1,165,580
Government of Saskatchewan (coupon interest range 0.0% to 10.3%; maturing in 2.2 to 29.2 years)		382,781		469,604
Government of Canada (coupon interest range 3.0% to 5.0%; maturing in 4.0 to 30.2 years)		128,655		464,899
Corporations (coupon interest 5.0%; maturing in 2.6 years)		10,499		10,680
Government of the United States (coupon interest range 3.9% to 4.5%; maturing in 27.1 to 29.4 years)		6,954		24,648
Cash, short-term investments and accrued interesta		645,604		561,964
Total Sinking Fundsb		2,431,821		2,697,375

a	Cash, short-term investments and accrued interest are disclosed net of $0.5 million (2010 - $0.6 million) in liabilities.

b	Included in total sinking funds are U.S. dollar cash, investments and accrued interest converted to $230.1 million Canadian (2010 - $224.7 million) at the exchange rate in effect at March 31, 2011 of 0.9718 (2010 - 1.0156).

106 Government of Saskatchewan – 2010-11 Public Accounts

Summary Financial Statements

Pension Liabilities													Schedule 10
As at March 31, 2011
(thousands of dollars)

	2011												2010
	TSP1			PSSP			Others			Total			Total
Accrued benefit obligation,
beginning of year		5,152,049			1,898,650			510,065			7,560,764			7,248,816
Adjustment for Boards of Education (note 10)														71,396
Current period benefit cost		35,032			9,127			9,286			53,445			63,353
Plan amendment														(173	)
Interest cost		255,397			90,465			19,775			365,637			375,420
Actuarial losses					33,903			10,863			44,766			180,926
Joint defined benefit plan (SHEPP)2								59,786			59,786			78,851
Benefit payments		(323,573	)		(121,377	)		(25,035	)		(469,985	)		(457,825	)
Accrued Benefit Obligation, End of Year		5,118,905			1,910,768			584,740			7,614,413			7,560,764
Plan assets, beginning of year		1,174,158						267,847			1,442,005			1,486,890
Adjustment for Boards of Education (note 10)														72,011
Employer contributions		89,271			119,065			9,009			217,345			176,037
Employee contributions		8,662			2,312			1,925			12,899			16,163
Return on plan assets		70,048						17,598			87,646			93,715
Actuarial gains								3,681			3,681			55,014
Benefit payments		(323,573	)		(121,377	)		(25,035	)		(469,985	)		(457,825	)
Plan Assets, End of Year3		1,018,566						275,025			1,293,591			1,442,005
		4,100,339			1,910,768			309,715			6,320,822			6,118,759
Unamortized estimation adjustments4		(68,955	)		(64,768	)		(11,304	)		(145,027	)		(246,989	)
Total Pension Liabilities5		4,031,384			1,846,000			298,411			6,175,795			5,871,770

1	The TSP had an actual rate of return on plan assets of 10.8 per cent (2010 - 15.0 per cent).

The joint defined benefit plan includes only the Government’s employer portion of the pension liability. At December 31, 2010, the SHEPP had a total accrued benefit obligation of $3,763.3 million (2009 - $3,779.5 million) and pension fund assets of $3,467.2 million (2009 - $3,278.5 million) at market related values and unamortized estimation adjustment gains of $48.9 million (2009 - losses of $274.0 million). The pension liability would increase by $547.9 million or would decrease by $445.2 million if the discount rate was decreased or increased by one percentage point respectively. The market value of the pension fund investments was $3,330.9 million (2009 - $2,942.7 million). Of this amount, 34.0 per cent (2009 - 36.6 per cent) was invested in fixed income securities and 59.0 per cent (2009 - 59.2 per cent) in equity investments. The plan assets had an actual rate of return of 11.6 per cent (2009 - 14.6 per cent). The Government and member contributions to the plan totalled $108.9 million (2009 - $93.6 million) and $103.7 million (2009 - $89.9 million) respectively. Benefit payments from the plan totalled $143.5 million (2009 - $130.0 million).

3	At March 31, 2011, the market value of defined benefit plan investments was $1,185.5 million (2010 - $1,299.4 million). Of this amount, 42.6 per cent (2010 - 43.0 per cent) was invested in fixed income securities and 45.2 per cent (2010 - 48.1 per cent) in equity investments.

Unamortized estimation adjustments are amortized to pension expense over periods ranging from 3.7 to 4.0 years for the TSP, from 1.5 to 3.9 years for the PSSP and from 1.5 to 13 years for the other plans. These represent the expected average remaining service life of active plan members at the time the estimation adjustments arose.

The total pension liabilities are based on the latest actuarial valuations extrapolated to March 31, 2011 for the defined benefit plans and December 31, 2010 for the joint defined benefit plan. Changes in assumptions can result in significantly higher or lower estimates of pension liabilities. A one percentage point decrease in the discount rate would result in a $624.2 million and $227.4 million increase in the pension liabilities for the TSP and the PSSP respectively, and a one percentage point increase would result in a $516.1 million and $189.2 million decrease in the pension liabilities for the TSP and the PSSP respectively.

Government of Saskatchewan – 2010-11 Public Accounts 107

Summary Financial Statements

Tangible Capital Assets																					Schedule 11
As at March 31, 2011
(thousands of dollars)

	2011																					2010
	Land &			Buildings &			Machinery			Trans-			Office &
	Improve-			Improve-			&			portation			Information			Infra-
	ments			ments			Equipment			Equipment			Technology			structure			Total			Total
	3 years-
Estimated useful life	Indefinite			2-75 years			2-33 years			3-40 years			2-25 years			3-60 years

Opening Net Book Value of
Tangible Capital Assets1		397,761			2,705,133			351,030			273,320			231,397			2,252,971			6,211,612			4,780,446

Opening cost		445,537			5,096,063			1,107,367			490,087			678,614			4,109,253			11,926,921			9,118,944
Adjustment for:
Boards of Education (note 10)		-			-			-			-			-			-			-			2,212,134
Other 3		-			-			-			-			-			-			-			(48,327	)
Acquisitions		22,050			255,500			51,624			30,069			101,574			353,267			814,084			772,771
Write-downs		(180	)		(7,352	)		(2,792	)		(1,756	)		(19,322	)		-			(31,402	)		(17,285	)
Disposals		(11,336	)		(12,252	)		(22,306	)		(14,207	)		(17,972	)		(19,980	)		(98,053	)		(111,316	)
Closing Cost 2		456,071			5,331,959			1,133,893			504,193			742,894			4,442,540			12,611,550			11,926,921
Opening accumulated amortization		47,776			2,390,930			756,337			216,767			447,217			1,856,282			5,715,309			4,338,498
Adjustment for:
Boards of Education (note 10)		-			-			-			-			-			-			-			1,050,700
Other 3		-			-			-			-			-			-			-			(212	)
Annual amortization		2,403			152,910			64,246			31,037			77,057			123,062			450,715			416,234
Write-downs		(30	)		(3,686	)		(1,296	)		(1,735	)		(19,186	)		-			(25,933	)		(12,653	)
Disposals		(2,381	)		(4,161	)		(19,377	)		(11,378	)		(17,074	)		(19,584	)		(73,955	)		(77,258	)
Closing Accumulated Amortization		47,768			2,535,993			799,910			234,691			488,014			1,959,760			6,066,136			5,715,309
Closing Net Book Value of
Tangible Capital Assets1		408,303			2,795,966			333,983			269,502			254,880			2,482,780			6,545,414			6,211,612

1	Net book value of tangible capital assets does not include the following:

•	works of art and historical treasures, such as the Legislative Building;

•	items inherited by right of the Crown, such as Crown lands, forests, water and mineral resources, which are not recognized in these financial statements; and

•	capital assets held by government business enterprises (schedule 3).

2	Closing cost includes work-in-progress of $401.8 million (2010 - $342.4 million).

3	Prior year reduction in net book value of $48.1 million represents the loss of control of Big Sky Farms Inc. net of the gain of control of a health care affiliate.

108 Government of Saskatchewan – 2010-11 Public Accounts

Summary Financial Statements

Revenue				Schedule 12
For the Year Ended March 31, 2011
(thousands of dollars)

	2011			2010
Taxation
Individual income		1,795,788			1,890,848
Provincial sales		1,186,992			1,084,001
Corporation income		1,155,273			881,424
Property		605,495			595,150
Fuel		463,147			441,533
Tobacco		237,507			196,868
Other		292,935			237,599
Total Taxation		5,737,137			5,327,423

Non-renewable Resources
Oil		1,274,053			1,294,670
Crown land sales		466,993			151,455
Resource surcharge		360,848			475,632
Potash		262,540			(183,887	)
Natural gas		29,741			40,078
Other		133,624			132,676
Total Non-renewable Resources		2,527,799			1,910,624

Other Own-source Revenue
Fees
Motor vehicle licensing		161,093			158,303
Health care		158,191			153,240
Education		136,324			125,271
Subsidized housing rental		96,817			94,777
Registry		62,207			58,548
Other		354,599			303,592
Investment income
Interest and dividends		242,166			273,292
Gain on sale of other investments (schedule 16)		20,065			36,474
Losses from equities (schedule 16)		(592	)		(5,973	)
Insurance		177,617			213,921
Commodity sales		19,830			82,931
Other1		529,580			507,304
Total Other Own-source Revenue		1,957,897			2,001,680
Total Own-source Revenue		10,222,833			9,239,727
Transfers from the Federal Government
Canada Health Transfer		795,422			819,262
Canada Social Transfer		342,626			334,976
Agricultural stability contributions		260,668			138,779
Crop insurance contributions		130,573			158,855
Housing subsidy		83,322			77,642
Other		492,242			473,533
Total Transfers from the Federal Government		2,104,853			2,003,047
Total Revenue		12,327,686			11,242,774

1	Includes reversals and refunds of prior year expenses of $58.7 million (2010 - $62.0 million).

Government of Saskatchewan – 2010-11 Public Accounts 109

Summary Financial Statements

Expense by Object		Schedule 13
For the Year Ended March 31, 2011
(thousands of dollars)

	2011	2010

Salaries and benefits	5,274,142	5,131,319
Transfers
Operating	3,786,488	3,304,376
Capital	409,678	474,904
Operating costs	1,942,223	1,968,923
Debt charges (schedule14)	709,275	773,892
Amortization of tangible capital assets (schedule 11)	450,715	416,234
Other	738,370	415,970
Total Expense	13,310,891	12,485,618

Debt Charges			Schedule 14
For the Year Ended March 31, 2011
(thousands of dollars)

	2011		2010

Total interest costs	930,563		992,789
Interest reimbursed from government business enterprises1	(225,651	)	(223,675	)
Net foreign exchange gain	(213	)	(511	)
Other costs	4,576		5,289
Total Debt Charges	709,275		773,892

1	Interest reimbursed for debt borrowed by the Government specifically on behalf of government business enterprises.

Comparison of Estimated to Actual Results							Schedule 15
For the Year Ended March 31, 2011
(thousands of dollars)

	2011						2010
	Estimated1			Actual1			Actual
Treasury Board Organizations
General Revenue Fund		20,000			47,669			424,500
Growth and Financial Security Fund		(194,186	)		47,669			(256,795	)
Other Treasury Board Organizations2		(503,361	)		90,542			(425,719	)
		(677,547	)		185,880			(258,014	)
CIC Board Organizations2		(26,050	)		(167,647	)		(424,789	)
		(703,597	)		18,233			(682,803	)
Not-for-Profit Insurance Organizations		80,941			(31,525	)		273,558
Deficit		(622,656	)		(13,292	)		(409,245	)

1	Presented on the basis of the summary financial budget.

2	Net of dividends paid to other government organizations.

110 Government of Saskatchewan – 2010-11 Public Accounts

Summary Financial Statements

Supplemental Cash Flow Information				Schedule 16
For the Year Ended March 31, 2011
(thousands of dollars)

	2011			2010
Other Non-cash Items Included in the Deficit
Amortization of tangible capital assets (schedule 11)		450,715			416,234
Write-downs of tangible capital assets (schedule 11)		5,469			4,632
Net loss (gain) on other investments1		2,516			(20,255	)
Net foreign exchange gain		(213	)		(511	)
Net (decrease) increase to provision for loss on loans receivable (schedule 2)		(1,450	)		10,864
Net gain on disposal of tangible capital assets		(5,765	)		(20,574	)
Earnings retained in sinking funds (schedule 9)		(150,796	)		(161,008	)
Total Other Non-cash Items Included in the Deficit		300,476			229,382

Net Change in Non-cash Operating Activities
Increase in accounts receivable		(43,146	)		(263,903	)
Decrease in inventories held for resale		1,324			31,161
Decrease in deferred charges		3,460			5,203
(Decrease) increase in accounts payable and accrued liabilities		(38,063	)		22,747
Increase in unearned revenue		57,558			70,333
Increase in pension liabilities		304,025			422,446
Increase in prepaid expenses		(5,360	)		(10,354	)
Increase in inventories held for consumption		(9,967	)		(32,984	)
		269,831			244,649
Adjustment for inclusion of Boards of Education (note 10)		-			323,133
Net Change in Non-cash Operating Activities		269,831			567,782

Other Supplemental Information
Cash interest paid during the year		433,361			510,355
Cash interest received during the year		151,300			191,800

1	Net loss (gain) on other investments consists of:

	2011			2010

Gain on sale of other investments		(20,065	)		(36,474	)
Losses from equities		592			5,973
Provision for loss		21,989			10,246
Net loss (gain) on other investments		2,516			(20,255	)

Government of Saskatchewan – 2010-11 Public Accounts 111

Summary Financial Statements

Segment Disclosure
For the Year Ended March 31, 2011
(thousands of dollars)

	Treasury Board Organizations1


		2011		2010

Revenue
Taxation		5,737,137		5,327,423
Non-renewable resources		2,527,799		1,910,624
Transfers from government organizations		479,500		755,000
Other own-source revenue		1,687,806		1,596,504
Transfers from the federal government		1,894,547		1,725,571
Total Revenue (schedule 12)		12,326,789		11,315,122

Expense
Agriculture		690,566		414,320
Community development		532,166		576,005
Debt charges (schedule 14)		708,858		768,062
Economic development		248,783		214,709
Education		2,997,736		2,910,231
Environment and natural resources		214,238		202,365
Health		4,676,530		4,519,904
Protection of persons and property		493,153		437,655
Social services and assistance		1,079,279		1,032,358
Transportation		478,724		473,333
Other		459,643		448,972
Total Expense (schedule 13)		12,579,676		11,997,914
(Deficit) surplus from government service organizations		(252,887	)	(682,792	)
Income (loss) from government business enterprises (schedule 3)		438,767		424,778
(Deficit) Surplus (schedule 15)		185,880		(258,014	)

The segments of the Summary financial statements are based on the accountability and control relationships between the Government and the various organizations within the government reporting entity. Schedule 18 identifies the organizations included in each segment.

1	Treasury Board organizations include the General Revenue Fund, Growth and Financial Security Fund and organizations such as Regional Health Authorities, Boards of Education and Liquor and Gaming Authority.

2	CIC Board organizations are agencies that are responsible to the Crown Investment Corporation of Saskatchewan (CIC) and include organizations such as Saskatchewan Power Corporation, Saskatchewan Telecommunications Holding Corporation and CIC Asset Management Inc.

Not-for-profit insurance organizations are intended to be actuarially sound over the long term. These entities typically adjust rates to break even over the longer term and include Saskatchewan Auto Fund, Saskatchewan Crop Insurance Corporation, Crop Reinsurance Fund of Saskatchewan and Workers’ Compensation Board (Saskatchewan).

112 Government of Saskatchewan – 2010-11 Public Accounts

Summary Financial Statements

																					Schedule 17



CIC Board Organizations2						Not-for-Profit Insurance Organizations3						Eliminations						Total
2011			2010			2011			2010			2011			2010			2011			2010


	-			-			-			-			-			-			5,737,137			5,327,423
	-			-			-			-			-			-			2,527,799			1,910,624
	-			-			194,411			235,264			(673,911	)		(990,264	)		-			-
	151,007			224,828			160,584			180,348			(41,500	)		-			1,957,897			2,001,680
	-			-			210,306			277,476			-			-			2,104,853			2,003,047
	151,007			224,828			565,301			693,088			(715,411	)		(990,264	)		12,327,686			11,242,774

	-			65,497			677,289			382,336			(233,165	)		(234,379	)		1,134,690			627,774
	-			-			-			-			-			-			532,166			576,005
	3,163			6,715			-			-			(2,746	)		(885	)		709,275			773,892
	42,769			64,487			-			-			-			-			291,552			279,196
	-			-			-			-			-			-			2,997,736			2,910,231
	27,009			22,830			-			-			-			-			241,247			225,195
	-			-			-			-			-			-			4,676,530			4,519,904
	44,266			42,511			-			-			-			-			537,419			480,166
	-			-			-			-			-			-			1,079,279			1,032,358
	27,030			26,285			-			-			-			-			505,754			499,618
	145,600			112,307			-			-			-			-			605,243			561,279
	289,837			340,632			677,289			382,336			(235,911	)		(235,264	)		13,310,891			12,485,618
	(138,830	)		(115,804	)		(111,988	)		310,752			(479,500	)		(755,000	)		(983,205	)		(1,242,844	)
	450,683			446,015			80,463			(37,194	)		-			-			969,913			833,599
	311,853			330,211			(31,525	)		273,558			(479,500	)		(755,000	)		(13,292	)		(409,245	)

Government of Saskatchewan – 2010-11 Public Accounts 113

Summary Financial Statements

Government Reporting Entity			Schedule 18
For the Year Ended March 31, 2011

Government Service Organizations (Consolidated)

Agricultural Credit Corporation of Saskatchewan		Forest Management Funds
Agricultural Implements Board			Crown Agricultural Land Forest Fund 3
Beef Development Board 2			Island Forests Management Fund 3
Boards of Education 6c			Meadow Lake OSB Forest Management Trust Fund 3
	Chinook School Division No. 211		Mee-Toos Forest Management Fund Trust 3
	Christ the Teacher Roman Catholic Separate School Division		Mistik Forest Management Trust
	No. 212		North West Communities Wood Products Forest Management
	Conseil des écoles fransaskoises no. 310		Fund Trust 3
	Creighton School Division No. 111		Park Land Forests Management Fund 3
	Englefeld Protestant Separate School Division No. 132		Zelensky Bros. Forest Management Fund Trust 3
	Good Spirit School Division No. 204	General Revenue Fund
	Holy Family Roman Catholic Separate School Division No. 140	Global Transportation Hub Authority
	Holy Trinity Roman Catholic Separate School Division No. 22	Government House Foundation
	Horizon School Division No. 205	Gradworks Inc. 6d 7a
	Ile-a-la Crosse School Division No. 112	Growth and Financial Security Fund
	Light of Christ Roman Catholic Separate School Division No. 16	Health Quality Council
	Living Sky School Division No. 202	Horned Cattle Fund
	Lloydminster Roman Catholic Separate School Division No. 89	Individual Cattle Feeder Loan Guarantee Provincial Assurance Fund
	Lloydminster School Division No. 99	Information Services Corporation of Saskatchewan 6d 7a
	North East School Division No. 200	Innovation Saskatchewan
	Northern Lights School Division No. 113	Institutional Control Monitoring and Maintenance Fund
	Northwest School Division No. 203	Institutional Control Unforeseen Events Fund
	Prairie South School Division No. 210	Law Reform Commission of Saskatchewan
	Prairie Spirit School Division No. 206	Livestock Services Revolving Fund
	Prairie Valley School Division No. 208	Milk Control Board 2 6d
	Prince Albert Roman Catholic Separate School Division No. 6	North Sask Laundry and Support Services Ltd.
	Regina Roman Catholic Separate School Division No. 81	Northern Municipal Trust Account 6d
	Regina School Division No. 4	Oil and Gas Orphan Fund
	Saskatchewan Rivers School Division No. 119	Operator Certification Board
	Saskatoon School Division No. 13	Pastures Revolving Fund
	South East Cornerstone School Division No. 209	Physician Recruitment Agency of Saskatchewan
	St. Augustine Roman Catholic Separate School Division No. 220 4	Prairie Agricultural Machinery Institute
	St. Paul's Roman Catholic Separate School Division No. 20	Public Employees Benefits Agency Revolving Fund
	Sun West School Division No. 207	Public Employees Dental Fund 6d
Cattle Marketing Deductions Fund 2		Public Employees Disability Income Fund 6d
Century Plaza Properties (The Owners: Condominium Corporation		Public Employees Group Life Insurance Fund 6d
	No. 101100609)	Queen’s Printer Revolving Fund
CIC Apex Equity Holdco Ltd. 6d 7a		Regional Colleges 6a
CIC Asset Management Inc. 6d 7a			Carlton Trail Regional College
CIC Economic Holdco Ltd. 6d 7a			Cumberland Regional College
Commercial Revolving Fund			Great Plains College
Community Initiatives Fund			Northlands College
Correctional Facilities Industries Revolving Fund			North West Regional College
Criminal Property Forfeiture Fund			Parkland Regional College
Crop Reinsurance Fund of Saskatchewan 7b			Southeast Regional College
Crown Investments Corporation of Saskatchewan		Regional Health Authorities
	(non-consolidated) 6d 7a		Cypress Regional Health Authority
eHealth Saskatchewan 5			Five Hills Regional Health Authority
Enterprise Saskatchewan			Heartland Regional Health Authority
Extended Health Care Plan for Certain Other Employees 6d			Keewatin Yatthé Regional Health Authority
Extended Health Care Plan for Certain Other Retired Employees 3 6d			Kelsey Trail Regional Health Authority
First Nations and Métis Fund Inc. 6d 7a			Mamawetan Churchill River Regional Health Authority
Fish and Wildlife Development Fund			Prairie North Regional Health Authority

114 Government of Saskatchewan – 2010-11 Public Accounts

Summary Financial Statements

Government Reporting Entity (continued)			Schedule 18

Government Service Organizations (Consolidated) (continued)
Regional Health Authorities (continued)		Saskatchewan Institute of Applied Science and Technology 6a
	Prince Albert Parkland Regional Health Authority	Saskatchewan Labour Market Commission
	Regina Qu'Appelle Regional Health Authority	Saskatchewan Legal Aid Commission
	Saskatoon Regional Health Authority	Saskatchewan Lotteries Trust Fund for Sport, Culture and
	Sun Country Regional Health Authority		Recreation
	Sunrise Regional Health Authority	Saskatchewan Opportunities Corporation 6d 7a
Saskatchewan Agricultural Stabilization Fund		Saskatchewan Research Council
Saskatchewan Apprenticeship and Trade Certification Commission 6a		Saskatchewan Snowmobile Fund
Saskatchewan Archives Board		Saskatchewan Student Aid Fund
Saskatchewan Arts Board		Saskatchewan Transportation Company 6d 7a
Saskatchewan Association of Health Organizations		Saskatchewan Water Corporation 6d 7a
Saskatchewan Cancer Agency		Saskatchewan Watershed Authority
Saskatchewan Centre of the Arts Fund		Saskatchewan Western Development Museum
Saskatchewan Communications Network Corporation 2		Sask911 Account
Saskatchewan Crop Insurance Corporation 7b		School Division Tax Loss Compensation Fund
Saskatchewan Development Fund Corporation 6d 7a		Technology Supported Learning Revolving Fund
Saskatchewan Financial Services Commission Fund		Training Completions Fund
Saskatchewan Grain Car Corporation 6b		Transportation Partnerships Fund
Saskatchewan Health Research Foundation		University of Regina Crown Foundation
Saskatchewan Heritage Foundation		University of Saskatchewan Crown Foundation
Saskatchewan Housing Corporation 6d		Victims’ Fund
Saskatchewan Immigrant Investor Fund Inc. 1 6d 7a		Water Appeal Board
Saskatchewan Impaired Driver Treatment Centre Board of
	Governors


Government Business Enterprises (Modified Equity)
Liquor and Gaming Authority
Municipal Financing Corporation of Saskatchewan 6d
Saskatchewan Auto Fund 6d 7b
Saskatchewan Gaming Corporation 6d 7a
Saskatchewan Government Insurance 6d 7a
Saskatchewan Power Corporation 6d 7a
Saskatchewan Telecommunications Holding Corporation 6d 7a
SaskEnergy Incorporated 6d 7a
Workers’ Compensation Board (Saskatchewan) 6d 7b

1	Organization established during 2010-11.

2	Organization wound up during 2010-11.

3	Organization determined to be part of the government reporting entity during 2010-11.

4	Organization merged with the Board of Education of the Holy Family Roman Catholic Separate School Division No. 140 during 2010-11.

5	Organization’s name changed from Saskatchewan Health Information Network during 2010-11.

6	The year-ends of certain organizations differ from March 31, 2011: a June 2010; b July 2010; c August 2010; d December 2010.

7	For segment disclosure (schedule 17) certain organizations are classified into categories other than Treasury Board Organizations as follows: a CIC Board Organizations; b Not-for-Profit Insurance Organizations.

Government of Saskatchewan – 2010-11 Public Accounts 115

Supplementary Information (unaudited)

Supplementary Information

Growth and Financial Security Fund
Schedule of Transfers and Accumulated Balance
For the Year Ended March 31, 2011
(thousands of dollars)

	2011					2010
	Budget			Actual		Actual

Balance, beginning of year		958,299			958,299		1,215,094
Transfer from the General Revenue Fund		-			47,669		83,853
Transfer to the General Revenue Fund		(194,186	)		-		(340,648	)
Balance, End of Year		764,113			1,005,968		958,299

The Growth and Financial Security Fund (GFSF) was established May 14, 2008, by The Growth and Financial Security Act.

The purposes of the GFSF are:

•	to assist in the achievement of the Province’s long-term objectives by providing for financial security of the Government from year to year; and

•	to provide a source of funds that are available for programs that have been identified as promoting or enhancing the economic development of the Province.

In accordance with The Growth and Financial Security Act, the GFSF receives 50 per cent of the pre-transfer surplus of the General Revenue Fund (GRF) in any fiscal year. This legislation also permits Treasury Board to approve other transfers between the GFSF and the GRF.

Transfers to the GFSF from the GRF are statutory disbursements. Amounts transferred to the GRF from the GFSF are available for use subsequent to receiving required approval from the Legislative Assembly.

In accordance with The Growth and Financial Security Act, all earnings on the GFSF’s investments are credited to the GRF. For 2010-11, this amount was $29.2 million (2010 - $51.1 million).

The GFSF’s assets have been invested in fixed income securities as follows:

	2011		2010
Long-term investments in securities of:
Other provincial governments (coupon interest range 0.0% to 5.5%; maturing in 1.2 to 5.7 years)		409,839		343,714
Corporations (coupon interest range 2.9% to 4.8%; maturing in 3.1 to 5.2 years)		189,598		143,599
Government of Canada (coupon interest range 2.5% to 2.8%; maturing in 3.7 to 5.2 years)		123,325		20,974
Government of Saskatchewan (coupon interest 0.0%; maturing in 3.0 years)		45,211		43,732
Cash, accounts receivable, short-term investments and accrued interest		237,995		406,280
Total Growth and Financial Security Fund		1,005,968		958,299

The portfolio investments noted above are accounted for using the cost method. Under this approach, the GFSF earned a return of 3.2 per cent (2010 - 4.3 per cent).

The market value of the GFSF’s net assets at March 31, 2011 is $1,004.4 million (2010 - $957.6 million).

Government of Saskatchewan – 2010-11 Public Accounts 119

Supplementary Information

General Revenue Fund - Public Issue Debentures

As at March 31, 2011

(dollars)

Interest

Equity of

Sinking Fund

Date of

Rate

Interest

Purpose of

Amount

Total Issue

Applicable

Contribution

Issue

Maturity

Payments

Currency

Issue

Outstanding

Sinking Fund

2010-11

July 15/06

July 15/11

4.00

Annual

Can.

GRF

49,048,500

–

(Savings Bond; Redeemable annually at the option of the holder or any time

on the death of the holder; The bonds pay a minimum interest rate of 4.00%;

The Province reserves the right to increase the interest rate after

July 14, 2007; Payable at any Saskatchewan branch of a chartered bank,

trust company and the Credit Union Central of Saskatchewan)

June 10/03

Sept. 5/11

4.75-5.80

Semiannual

Can.

GRF

104,500,000

68,072,759

1,045,000

(Canadian medium term note; Extendible at the option of the holder to

September 5, 2033; This note pays interest at 4.75% to September 5,

2011, and 5.80% thereafter; This book-based note is held in the

Canadian Depository for Securities)

July 15/07

July 15/12

4.20

Annual

Can.

GRF

176,890,700

–

(Savings Bond; Redeemable annually at the option of the holder or any time

on the death of the holder; The bonds pay a minimum interest rate of 4.20%;

The Province reserves the right to increase the interest rate after

July 14, 2008; Payable at any Saskatchewan branch of a chartered bank,

trust company and the Credit Union Central of Saskatchewan)

Sept. 20/02

Dec. 3/12

5.25

Semiannual

Can.

GRF

300,000,000

SaskEnergy

50,000,000

350,000,000

306,353,921

3,500,000

(Non-callable; This book-based note is held in the Canadian Depository

for Securities)

Feb. 2/93

Feb. 1/13

7.613

Semiannual

Can.

GRF

568,212,000

556,311,932

5,682,120

(The original 8% 400,000,000 U.S. dollar debentures have been swapped

into Canadian dollars at an interest rate of 7.613%; Non-callable; Payable

in New York)

June 17/03

June 17/13

4.75

Annual

Can.

GRF

195,000,000

MFC

5,000,000

200,000,000

104,299,374

2,000,000

(Euro medium term note; Non-callable; Payable in London)

July 20/93

July 15/13

7.375

Semiannual

U.S.

GRF

50,000,000

52,491,655

–

7.809

Can.

Sask Power

97,147,500

7.753

Can.

GRF

228,639,500

375,787,000

54,710,655

3,907,900

(175,000,000 U.S. dollars of the GRF's 225,000,000 U.S. dollar share of the

7.375% debenture issue has been swapped into Canadian dollars at an

interest rate of 7.753%. Interest payments on the remaining 50,000,000 U.S.

dollars have been swapped into Canadian dollars at an interest rate of 7.912%;

Sask Power's 75,000,000 U.S. dollar share of the 7.375% debenture issue

has been swapped into Canadian dollars at an interest rate of 7.809%;

Non-callable; Payable in New York)

July 15/08

July 15/13

2.50

Annual

Can.

GRF

2,930,900

–

(Savings Bond; Redeemable annually at the option of the holder or any time

on the death of the holder; The bonds pay a minimum interest rate of 2.50%;

The Province reserves the right to increase the interest rate after

July 14, 2009; Payable at any Saskatchewan branch of a chartered bank,

trust company and the Credit Union Central of Saskatchewan)

Sept. 30/03

Dec. 3/13

4.90

Semiannual

Can.

GRF

150,000,000

SaskEnergy

50,000,000

200,000,000

17,028,636

2,000,000

(Non-callable; This book-based note is held in the Canadian Depository

for Securities)

March 14/91

April 10/14

10.25

Semiannual

Can.

GRF

583,916,000

238,429,035

5,839,160

(Non-callable; Payable at any Canadian branch of the Royal Bank of

Canada)

June 22/04

June 3/14

5.25

Semiannual

Can.

GRF

250,000,000

SaskEnergy

50,000,000

300,000,000

21,850,563

3,000,000

(Non-callable; This book-based note is held in the Canadian Depository

for Securities)

120 Government of Saskatchewan – 2010-11 Public Accounts

Supplementary Information

General Revenue Fund - Public Issue Debentures (continued)

Interest

Equity of

Sinking Fund

Date of

Rate

Interest

Purpose of

Amount

Total Issue

Applicable

Contribution

Issue

Maturity

Payments

Currency

Issue

Outstanding

Sinking Fund

2010-11

July 15/09

July 15/14

1.00

Annual

Can

GRF

1,926,100

–

(Savings Bonds; Redeemable annually at the option of the holder or any time

on the death of the holder; The bonds pay a minimum interest of 1.00%;

The Province reserves the right to increase the interest rate after July 14,

2010; Payable at any Saskatchewan branch of a chartered bank, trust

company and the Credit Union Central of Saskatchewan)

June 3/05

Dec. 3/15

4.25

Semiannual

Can.

GRF

145,000,000

SaskEnergy

50,000,000

MFC

5,000,000

200,000,000

14,106,375

2,000,000

(Non-callable; This book-based note is held in the Canadian Depository

for Securities)

Nov.15/05

Jan. 15/16

4.305

Semiannual

Can.

GRF

274,654,700

15,633,550

2,746,575

(The original 2.125% 300,000,000 Swiss Franc debentures have been

swapped into Canadian dollars at an interest rate of 4.305%; Non-callable;

Payable in Zurich)

Aug. 23/06

Aug. 23/16

4.50

Semiannual

Can.

GRF

255,000,000

SaskEnergy

45,000,000

300,000,000

13,679,131

3,000,000

(Non-callable; This book-based note is held in the Canadian Depository

for Securities)

Sept. 17/96

Sept. 17/16

8.09

Semiannual

Can.

GRF

9,143,000

–

(Canadian medium term serial note; Payable in annual instalments;

Non-callable; Payable in Regina)

Sept. 5/07

Sept. 5/17

4.65

Semiannual

Can.

GRF

160,000,000

SaskEnergy

40,000,000

200,000,000

6,611,041

2,000,000

(Non-callable; This book-based note is held in the Canadian Depository

for Securities)

June 17/04

June 17/19

5.50

Semiannual

Can.

GRF

33,000,000

2,679,038

330,000

(Canadian medium term note; After June 17, 2014, this note pays interest

at the three month bankers' acceptance rate less 0.245%; Non-callable;

This book-based note is held in the Canadian Depository for Securities)

Aug. 3/04

June 17/19

5.50

Semiannual

Can.

GRF

26,000,000

18,990,956

260,000

(Canadian medium term note; Non-callable; This book-based note is held

in the Canadian Depository for Securities)

July 28/10

July 28/20

3.90

Semiannual

Can.

GRF

150,000,000

SaskTel

150,000,000

300,000,000

–

(Non-callable; This book-based note is held in the Canadian Depository

for Securities)

Dec. 20/90

Dec. 15/20

9.375

Semiannual

U.S.

GRF

45,000,000

34,294,204

–

9.653

Can.

GRF

65,972,500

10.08

Can.

SaskTel

126,600,000

9.965

Can.

Sask Power

128,797,500

366,370,000

77,365,280

3,753,500

(55,000,000 U.S. dollars of the GRF's 100,000,000 U.S. dollar share of the

9.375% debenture issue has been swapped into Canadian dollars at an

interest rate of 9.653%. Interest payments on the remaining 45,000,000 U.S.

dollars have been swapped into Canadian dollars at an interest rate of

9.653%. SaskTel's 100,000,000 U.S. dollar share of the 9.375% debenture

issue has been swapped into Canadian dollars at an interest rate of 10.08%;

Sask Power's 100,000,000 U.S. dollar share of the 9.375% debenture issue

has been swapped into Canadian dollars at an interest rate of 9.965%;

Non-callable; Payable in New York)

Feb. 26/91

Feb. 15/21

9.254

Semiannual

Can.

GRF

147,600,000

17,179,231

2,460,000

9.125

U.S.

GRF

80,000,000

227,600,000

67,557,425

–

(120,000,000 U.S. dollars of this debenture issue has been swapped into

Canadian dollars at an interest rate of 9.254%. Interest payments on the

remaining 80,000,000 U.S. dollars have been swapped into Canadian

dollars at an interest rate of 9.254%; Non-callable; Payable in New York)

Government of Saskatchewan – 2010-11 Public Accounts 121

Supplementary Information

General Revenue Fund - Public Issue Debentures (continued)

Interest

Equity of

Sinking Fund

Date of

Rate

Interest

Purpose of

Amount

Total Issue

Applicable

Contribution

Issue

Maturity

Payments

Currency

Issue

Outstanding

Sinking Fund

2010-11

Feb. 4/92

Feb. 4/22

9.60

Semiannual

Can.

Sask Power

240,000,000

GRF

15,000,000

255,000,000

92,640,591

2,550,000

(Non-callable; Payable at any Canadian branch of the Royal Bank of

Canada)

July 21/92

July 15/22

8.50

Semiannual

U.S.

GRF

100,000,000

82,354,969

1,054,700

8.942

Can.

Sask Power

256,320,000

356,320,000

28,397,933

2,563,200

(Interest payments on the GRF's 100,000,000 U.S. dollar share of the 8.50%

debenture issue have been swapped into Canadian dollars at an interest

rate of 8.497%; Sask Power's 200,000,000 U.S. dollar share of the 8.50%

debenture issue has been swapped into Canadian dollars at an interest

rate of 8.942%; Non-callable; Payable in New York)

May 30/95

May 30/25

8.75

Semiannual

Can.

Sask Power

100,000,000

SaskEnergy

75,000,000

175,000,000

45,190,639

1,750,000

(Non-callable; Payable at any Canadian branch of the Royal Bank of

Canada)

Dec. 4/98

March 5/29

5.75

Semiannual

Can.

GRF

250,000,000

SaskTel

75,000,000

SaskEnergy

25,000,000

350,000,000

55,074,793

3,500,000

(Non-callable; This book-based note is held in the Canadian Depository

for Securities)

March 24/99

March 5/29

5.60

Semiannual

Can.

SaskTel

35,000,000

SaskEnergy

25,000,000

60,000,000

3,384,501

600,000

(Canadian medium term note; Non-callable; This book-based note is held in the

Canadian Depository for Securities)

Jan. 25/00

Jan. 25/30

6.35

Semiannual

Can.

GRF

199,995,000

29,679,334

2,000,000

(Canadian medium term note; This book-based note is held in the Canadian

Depository for Securities)

Feb. 17/00

Jan. 25/30

6.25

Semiannual

Can.

GRF

25,000,000

3,828,517

250,000

(Canadian medium term note; Non-callable; This book-based note is held

in the Canadian Depository for Securities)

Dec. 10/01

Sept. 5/31

6.40

Semiannual

Can.

GRF

190,000,000

Sask Power

300,000,000

SaskEnergy

60,000,000

550,000,000

63,998,048

5,500,000

(Non-callable; This book-based note is held in the Canadian Depository

for Securities)

Feb. 13/02

Feb. 13/32

6.30

Semiannual

Can.

GRF

29,954,000

7,031,397

299,540

(Canadian medium term note; Non-callable; This book-based note is held

in the Canadian Depository for Securities)

May 12/03

Sept. 5/33

5.80

Semiannual

Can.

GRF

150,000,000

Sask Power

300,000,000

450,000,000

39,004,492

4,500,000

(Non-callable; This book-based note is held in the Canadian Depository

for Securities)

Aug. 12/04

Sept. 5/35

5.60

Semiannual

Can.

GRF

200,000,000

Sask Power

200,000,000

400,000,000

28,691,320

4,000,000

(Non-callable; This book-based note is held in the Canadian Depository

for Securities)

Feb. 15/05

March 5/37

5.00

Semiannual

Can.

SaskEnergy

25,000,000

Sask Power

400,000,000

425,000,000

28,230,926

4,250,000

(Non-callable; This book-based note is held in the Canadian Depository

for Securities)

122 Government of Saskatchewan – 2010-11 Public Accounts

Supplementary Information

General Revenue Fund - Public Issue Debentures (continued)

Interest

Equity of

Sinking Fund

Date of

Rate

Interest

Purpose of

Amount

Total Issue

Applicable

Contribution

Issue

Maturity

Payments

Currency

Issue

Outstanding

Sinking Fund

2010-11

May 26/06

June 1/40

4.75

Semiannual

Can.

GRF

325,000,000

SaskEnergy

75,000,000

Sask Power

650,000,000

1,050,000,000

28,030,706

8,500,000

(This issue was reopened on September 8, 2010 and an additional

$200,000,000 of debentures were sold; Non-callable; This book-based note

is held in the Canadian Depository for Securities)

Sept. 16/02

Sept. 5/42

5.70

Semiannual

Can.

GRF

50,000,000

5,160,903

500,000

(Canadian medium term note; Non-callable; This book-based note is held

in the Canadian Depository for Securities)

Adjustment

(7,755,000

(6,674,891

–

Total

9,218,492,900

2,221,668,939

85,341,695

*	Adjustment to reflect conversion of debentures and related sinking funds quoted in foreign currencies to Canadian dollars using the exchange rate in effect at March 31, 2011 (U.S. $0.9718)

**	Sinking fund contributions to U.S. dollar sinking funds are made in U.S. dollars. Contributions are shown at the cost in Canadian dollars to purchase U.S. dollars equal to the contribution amount.

Government of Saskatchewan – 2010-11 Public Accounts 123

Supplementary Information

General Revenue Fund - Debentures Issued to the Minister of Finance of

Canada

As at March 31, 2011

(dollars)

		Interest	Amount
Date of Issue	Date of Maturity	Rate %	Outstanding

Canada Pension Plan Investment Fund*
April 1991 - March 1992	April 2011 - March 2012	9.92	90,664,000
April 1992 - March 1993	April 2012 - March 2013	9.37	62,705,000
April 1999 - March 2000	April 2019 - March 2020	6.34	46,335,000
April 2000 - March 2001	April 2020 - March 2021	6.54	75,553,000
April 2002 - March 2003	April 2022 - March 2023	5.89	41,182,000
April 2003 - March 2004	April 2023 - March 2024	5.48	40,189,000
April 2005 - March 2006	April 2015 - March 2036	4.63	20,654,000
April 2006 - March 2007	April 2011 - March 2027	4.58	99,655,000
April 2007 - March 2008	April 2017 - March 2028	4.65	35,491,000
April 2008 - March 2009	April 2013 - March 2039	4.49	40,484,000
April 2009 - March 2010	April 2014 - March 2020	3.49	101,867,000
April 2010 - March 2011	April 2015 - March 2041	4.10	90,318,000
Total			745,097,000

The average effective interest rate on debentures issued to the Minister of Finance of Canada is 5.85%.

Canada Pension Plan debentures have a 5-30 year maturity and are callable in whole or in part before maturity at the option of the Minister of Finance of Saskatchewan. Canada Pension Plan debentures are subject in part to annual sinking funds; equity in sinking funds at March 31, 2011, $210,151,667.

124 Government of Saskatchewan – 2010-11 Public Accounts

Supplementary Information

Glossary of Terms

Accrual Accounting

The method used to prepare the financial statements included in Volume 1 of the Public Accounts. Accrual accounting recognizes financial transactions at the time they occur, regardless of whether any cash is received or paid.

Accumulated Surplus/Deficit

One of the two measures of a government’s financial position (see net debt). The accumulated surplus/deficit is the amount by which revenue has exceeded expense/expense has exceeded revenue from the beginning of incorporation (1905) plus any adjustments that were charged directly to the accumulated surplus/deficit. It is calculated as the difference between assets and liabilities.

Budget

The amount presented in the Estimates and authorized by the Legislative Assembly.

Capital Transfer

A grant provided to a third party such as a university or municipality to acquire or develop capital assets.

Consolidation

The method used to account for government service organizations in the Summary financial statements in which the accounts are adjusted to the basis of accounting described in note 1 of the Summary financial statements and then combined. Inter-organization balances and transactions are eliminated.

Debenture

A certificate of indebtedness where the issuer promises to pay interest and repay principal by a maturity date. It is usually unsecured, meaning there are no liens or pledges on any specific assets.

Debt

Terms used when describing debt include:

Government general debt is debt issued by the General Revenue Fund (GRF) to fund Government spending.

Crown corporation general debt is debt issued by the GRF and subsequently loaned to a Crown corporation.

Government business enterprise specific debt is debt issued by the GRF specifically on behalf of a government business enterprise where the government expects to realize the receivable from the government business enterprise and settle the external debt simultaneously.

Gross debt is borrowings through the issuance of debt instruments such as promissory notes and debentures.

Sinking funds are funds set aside for the repayment of debt.

Public debt is gross debt net of sinking funds.

General debt is public debt net of loans to Crown corporations for government business enterprise specific debt.

Guaranteed debt is the debt of others that the Government has agreed to repay if others default.

Total debt is public debt plus guaranteed debt.

Debt Retirement Fund

The fund, established pursuant to The Growth and Financial Security Act, to account for the surpluses of the GRF commencing April 1, 2008.

Derivative

A financial contract that derives its value from other underlying variables such as interest rates, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, and credit rates. It does not require an initial investment and is settled at a future date.

Financial Asset

An asset that can be used to discharge existing liabilities or finance future operations and is not for consumption in the normal course of operations.

Government of Saskatchewan – 2010-11 Public Accounts 125

Supplementary Information

Glossary of Terms (continued)

Financial Instrument

Any contract that gives rise to a financial asset of one party and a financial liability or equity instrument of another party.

Financial Liability

Any liability that is a contractual obligation to deliver a financial asset to another party, or to exchange financial instruments with another party under conditions that are potentially unfavourable to the entity.

General Revenue Fund (GRF)

The fund into which all revenues are paid, unless otherwise provided for by legislation, and from which all expenditures are appropriated by the Legislative Assembly.

Government Business Enterprise

A self-sufficient government organization that has the financial and operating authority to sell goods and services to individuals and organizations outside the government reporting entity as its principal activity. Government business enterprises are recorded in the Summary financial statements using the modified equity method.

Government Partnership

An investment by the Government where there is a contractual arrangement between the Government and one or more partners outside the government reporting entity and where the partners share, on an equitable basis, the risks and benefits of the partnership. Government partnerships are proportionately consolidated in the Summary financial statements.

Government Service Organization

An organization that is controlled by the Government, except those designated as government business enterprises. Government service organizations are consolidated in the Summary financial statements after adjustment to a basis consistent with the accounting policies described in note 1 of the Summary financial statements.

Gross Domestic Product (GDP)

The standard measure of the overall size of the economy, the value of all goods and services produced during a period.

Growth and Financial Security Fund

The fund established in May of 2008 to assist in the achievement of the Government’s long-term objectives by providing for financial security of the Government from year to year and to provide a source of funds that are to be available for appropriation to be used for government programs identified as promoting or enhancing the economic development of Saskatchewan.

Hedging

A strategy to minimize the risk of loss on an asset (or liability) from market fluctuations such as interest rate or foreign exchange rate changes. This is accomplished by entering into offsetting commitments with the expectation that a future change in the value of the hedging instrument will offset the change in the value of the asset (or liability).

Modified Equity

The method by which government business enterprises are accounted for in the Summary financial statements. The Government’s investment, which is originally recorded at cost, is adjusted annually to include the net earnings/losses and other net equity changes of the enterprise/partnership without adjustment to conform with the accounting policies described in note 1 of the Summary financial statements. Inter-organizational balances and transactions are disclosed but not eliminated.

Net Debt

One of the two measures of a government’s financial position (see accumulated surplus/deficit). Net debt is calculated as the difference between financial assets and liabilities.

Non-financial Asset

An asset that is acquired, constructed or developed and does not normally provide resources to discharge existing liabilities.

126 Government of Saskatchewan – 2010-11 Public Accounts

Supplementary Information

Glossary of Terms (continued)

Other Comprehensive Income/Loss (OCI)

OCI includes certain unrealized gains and losses of government business enterprises that are excluded from net income but recognized as a change in net debt and accumulated surplus/deficit during the period.

Pension Liability

An actuarial estimate of discounted future payments to be made to retirees under government pension plans, net of plan assets.

Premium/Discount

The amount by which the selling price of a security exceeds/is less than its par or face value.

Segment

A distinguishable activity or group of activities of a government for which it is appropriate to separately report financial information to help users of the financial statements identify the resources allocated to support the major activities of a government.

Summary Financial Statements (SFS)

The statements prepared to account for the full nature and extent of the financial activities of the Government. The SFS includes the financial activities of organizations controlled by the Government. These organizations are segregated into two classifications, government service organizations and government business enterprises, and are collectively referred to as the government reporting entity. Trusts administered by the Government are excluded from the government reporting entity.

Tangible Capital Asset

An asset with physical substance held by the Government that has an economic life extending beyond a year, is to be used on a continuing basis and is not for sale in the ordinary course of operations.

Transfer

A transfer of money from a government to an individual, an organization or another government for which the government making the transfer does not: receive any goods or services directly in return, as would occur in a purchase/sale transaction; expect to be repaid in the future, as would be expected in a loan; or expect a financial return, as would be expected in an investment. Major types of transfers include entitlements, transfers under shared cost agreements and grants.

Government of Saskatchewan – 2010-11 Public Accounts 127

Saskatchewan Province Of 18-K/AAnnual report (foreign governments) (amended)