Saskatchewan Province Of 18K Annual report (foreign governments) | SEC 20 Dec 12

Exhibit d

Province of Saskatchewan

Current Description

December 2012

[MAP]

TABLE OF CONTENTS

	Page
Province of Saskatchewan		1
Overview of the Economy		3
Finances of the Government		17
General Revenue Fund Supplementary Financial Information		33
Detail of General Revenue Fund Debt		51
Crown Corporations		54
Government of Saskatchewan Summary Financial Statements (Volume 1 of the Public Accounts)		Exhibit E
Sources of Information		62

In this document, unless otherwise specified or the context otherwise requires, all dollar amounts are expressed in Canadian dollars. On September 28, 2012, the noon nominal rate for Canadian dollars ($), as reported by the Bank of Canada, was $0.9837 = 1.00 United States dollar (U.S. $).

Tonnes as used in this document refers to metric tons. One tonne is equivalent to 1.102311 short tons.

In this document, the financial transactions of the general fund of the Government are recorded under the General Revenue Fund. (Refer to page 17 for further information.)

The Government uses accrual accounting. The accrual accounting method recognizes financial transactions at the time they occur, regardless of whether any cash is received or paid. This method of accounting provides a complete picture of the total financial obligations resulting from decisions made during the year. The General Revenue Fund follows the accrual method except for defined benefit pension plan costs. During 2008-09, the Government made a change in accounting policy to comply with the recommendations of the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants for long-term debt. On the Statement of Financial Position, loans to Crown corporations and public debt (gross debt net of sinking funds) are now presented net of government business enterprise specific debt. Additionally, reimbursements of interest from Crown corporation general debt are no longer netted against debt servicing costs on the Statement of Operations. Prior to this change in accounting policy, public debt was presented on a gross basis on the Statement of Financial Position, and all reimbursements of interest from Crown corporations’ debt were netted against debt servicing costs. The 2007-08 amounts have been restated for this change in accounting policy.

During 2008-09, the Government determined that agricultural land held for resale, previously presented as a financial asset, is more appropriately classified as tangible capital assets because this land is not expected to be sold within the next year. This change has been applied retroactively with restatement of the 2007-08 amounts.

During 2008-09, the Government reclassified certain revenue categories, with restatement of 2007-08 amounts:

	●	Corporation capital tax has been split into two components. Resource surcharge has been moved to non-renewable resources and the remaining component of corporation capital tax has been included with other taxes;
	●	Liquor consumption tax has moved from sales tax to other taxes and sales tax has been renamed provincial sales tax; and
	●	Crown land sales previously reported in oil revenues has been broken out.

This document contains forward-looking statements which may be identified by their use of words like “plans,” “expected,” “will,” “project,” “estimated,” “forecast” or other words of similar meaning. All statements that address expectations or projections about the future are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. It cannot be guaranteed that these assumptions and expectations are accurate or will be realized.

The Canadian Dollar

Canada maintains a floating exchange rate for the Canadian dollar to permit the rate to be determined by market forces without intervention except as required to maintain orderly conditions.

Recent high and low exchange rates for the Canadian dollar in terms of United States cents are as follows:

	2007	2008	2009	2010	2011	2012*

High	109.05	102.89	97.16	100.54	105.83	102.99
Low	84.37	77.11	76.92	92.78	94.30	95.99

Source: Bank of Canada - noon rate.
* First nine months only.

PROVINCE OF SASKATCHEWAN

Summary Economic and Financial Statistics

The following information is qualified in its entirety by the more detailed information contained in this document. See also "General Revenue Fund Supplementary Financial Information - Government of the Province of Saskatchewan, General Revenue Fund Statement of Financial Position” commencing on page 34 for a discussion of the Provincial Auditor's report accompanying the General Revenue Fund's financial statements as at March 31, 2012, and for the year then ended.

												Compound
	Calendar Year Ended December 31											Annual
												Growth Rate
		2007		2008		2009		2010		2011			2007-2011
						(Millions)
Economy
Gross Domestic Product at Current
Market Prices *		$	51,080	$	66,950	$	58,837	$	64,167		n/a		9.0	%
Farm Cash Receipts		$	7,779	$	9,413	$	9,225	$	9,142	$	10,956		8.9
Mineral Sales		$	14,438	$	23,733	$	14,448	$	17,963		n/a		8.8
Manufacturing Shipments		$	10,423	$	13,181	$	11,364	$	10,911	$	12,577		4.8
Exports *		$	35,623	$	48,714	$	39,059	$	43,174		n/a		8.7
Personal Income *		$	32,322	$	37,273	$	37,645	$	39,354		n/a		7.5
Population at July 1 (Thousands)			1,000		1,014		1,029		1,044		1,058		1.4
Unemployment Rate			4.2%		4.1%		4.8%		5.2%		5.0%		n/a
Change in Consumer Price Index			2.9%		3.2%		1.1%		1.4%		2.8%		n/a

1 2002 = 100

n.a. = not applicable

* = compound annual growth rate from 2006-2010

Source: Saskatchewan Bureau of Statistics, Statistics Canada

	Fiscal Year Ended March 31
																	Estimate
		2008			2009			2010			2011			2012			2013
	(Millions)
Government Finances - General Revenue Fund
Budgetary surplus (deficit) 1		$	641		$	2,389		$	425		$	48		$	352		$	47
Add (deduct) non-cash items
Amortization of foreign exchange (gain) loss			2			5			(1	)		0			2			(1	)
Amortization of Capital Assets			148			167			146			172			167			192
(Gain) Loss on loans and investments			9			1			3			0			(1	)		(15	)
Net change in non-cash operating activities			228			(115	)		227			(383	)		(317	)		182
Earnings retained in sinking funds			(46	)		(79	)		(159	)		(149	)		(166	)		(95	)
Capital Activities
Cash (used for) Acquisition of capital assets			(278	)		(342	)		(348	)		(370	)		(398	)		(504	)
Investing Activities
Cash provided by (used for) investing activities			(283	)		(1,758	)		546			780			94			67
Cash Provided (Required)		$	421		$	268		$	839		$	98		$	(267	)	$	(127	)

1 For information concerning the adverse effect on the reported budgetary surplus (deficit) of certain adjustments that are required in the opinion of the Provincial Auditor, see Notes 1-9 to the Government of the Province of Saskatchewan, General Revenue Fund Statement of Financial Position for the five years ended March 31, 2012, under “General Revenue Fund Supplementary Financial Information,” commencing on page 34.

	Fiscal Year Ended March 31
	2008			2009			2010			2011			2012
							(Millions)
Debt - General Revenue Fund
Gross Debt	$	11,578		$	11,066		$	10,690		$	10,550		$	10,911
Less: Equity in Sinking Funds		(1,359	)		(3,364	)		(2,697	)		(2,432	)		(2,641	)
Guaranteed Debt		25			20			17			35			94
Total General Revenue Fund Debt	$	10,244		$	7,722		$	8,010		$	8,153		$	8,364

In this document statistics for the economy of the Province are set forth on a calendar year basis at current market prices, except as otherwise indicated. Economic statistics for recent years frequently are preliminary estimates, which are subject to adjustment. Financial statistics and information for the Government's General Revenue Fund are set forth on a fiscal year basis of April 1 to March 31 of the following year, unless otherwise noted. Financial statistics and information for provincial Crown corporations are set forth on a fiscal year basis of January 1 to December 31 of the same year, unless otherwise noted. In this document, compound annual growth rates assume the first year as the base and are computed by distributing the aggregate amounts of growth during the period.

iii

PROVINCE OF SASKATCHEWAN

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Introduction

The Province of Saskatchewan (Saskatchewan or the Province) was established as a province of Canada in 1905. Saskatchewan is centrally located in Western Canada and is bordered by the provinces of Manitoba to the east and Alberta to the west. The Province shares its 650 kilometre southern border with the American states of North Dakota and Montana and its 450 kilometre northern border with the Northwest Territories of Canada. With a 1,250 kilometre distance from north to south, Saskatchewan covers an area of 652,330 square kilometres.

The sparsely populated northern third of the Province is part of Canada's Precambrian Shield and consists of forests, rivers and thousands of fresh water lakes. A sizeable commercial forest region is located across the entire central part of Saskatchewan. The southern half of the Province is part of the great continental plain of North America, consisting of a mixed agricultural and parkland area merging southward into open plains, a grain-growing region where the majority of the Province's population resides. About one-half of all of Canada's cultivated farm land is located in Saskatchewan.

The population of Saskatchewan was approximately 1,079,958 on July 1, 2012, compared with approximately 1,057,804 on July 1, 2011 and 996,801 on July 1, 2002. The Province's two largest urban areas are the cities of Regina, the capital of Saskatchewan, with a population of approximately 218,690 on July 1, 2011, and Saskatoon, with a population of approximately 271,955 as of the same date.

The climate of Saskatchewan is generally dry with temperatures varying markedly between very distinct seasons. The following table sets forth statistics on Saskatchewan's population, area and climate.

Saskatchewan Statistics

Population				Area
	1,079,958 (July 1, 2012)				Land:
					●	570,700 square kilometres (220,350 square miles)
Major Urban Centres
	Regina				Fresh Water:
	●	Capital of Saskatchewan			●	81,630 square kilometres
	●	218,690 (July 1, 2011)*				(31,520 square miles)
	Saskatoon				Total:
	●	Centre for Saskatchewan's resource-based and advanced technology industries			●	652,330 square kilometres (251,870 square miles)
	●	271,955 (July 1, 2011)*			Farm Land:
					●	268,655 square kilometres (103,730 square miles)
Population Density					Cultivated Farm Land:
	1 person per 0.66 square kilometre (0.25 per square mile)				●	202,470 square kilometres (78,170 square miles)
					Commercial Forests:
Mean Temperatures Range (Regina)					●	126,300 square kilometres (48,760 square miles)
	January		-11to -22 degrees Celsius
	July		26to 12 degrees Celsius

Mean Precipitation (Regina)
	January		15millimetres
	July		59millimetres
	Year		364millimetres

* Post-census adjusted data for 2011 for Regina and Saskatoon are not yet available.

Sources: Saskatchewan Bureau of Statistics, Statistics Canada.

Constitutional Framework of Canada

Canada consists of a federation of ten provinces with a constitutional division of powers between the federal and provincial governments. Canada was established by the Constitution Act, 1867, an Act of the Parliament of the United Kingdom, and by later enactments including the Constitution Act, 1982, which transferred jurisdiction over the Constitution of Canada (the Constitution) from the United Kingdom to Canada.

Various constitutional issues have been under discussion in Canada for a number of years. On August 20, 1998, in response to a reference from the Federal government, the Supreme Court of Canada ruled that under the Constitution of Canada and international law, Quebec may not secede unilaterally from Canada, but that if the people of Quebec voted to secede by a clear majority vote on a clear question, the other provinces and the Federal Government would be obliged to enter negotiations with Quebec with respect to secession, such negotiations to be guided by constitutional principles, including federalism, democracy, constitutionalism and the rule of law, and the protection of minorities.

Under the Constitution, each provincial Legislature has exclusive authority to borrow money on the sole credit of that province and the authority to raise revenue for provincial purposes through direct taxation within its territorial limits. Legislatures can also raise revenue through taxation in respect of non-renewable natural resources, forestry resources and sites and facilities for electricity production and generation. Each province owns minerals and other resources on its provincial Crown lands and may own sub-surface resources on its other lands. Each province has the right to levy royalties on all lands and minerals which it owns. Each province has the legislative authority to regulate the exploration for and development, conservation and management of non-renewable natural resources, forestry resources and electricity generation. Each province also has legislative authority in the areas of education, health, social services, property and civil rights, natural resources, municipal institutions and generally all matters of a purely local or private nature.

The Parliament of Canada is empowered to borrow money and to raise revenue by any mode or system of taxation. Parliament has legislative authority over, among other things, the federal public debt and federal property, the regulation of trade and commerce, currency and coinage, banks and banking, bankruptcy and insolvency, navigation and shipping, foreign affairs, defence, postal service and unemployment insurance. It also has authority over matters not assigned to the provincial legislatures.

Provincial Government

The executive power in the Province of Saskatchewan is vested in the Lieutenant Governor acting upon the advice of the Executive Council, which is responsible to the Legislative Assembly. The Lieutenant Governor is appointed by the Governor General of Canada in Council and the Governor General in turn is appointed by a commission under the Great Seal of Canada. The Executive Council, which includes the Premier and the Ministers of Ministries of the Provincial Government, is appointed by the Lieutenant Governor on the nomination of the leader of the political party which forms the Government. Members of the Executive Council hold seats in the Legislative Assembly.

Saskatchewan's Legislative Assembly has 58 seats and is elected for a term of five years, subject to earlier dissolution by the Lieutenant Governor acting in accordance with constitutional principles. The Legislative Assembly is usually dissolved by the Lieutenant Governor on the recommendation of the Premier. The most recent Provincial election was held on November 7, 2011, and resulted in a majority for the Saskatchewan Party as the Government of Saskatchewan. The representation in the Legislative Assembly at November 30, 2011 was as follows: Saskatchewan Party, 49 seats; and, New Democratic Party, 9 seats.

OVERVIEW OF THE ECONOMY

Introduction

Saskatchewan has a modern, open and diversified economy. Approximately two-thirds of the total value of all goods and services produced in the Province are exported. Major exports include grains, oilseeds, crude oil, potash, natural gas, uranium and manufactured goods. While many of the goods and service producing industries are directly or indirectly related to agriculture and natural resources, the Provincial economy continues to diversify into information age activities such as high technology, bio-technology and financial and other services. The Province’s abundance of renewable and non-renewable resources has made it the largest producer of wheat, second largest producer of crude oil and third largest natural gas producer in Canada. Saskatchewan is also one of the world’s leading suppliers of potash and uranium.

Saskatchewan’s economy grew at an annual real rate of 4.2 percent in 2010 largely due to higher crop and potash production. Canada’s real Gross Domestic Product (GDP) increased by 3.2 per cent in the same year and by 2.4 per cent in 2011. Saskatchewan’s nominal GDP went up by 9.1 per cent in 2010.

Mining is the largest sector among Saskatchewan’s goods-producing industries. The dominant mineral products of the Province include crude oil, potash, natural gas and uranium. The number of oil wells drilled increased by 29.2 per cent and the value of oil sales increased by 19.9 per cent in 2011 because of stronger oil prices. The value of natural gas sales decreased by 21.7 per cent as a result of lower natural gas production in 2011 while the number of gas wells drilled dropped from 98 wells in 2010 to 50 wells in 2011. Potash sales rose by 22.8 per cent in 2011 primarily reflecting strong sales and high prices.

Manufacturing is the second largest sector of Saskatchewan’s goods-producing industries. Saskatchewan’s manufacturing sales increased by 15.3 per cent in 2011.

Agriculture is the third largest sector among Saskatchewan’s goods-producing industries. Saskatchewan farmers harvested 26.0 million tonnes of the major grains and oilseeds in 2011, about 15.0 per cent more than the harvest in 2010.

Saskatchewan farm cash receipts amounted to $10.9 billion in 2011, up 19.8 per cent from 2010. Realized net farm income, which is the income left with farmers after deducting operating expenses and depreciation costs from farm cash receipts, amounted to $2.6 billion.

Retail sales increased by 8.5 per cent in 2011 while wholesale trade rose by 21.8 per cent in the same year. New vehicle sales went up by 7.3 per cent in 2011.

Saskatchewan’s employment level increased by 0.3 per cent or 1,500 jobs in 2011. In Canada, employment increased by 1.6 per cent or 265,210 jobs in the same year.

Saskatchewan’s unemployment rate averaged 5.0 per cent in 2011. The national unemployment rate averaged 7.5 per cent in the same year.

The inflation rate of the Province, as measured by the rate of increase in the Consumer Price Index, was 2.8 per cent in 2011 compared to Canada’s inflation rate of 2.9 per cent.

The following table sets forth a summary of economic indicators for Saskatchewan and for Canada for the five years ended December 31, 2011.

Summary of Economic Indicators
																	Compound
																	Annual
	Calendar Year Ended December 31																Growth Rate
			2007			2008			2009			2010			2011			2007-2011
Gross Domestic Product - Saskatchewan
Current Market Prices (Millions) *		$	51,080		$	66,950		$	58,837		$	64,167			n/a			9.0	%
Annual Rate of Change			12.4	%		31.1	%		(12.1	)%		9.1	%		n/a			n/a
Per Capita *		$	51,067		$	66,031		$	57,161		$	61,461			n/a			7.6	%
Chained 2002 Dollars (Millions) *		$	39,929		$	41,392		$	39,853		$	41,525			n/a			1.6	%
Annual Rate of Change			2.6	%		3.7	%		(3.7	)%		4.2	%		n/a			n/a
Per Capita *		$	39,919		$	40,824		$	38,718		$	39,774			n/a			0.4	%

Gross Domestic Product - Canada
Current Market Prices (Millions)		$	1,529,589		$	1,603,418		$	1,528,985		$	1,624,608		$	1,720,748			3.0	%
Annual Rate of Change			5.5	%		4.8	%		(4.6	)%		6.3	%		5.9	%		n/a
Per Capita		$	46,450		$	48,128		$	45,331		$	47,606		$	49,902			1.8	%
Chained 2002 Dollars (Millions)		$	1,311,260		$	1,320,291		$	1,283,722		$	1,324,993		$	1,356,867			0.9	%
Annual Rate of Change			2.2	%		0.7	%		(2.8	)%		3.2	%		2.4	%		n/a
Per Capita		$	39,820		$	39,626		$	38,059		$	38,826		$	39,349			(0.3	) %

Consumer Price Index 1
(Annual Percentage Change)
Saskatchewan			2.9	%		3.2	%		1.1	%		1.4	%		2.8	%		n/a
Canada			2.1	%		2.4	%		0.3	%		1.8	%		2.9	%		n/a

Population (July 1)(Thousands)
Saskatchewan			1,000			1,014			1,029			1,044			1,058			1.4	%
Canada			32,930			33,319			33,730			34,126			34,483			1.2	%

Unemployment Rate
Saskatchewan			4.2	%		4.1	%		4.8	%		5.2	%		5.0	%		n/a
Canada			6.1	%		6.1	%		8.3	%		8.0	%		7.5	%		n/a

1 2002 = 100

n.a. = not applicable

Sources: Saskatchewan Bureau of Statistics, Statistics Canada

* Data for Saskatchewan's economy in 2011 are not available. Compound annual growth rate was calculated from 2006-2010 only.

Gross Domestic Product

Saskatchewan's real GDP measured in chained 2002 dollars increased at a compound average annual rate of 1.6 per cent in the period from 2006 to 2010. Measured in current market prices, Saskatchewan's GDP grew at a compound average annual rate of 9.0 per cent in the same period. In 2010, Saskatchewan's real GDP increased by 4.2 per cent.

The following table sets forth the composition of the Province's GDP both at current market prices and in chained 2002 dollars for the five years ended December 31, 2010.

Gross Domestic Product

																	Compound
																	Annual
	Year Ended December 31																Growth Rate
		2006			2007			2008			2009			2010			2006-2010
								(Millions)

Gross Domestic Product
Current Market Prices
Personal Expenditure on Goods
and Services		$	23,156		$	25,163		$	27,220		$	28,251		$	29,546		6.3	%
Government Expenditure on Goods
and Services			9,148			9,975			10,684			11,351			11,912		6.8	%
Gross Fixed Capital Formation			10,456			11,936			14,890			15,336			16,495		12.1	%
Value of Physical Change in Inventories:
Non-Farm			1,139			849			(469	)		(1,252	)		(9	)	n/a
Farm Inventories and Grain in
Commercial Channels			(676	)		(646	)		1,605			196			(1,216	)	n/a
Exports of Goods and Services			30,916			35,623			48,714			39,059			43,174		8.7	%
Less: Imports of Goods and Services			28,897			31,586			35,357			34,083			36,018		5.7	%
Residual Error and Adjustment			199			(233	)		(337	)		(21	)		283		n/a
Total		$	45,441		$	51,080		$	66,950		$	58,837		$	64,167		9.0	%

Gross Domestic Product
Chained 2002 Dollars
Personal Expenditure on Goods
and Services		$	21,587		$	22,998		$	24,273		$	24,672		$	25,299		4.4	%
Government Expenditure on Goods
and Services			8,182			8,521			8,728			8,978			9,104		3.0	%
Gross Fixed Capital Formation			10,015			10,755			12,590			12,619			13,483		7.7	%
Value of Physical Change in Inventories:
Non-Farm			968			789			(306	)		(680	)		407		n/a
Farm Inventories and Grain in
Commercial Channels			(616	)		(324	)		1,695			844			(1,315	)	n/a
Exports of Goods and Services			26,007			27,055			27,221			25,500			27,403		1.3	%
Less: Imports of Goods and Services			28,811			31,112			33,432			32,591			34,677		4.7	%
Residual Error and Adjustment			180			(186	)		(210	)		(14	)		185		n/a
Total		$	38,910		$	39,929		$	41,392		$	39,853		$	41,525		1.6	%

n.a. = not applicable

Note: Components may not add due to use of chained fisher price methodology.

Source: Saskatchewan Bureau of Statistics, data for 2011 are not yet available.

Capital Expenditure

Gross fixed capital formation increased at a compound average annual rate of 12.1 per cent over the period from 2006 to 2010.

The following table sets forth information on Saskatchewan's gross fixed capital formation for the five years ended December 31, 2010.

Gross Fixed Capital Formation
												Compound
												Annual
	Year Ended December 31												Growth Rate
		2006		2007		2008		2009		2010			2006-2010
						(Millions)

Agriculture 1		$	558	$	998	$	1,023	$	1,506	$	1,432		26.6	%
Mining 2			4,004		4,392		5,359		4,842		5,409		7.8
Construction			98		154		212		202		210		21.0
Manufacturing 4			436		354		n/a		n/a		n/a		n/a
Transportation & Warehousing 4			456		525		n/a		n/a		n/a		n/a
Information and Cultural Services			375		319		303		396		731		18.2
Utilities			433		430		582		799		961		22.1
Retail and Wholesale Trade			390		391		434		548		489		5.8
Finance and Insurance 3			2,334		2,998		3,398		3,012		3,294		9.0
Commercial Services			228		301		381		287		311		8.1
Institutions 4			462		302		n/a		n/a		n/a		n/a
Public Administration			681		772		915		1,062		1,378		19.3
Total		$	10,456	$	11,936	$	14,890	$	15,336	$	16,495		12.1	%

1	Includes forestry, fishing, trapping and hunting.
2	Includes oil and natural gas extraction, potash, uranium and other minerals.
3	Includes real estate and other services not shown above.
4	Data are not available due to confidential nature of the information.
Components will not add to total.
Source: Saskatchewan Bureau of Statistics, data for 2011 are not yet available.

Exports and Imports

Crude oil, manufactured goods, grains and potash are Saskatchewan's principal exports, accounting for 23.4 per cent, 14.6 per cent, 14.2 per cent and 12.9 per cent, respectively, of total exports in 2010. For the five years ended December 31, 2010, total exports increased by an average of 8.7 per cent per year while imports increased by an average of 5.7 per cent per year.

The following table sets forth details of Saskatchewan's exports and imports at current market prices for the five years ended December 31, 2010.

Trade with the Rest of Canada and Abroad
												Compound
												Annual
	Year Ended December 31												Growth Rate
		2006		2007		2008		2009		2010			2006-2010
						(Millions)

Exports
Grain		$	3,500	$	5,311	$	6,315	$	6,408	$	6,149		15.1	%
Crude Oil			8,131		8,553		13,480		8,978		10,097		5.6
Potash			2,209		3,056		7,379		3,068		5,581		26.1
Manufactured Goods			4,865		5,437		6,733		6,458		6,282		6.6
Other			12,211		13,266		14,807		14,147		15,065		5.4
Total Exports		$	30,916	$	35,623	$	48,714	$	39,059	$	43,174		8.7	%

Imports
Crude Oil		$	1,317	$	1,254	$	1,392	$	2,000	$	2,678		19.4	%
Manufactured Goods			6,037		6,497		7,035		6,554		6,723		2.7
Other			21,543		23,835		26,930		25,529		26,617		5.4
Total Imports		$	28,897	$	31,586	$	35,357	$	34,083	$	36,018		5.7	%

Source: Saskatchewan Bureau of Statistics, 2011 data are not yet available.

Labour Force and Employment

Saskatchewan's unemployment rate remained well below the national unemployment rate in 2011. The national unemployment rate stood at 7.5 per cent in 2011, while Saskatchewan's unemployment rate was 5.0 per cent in the same year.

In the first eight months of 2012, Saskatchewan’s seasonally adjusted unemployment rate has averaged 4.8 per cent, compared to the national average unemployment rate of 7.3 per cent over the same period. Thus far, total employment in the Province has increased by about 9,900 compared with the same period last year.

The following table sets forth selected labour force statistics for Saskatchewan and Canada for the five years ended December 31, 2011.

Labour Force Statistics
							Compound
							Annual
	Year Ended December 31						Growth Rate
		2007	2008	2009	2010	2011	2007-2011
	(Thousands, Except Percentages)

Labour Force
Saskatchewan		527	534	546	553	553	1.3	%
Canada		17,884	18,204	18,329	18,525	18,699	1.1	%

Employed
Saskatchewan		504	513	519	524	526	1.0	%
Canada		16,806	17,087	16,813	17,041	17,306	0.7	%

Unemployed
Saskatchewan		22	22	26	29	28	5.7	%
Canada		1,079	1,116	1,516	1,484	1,393	6.6	%

Unemployment Rate
Saskatchewan		4.2%	4.1%	4.8%	5.2%	5.0%	n/a
Canada		6.1%	6.1%	8.3%	8.0%	7.5%	n/a

Participation Rate
Saskatchewan		69.5%	69.6%	70.0%	69.9%	69.2%	n/a
Canada		67.4%	67.7%	67.1%	67.0%	66.8%	n/a

n.a. = not applicable

Source: Statistics Canada.

Approximately 21,000 net new jobs were created in the Province in the period from 2007 to 2011. Construction, mining and Finance, insurance & real estate were the leaders in terms of job creation during the period in review.

The following table sets forth selected statistics of employment by industry for the Province.

Employment by Industry
							Compound
							Annual
	Year Ended December 31						Growth Rate
		2007	2008	2009	2010	2011	2007-2011
				(Thousands)

Goods-Producing Industries
Agriculture		43	41	43	42	40	(2.3	)%
Mining		22	25	24	26	25	3.2
Construction		32	36	38	40	40	5.4
Manufacturing		31	31	29	31	27	(3.2	)
Subtotal		129	133	135	138	132	0.5

Service Industries
Transportation, Communication,
Utilities and Storage		30	30	30	31	32	1.8
Wholesale and Retail Trade		83	83	80	80	82	(0.1	)
Finance, Insurance and Real Estate		27	28	29	31	31	3.4
Business and Community Services		208	209	215	216	219	1.3
Public Administration		28	29	31	29	30	2.0
Subtotal		376	380	385	386	394	1.2
Total		504	513	520	524	526	1.0	%

Note:	Components may not add due to rounding.
Source:	Saskatchewan Bureau of Statistics

Personal Income

Saskatchewan personal income increased at a compound average annual rate of 7.5 per cent over the period from 2006 to 2010. The following table sets forth personal income for Saskatchewan for the five years ended December 31, 2010.

Personal Income
											Compound
											Annual
	Year Ended December 31										Growth Rate
		2006		2007		2008		2009		2010	2006-2010
						(Millions)

Wages, Salaries and Supplementary
Labour Income	$	$ 19,197	$	20,733	$	22,702	$	23,862	$	$ 25,389	7.2	%
Net Income Received by Farm Operators
from Farm Production		(268)		126		1,940		832		307	n/a
Net Income of Non-Farm Unincorporated
Business 1		2,264		2,423		2,726		3,233		3,558	12.0
Interest, Dividends and Miscellaneous
Investment Income		3,233		3,565		3,953		3,726		3,796	4.1
Others		5,021		5,475		5,952		5,992		6,304	5.9
Total	$	$ 29,447	$	32,322	$	37,273	$	37,645	$	39,354	7.5	%

1	Includes rent.
n.a. = not applicable
Source: Saskatchewan Bureau of Statistics, 2011 data are not yet available.

Economic Structure

The following table sets forth Saskatchewan's real GDP at basic prices by industry for the five years ended December 31, 2011.

Gross Domestic Product at Basic Prices by Industry in Millions of Chained 2002 Dollars

														Compound
	Year Ended December 31											Per Cent		Annual
												of 2011		Growth Rate
			2007		2008		2009		2010		2011	Total		2007-2011
							(Millions)

Goods-Producing Industries
Agriculture, forestry, fishing
and hunting		$	4,016	$	5,207	$	5,407	$	4,335	$	4,712	11.1		4.1	%
Mining 1			5,440		5,226		4,339		5,221		5,539	13.1		0.5	%
Utilities			918		909		964		1,048		1,095	2.6		4.5	%
Manufacturing			2,884		2,903		2,755		2,736		2,786	6.6		(0.9)	%
Construction			2,090		2,590		2,684		2,761		2,936	6.9		8.9	%
Subtotal		$	15,349	$	16,835	$	16,150	$	16,100	$	17,069	40.4	%	2.7	%

Services Industries
Transportation and Warehousing		$	2,281	$	2,223	$	2,175	$	2,156	$	2,319	5.5	%	0.4	%
Finance, Insurance and
Real Estate			5,789		5,971		6,124		6,271		6,477	15.3	%	2.8	%
Wholesale and Retail Trade			4,359		5,011		4,726		4,831		5,175	12.2	%	4.4	%
Business Services			4,218		4,314		4,356		4,407		4,537	10.7	%	1.8	%
Institutions			4,234		4,338		4,433		4,497		4,569	10.8	%	1.9	%
Public Administration			2,006		2,024		2,067		2,109		2,139	5.1	%	1.6	%
Subtotal		$	22,887	$	23,881	$	23,881	$	24,271	$	25,216	59.6	%	2.5	%

Gross Domestic Product at
Basic Prices		$	38,236	$	40,716	$	40,030	$	40,371	$	42,285	100.0	%	2.5	%

1	Includes oil, potash, uranium, natural gas and other minerals.
Note: Components may not add due to use of chained fisher dollar methodology. GDP at basic prices and GDP at market prices differ by the amount of "indirect taxes net of subsidies on products."
Source: Statistics Canada.

Agriculture

Based on the 2011 Census of Agriculture, Saskatchewan has 36,952 farms. With slightly less than half of the total land area of the Province utilized for farming, the Province has approximately half of the cultivated farm land in all of Canada.

Historically, wheat has been Saskatchewan's largest single grain crop in terms of volume and value. Between 2002 and 2011, wheat accounted for 29.8 per cent of all crops grown in the Province and represented over half of all the wheat grown in Canada. In 2011, wheat's share accounted for 30.7 per cent of the total Saskatchewan crop harvest. Other major grains and oilseeds such as durum, barley and canola accounted for 50.1 per cent of total crop production in 2011. Specialty crops such as mustard, lentils, peas and others accounted for 19.2 per cent of the total harvest in 2011.

Crop Production


																					2002 to 2011
	Calendar Year Ended December 31																					10 year
	2002		2003		2004		2005		2006		2007		2008		2009		2010		2011			Average
	(Millions of Tonnes)

Wheat		4.5		7.0		7.8		8.1		8.4		6.0		8.0		8.6		7.0		8.0			7.3
Durum		2.9		3.2		3.8		4.9		2.7		3.0		4.4		4.4		2.6		3.6			3.6
Barley		2.5		4.4		4.7		5.0		3.4		3.9		4.6		4.1		1.9		2.4			3.7
Canola		1.8		2.7		2.9		4.5		3.7		4.2		5.6		6.3		5.7		7.0			4.4
Specialty Crops 1		1.5		2.2		3.7		3.8		2.8		3.3		4.1		4.4		4.1		3.0			3.3
Other 2		1.7		1.8		1.9		2.6		2.9		3.3		3.1		2.4		1.3		2.0			2.3
Total		15.0		21.1		24.7		28.9		23.8		23.7		29.9		30.1		22.6		26.0			24.6

1	Includes mustard, sunflowers, lentils, field peas and canary seed.
2	Includes oats, fall rye, spring rye, flax and other mixed grain.
Source: Statistics Canada.
Note: Components may not add due to rounding.

Livestock production is also important in Saskatchewan. Approximately one-quarter of the total Canadian beef cattle herd is located in the Province. Other livestock raised in Saskatchewan include hogs, sheep, lambs, poultry and dairy cattle.

Farm cash receipts from crop production totalled $8.0 billion in 2011, with wheat, durum and canola accounting for $6.0 billion, or 75.4 per cent, of the year's total cash receipts from crop sales. Farm cash receipts from the sale of livestock and livestock products amounted to $1.7 billion in 2011, with cattle and calves accounting for $1.3 billion, or 76.2 per cent, of the year's total cash receipts from livestock sales.

Total farm cash receipts reached $10.9 billion in 2011, up 19.8 per cent from 2010.

The following table sets forth Saskatchewan's farm cash receipts for the five years ended December 31, 2011.

Farm Cash Receipts


												Compound
												Annual
	Year Ended December 31											Growth Rate
			2007		2008		2009		2010		2011	2007-2011
							(Millions)
Crops
Wheat and Durum		$	2,064	$	2,715	$	2,318	$	1,715	$	2,414	4.0	%
Canola			1,489		2,009		2,327		2,716		3,647	25.1
Barley			353		428		416		286		295	(4.4	)
Other Crops 1			1,297		1,850		2,211		1,965		1,682	6.7
Subtotal		$	5,202	$	7,001	$	7,272	$	6,681	$	8,038	11.5

Livestock & Livestock Products
Cattle & Calves		$	1,085	$	1,120	$	942	$	962	$	1,039	(1.1	)
Hogs			273		236		177		214		257	(1.5	)
Other Livestock and Livestock Products 2			348		376		371		372		404	3.8
Subtotal		$	1,706	$	1,731	$	1,491	$	1,548	$	1,700	(0.1	)

Supplementary, Deficiency, Stablization,
Insurance and Other Payments		$	871	$	680	$	463	$	912	$	1,218	8.8

Total Farm Cash Receipts		$	7,779	$	9,413	$	9,225	$	9,142	$	10,956	8.9	%

1	Includes net deferments.
2	Includes sheep, lambs, dairy products, poultry, eggs and other livestock products.
Note: Components may not add due to rounding.
Source: Statistics Canada.

Total farm revenue is made up of three components: crop receipts, livestock receipts and government program payments. Crop receipts amounted to $8.0 billion in 2011, up 20.3 per cent from 2010 due to higher production and prices. Farm cash receipts from livestock sales amounted to $1.7 billion in the same year, up 9.8 per cent from 2010. Government payments in 2011 amounted to $1.2 billion, up 33.5 per cent from the amount provided by both the federal and provincial governments to farmers in 2010.

Saskatchewan's 2011 realized net farm income amounted to $2.6 billion, compared with $1.8 billion in 2010. Realized net farm income is the result of deducting farm operating expenses and depreciation cost from farm cash receipts.

Mining and Petroleum/Natural Gas

In 2010, the total value of mineral sales amounted to $18.0 billion, an increase of 24.3 per cent from the prior year. Crude oil, natural gas and potash accounted for 92.0 per cent of the total value of mineral sales in 2010.

In the first two months of 2012, the value of oil sales increased by 37.8 per cent while the value of natural gas sales dropped by 35.9 per cent due to lower selling volume. The value of potash sales decreased by 13.1 per cent in the first six months of 2012.

The following table sets forth Saskatchewan's value and volume of mineral sales for the five years ended December 31, 2010.

Mineral Sales


												Compound
												Annual
	Year Ended December 31											Growth Rate
		2006		2007		2008		2009		2010		2006-2010
			(Millions of Dollars Unless Otherwise Indicated)

Value of Mineral Sales
Oil		$	7,880	$	8,376	$	13,329	$	8,974	$	10,322	7.0	%
Natural Gas			1,666		1,452		1,653		744		617	(22.0	)%
Potash			2,210		3,057		7,379		3,067		5,582	26.1	%
Other 1			1,059		1,553		1,372		1,663		1,441	8.0	%
Total		$	12,816	$	14,438	$	23,733	$	14,448	$	17,963	8.8	%

Volume of Mineral Sales
Oil (millions of barrels)			156		156		161		155		154	(0.4	)%
Natural Gas (millions of cubic metres)			7,126		6,400		5,858		5,205		4,304	(11.8	)%
Potash (thousands of tonnes)			8,210		10,661		9,894		3,715		9,733	4.3	%

1	Other includes Uranium, Gold, Sodium Sulphate, Salt, Coal, and Base Metals and Bentonite.
Note: Components may not add due to rounding.
Source: Saskatchewan Bureau of Statistics and Saskatchewan Ministry of Energy and Resources.

Oil. Saskatchewan is the second largest crude oil producing province in Canada. Subject to change due to price fluctuations and technology improvements, remaining economically recoverable reserves in the Province are estimated to be 1.2 billion barrels of crude oil.

The value of Saskatchewan oil sales increased at a compound annual rate of 7.0 per cent from 2006 to 2010 while the volume of oil sales decreased by 0.4 per cent in the same period.

Saskatchewan crude oil production is of light, medium and heavy gravity. Approximately 15 to 20 per cent of Saskatchewan’s crude is sold within the Province (primarily to the NewGrade Upgrader, Husky Upgrader and Moose Jaw Asphalt plant) while another 15 to 20 per cent is sold to refineries in other parts of Canada. The major market for Saskatchewan’s oil is the upper Midwest of the United States (approximately 65 to 75 per cent).

Both the NewGrade and Husky Upgraders are designed to produce an output of light synthetic crude oil from a feedstock of blended heavy crude oil. The NewGrade Upgrader has an operating capacity of approximately 60,000 barrels per day while the Husky Upgrader has the capacity to upgrade approximately 82,000 barrels per day.

In addition to local companies, a large number of multinational oil and gas companies are actively involved in exploration and development in the Province. The oil industry has experienced success with deep drilling discoveries and is adopting technological improvements. For example, horizontal drilling and screw pump technology can significantly improve recovery rates and lower operating costs for many reservoirs in Saskatchewan. The oil industry in the Province invested approximately $19.0 billion in the period from 2007 to 2011 exploring for and developing oil reserves. From 2007 to the end of 2011, 12,989 oil wells were drilled in Saskatchewan. In 2011, 3,528 oil wells were drilled in the Province.

Natural Gas. The volume of Saskatchewan natural gas sales decreased at a compound average annual rate of 11.8 per cent from 2006 to 2010, while the value of natural gas sales decreased by 22.0 per cent in the same period. The natural gas industry in the Province invested approximately $0.6 billion in the period from 2007 to 2011 exploring for and developing natural gas reserves. During this period, 2,767 natural gas wells were drilled. In 2011, 50 gas wells were drilled in the Province.

Potash. Saskatchewan has ten potash mines that produce potash from massive reserves located in southern Saskatchewan. By conservative estimates, Saskatchewan could supply world demand at current levels for several hundred years. Potash production in Saskatchewan is highly mechanized and relatively low-cost because of the regularity and thickness of deposits and the predictability of ore grades.

In recent years, Saskatchewan potash production has accounted for about 30 per cent of the world's output. Approximately 40 per cent of Saskatchewan's potash production is exported to the United States with the remaining exported to markets in Asia and Latin America. The Saskatchewan government implemented changes in 2005 to the potash tax system to promote sales and investment by the potash industry. As a result of the tax changes and strong demand growth, the potash industry is expected to be one of the main engines of economic growth for the Saskatchewan economy in the future. The Saskatchewan potash industry is expected to spend close to $14 billion by the end of the current decade, expanding the existing mines in the Province. There is also the potential for the development of new potash mines. K+S Potash, the German potash producer, has decided to build a solution mine in Saskatchewan at a cost of $4 billion. Other new mines could also be constructed. These expansions of productive capacity are expected to create significant economic spin offs and thousands of permanent and construction jobs in the Province.

Uranium. In 2011, Saskatchewan was the world’s second largest producer of uranium behind Kazakhstan. The Athabasca Basin, in northern Saskatchewan, contains the largest, high-grade uranium deposits in the world and has good potential for significant new discoveries. Uranium was produced at two facilities (McArthur River-Key Lake and Rabbit Lake) located in northern Saskatchewan.

Current and planned expansion of the Province’s uranium supply capability includes the McClean Lake, McArthur River and Rabbit Lake mines and the Midwest and Cigar Lake projects.

McClean Lake, the Province’s newest facility, commenced production in 1999. In 2009, with mining operations having ceased, McClean Lake continued production of stockpiled ore from the Sue E and Sue B deposits and in July 2010 the mill was placed in care and maintenance mode. Mining authorization for the McClean North deposits has been granted and the Caribou deposit was deferred due to economic conditions but continues in the regulatory review process. Current production plans are to restart the mill once Cigar Lake comes on-stream and other future ore supply sources are being evaluated.

The McArthur River project began production in 1999 with the ore being processed at the Key Lake mill. Under regulatory approval, in 2009 the mine was allowed to increase production marginally to cover 2008 reductions during scheduled mill maintenance. An application to expand production capacity at Key Lake and McArthur River is under regulatory review.

The Rabbit Lake mine returned to production in 2002 following a two-year shutdown. With the identification of additional reserves, production will continue until 2021 while other future ore supply sources continue under evaluation.

Of the future mine production projects, Cigar Lake and Midwest received initial environmental assessment approval in 1998 but did not proceed due to market conditions. Cigar Lake was granted a full construction license to proceed in 2004. In 2006 and 2008, Cigar Lake experienced water inflows and the mine was allowed to flood. The initial production date is forecast for late 2013 as remediation activities continue. In 2006, it was announced that the Midwest project would proceed and in 2008, the project was deferred due to economic conditions. Midwest was granted environmental approval in 2012 but a production decision has not been made, it is currently forecast to begin production in 2022. Other future potential includes the Millenium deposit.

Manufacturing

The value of Saskatchewan's manufacturing shipments reached $12.6 billion in 2011, up 15.3 per cent from 2010.

Manufacturing activity has been traditionally based on agriculture. Food processing is the largest component of the manufacturing sector, accounting for about 22.1 per cent of total manufacturing activity in 2011. Saskatchewan's manufacturing sector also produces farm machinery and chemical products. The further processing of primary products such as grain, livestock, forest products and oil is a growing component of Saskatchewan's manufacturing sector.

Saskatchewan's high technology industry is centred in Saskatoon. Satellite control technology, telecommunications, data communications and agricultural biotechnology products are produced in the Province for domestic and international sale.

Value of Manufacturing Shipments

												Compound
												Annual
	Year Ended December 31												Growth Rate
		2007		2008		2009		2010		2011			2007-2011
						(Millions)

Food Processing		$	2,433	$	2,670	$	2,535	$	2,468	$	2,774		3.3	%
Wood			284		239		190		219		216		(6.6	) %
Metal Fabrication			688		815		732		598		831		4.8	%
Machinery			997		1,204		1,349		1,158		1,274		6.3	%
Chemical Products			1,101		1,395		1,290		1,340		1,725		11.9	%
Other			4,920		6,858		5,267		5,129		5,757		4.0	%
Total		$	10,423	$	13,181	$	11,364	$	10,911	$	12,577		4.8	%

Note:	Components may not add due to rounding.
Source:	Statistics Canada. Data for chemicals and chemical products, electrical and electronic products are not available from Statistics Canada. These data are now included in Other.

Service Industries

The service industries form the largest component of the Province's economy. Services contribute a substantial part of the Province's economic growth and create the vast majority of jobs. Services accounted for approximately 75.0 per cent of total employment in the Province in 2011.

This sector is comprised of six industries, namely: business, personal and community services; finance, insurance and real estate; wholesale and retail trade; transportation; communication and utilities; and, public administration.

Of these, the biggest sector in terms of output share and employment is business, personal and community services. Output from the business, personal and community services sector accounts for one-fifth of the entire economy and approximately four out of ten jobs in the Province. This segment of the industry consists of: education and related services; heath care institutions, including hospitals, nursing homes and welfare services; religious organizations; amusement and recreation services; business services such as management and business consultants and computer services; personal services; and, accommodation and food.

Finance, insurance and real estate, which constitute a large component of the service-producing industries, represented 15.3 per cent of the entire Saskatchewan economy in 2011. This segment includes banks and other institutions delivering financial services, insurance carriers and agencies and real estate companies.

FINANCES OF THE GOVERNMENT

Introduction

The Saskatchewan Government (Government) has general authority for the administration of provincial activities and functions within the Province. Responsibility for a variety of such activities and functions has been ceded to local government bodies and agencies under authority of a number of provincial statutes. Responsibilities of the Government not ceded to local government bodies are carried out directly by the Government and through a number of funds and provincial Crown corporations.

Funds

The General Revenue Fund financial statements have been designed primarily to provide an accounting of the financial resources appropriated by the Saskatchewan Legislative Assembly. The General Revenue Fund is the general fund of the Government to which all public monies received are credited except where the Legislative Assembly has directed otherwise. Substantially all of the debt of the Government is incurred pursuant to The Financial Administration Act, 1993 and is repayable from the General Revenue Fund.

The General Revenue Fund financial statements are not intended to be summary financial statements that provide a full accounting of the financial affairs and resources of all the entities for which the Government is responsible. Only those transactions pertaining to the receipt of money from or payment of money to the General Revenue Fund are reflected in these statements. The financial transactions of other Crown entities, such as provincial Crown corporations, agencies, boards, and commissions, are reported separately from the financial transactions of the General Revenue Fund. See the "Government of Saskatchewan Summary Financial Statements" contained within Exhibit (e) Volume 1 of the Public Accounts.��

A variety of special purpose and other funds are administered by the Government. Included within these funds are pension plans, funds held in trust for third parties under various arrangements and special purpose funds. The assets, liabilities and residual balances of these funds are maintained and reported separately from those of the General Revenue Fund.

The General Revenue Fund's fiscal year begins on April 1 and ends on March 31. Revenue and expenses are recorded on an accrual basis except for defined benefit pension plan costs.

During 2008-09, the Government made a change in accounting policy to comply with the recommendations of the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants for long-term debt. On the Statement of Financial Position, loans to Crown corporations and public debt (gross debt net of sinking funds) are now presented net of government business enterprise specific debt. Additionally, reimbursements of interest from Crown corporation general debt are no longer netted against debt servicing costs on the Statement of Operations. Prior to this change in accounting policy, public debt was presented on a gross basis on the Statement of Financial Position, and all reimbursements of interest from Crown corporations’ debt were netted against debt servicing costs. The 2007-08 amounts have been restated for this change in accounting policy.

During 2008-09, the Government reclassified certain revenue categories, with restatement of 2007-08 amounts:

	●	Corporation capital tax has been split into two components. Resource surcharge has been moved to non-renewable resources and the remaining component of corporation capital tax has been included with other taxes;
	●	Liquor consumption tax has moved from sales tax to other taxes and sales tax has been renamed provincial sales tax; and
	●	Crown land sales previously reported in oil revenues has been broken out.

Each year the Minister of Finance presents a budget to the Legislative Assembly that provides estimates of the Government's planned activities during the fiscal year for the General Revenue Fund. The estimates of expenses in each fiscal year are voted by the Legislative Assembly, with the exception of those expenses for which provision has been made previously by legislation, such as amounts required to service the debt of the Government.

The accounts and financial statements of the Province are examined by the Provincial Auditor who is responsible to the Legislative Assembly and is required to make a report to the Legislative Assembly with respect to each fiscal year.

General Revenue Fund Statement of Cash Requirements and Financing

The following table summarizes cash requirements and financing of the General Revenue Fund for the five fiscal years ended March 31, 2012, and the Budget Estimate for fiscal year 2013.

General Revenue Fund Statement of Cash Requirements and Financing


	Fiscal Year Ended March 31
																	Estimated
		2008			2009			2010			2011			2012			2013
		(Millions)

Cash Requirements

Operating Activities
Revenue		$	9,866		$	12,325		$	10,267		$	11,061		$	11,120		$	11,291
Expenditures			8,583			10,355			10,099			10,965			11,066			11,196
Transfers (to) from Fiscal Stabilization Fund			642			0			0			0			0			0
Transfers (to) from Saskatchewan Infrastructure Fund			0			0			0			0			0			0
Transfers (to) from Growth and Financial Security Fund			-			419			257			(48	)		298			(48	)
Budgetary Surplus (Deficit) 1			641			2,389			425			48			352			47
Add (deduct) Non-Cash Items
Amortization of Foreign Exchange (Gain) Loss			2			5			(1	)		0			2			(1	)
Amortization of Capital Assets			148			167			146			172			167			192
(Gain) Loss on Loans and Investments			9			1			3			0			(1	)		(15	)
Net Change in Non-Cash Operating Activities			228			(115	)		227			(383	)		(317	)		182
Earnings Retained in Sinking Funds			(46	)		(79	)		(159	)		(149	)		(166	)		(95	)
Cash provided by (used for) Operating Activities			982			2,368			641			(312	)		37			310

Capital Activities
Acquisition of Capital Assets			(278	)		(342	)		(348	)		(370	)		(398	)		(504	)

Investing Activities
Receipts			124			565			1,012			1,037			244			1,356
Disbursements			407			2,323			466			257			150			1,289
Cash (required for) provided by
Investing Activities			(283	)		(1,758	)		546			780			94			67
Cash provided (required)		$	421		$	268		$	839		$	98		$	(267	)	$	(127	)

Financing Activities
Proceeds from Debt		$	558		$	32		$	509		$	183		$	80		$	1,328
Repayment of Debt			(646	)		(755	)		(867	)		(688	)		(335	)		(1,157	)
Proceeds from (repayment of) Debt			(88	)		(723	)		(358	)		(505	)		(255	)		171
Increase (decrease) in Deposits Held			74			209			(198	)		7			306			0
Decrease (increase) in Cash & Temporary Investments			(407	)		246			(283	)		400			216			(44	)
Total Financing		$	(421	)	$	(268	)	$	(839	)	$	(98	)	$	267		$	127

See Notes 1-9 commencing on page 34.

Fiscal Year 2012 Results

On June 26, 2012, the Minister of Finance released the financial results for the General Revenue Fund (GRF) for the fiscal year ended March 31, 2012.

Total General Revenue Fund revenue of $11,120.4 million for the fiscal year ended March 31, 2012 increased by $59.7 million, or 0.5 per cent, from the previous fiscal year. The increase is primarily due to higher non-renewable resources revenue and higher federal transfers. These increases were partially offset by decreases in transfers from Crown Entities, taxes and other own-source revenue.

General Revenue Fund expense (operating expense plus debt-servicing expense) of $11,065.8 million increased by $100.5 million, or 0.9 per cent, over the previous year primarily due to year-over-year increases in Education, Corrections, Public Safety and Policing, Finance, Highways and Infrastructure, Chief Electoral Officer and Municipal Affairs. These increases were partially offset by decreases in Health, Advanced Education, Employment and Immigration, Agriculture, Energy and Resources, Environment and Finance Debt Servicing.

The GRF received a net transfer of $297.7 million from the Growth and Financial Security Fund (GFSF) in fiscal 2012. The net transfer consisted of a $27.3 million transfer from the GRF to the GFSF (one-half of the GRF pre-transfer surplus as required by The Growth and Financial Security Act, and a transfer of $325.0 million from the GFSF to the GRF for government debt reduction.

As a result, the General Revenue Fund recorded a surplus of $352.3 million for fiscal year 2012, compared to a GRF surplus of $47.7 million for fiscal year 2011.

At March 31, 2012, gross debt of the General Revenue Fund was $10,910.8 million compared to $10,549.9 million at March 31, 2011. Approximately 54 per cent of the General Revenue Fund's gross debt at March 31, 2012 was incurred for general government purposes while 46 per cent was incurred for and reimbursable from Crown corporations. Crown corporation debt at March 31, 2012 was incurred for general Crown purposes (12 per cent) and for Government Business Enterprises (88 per cent). Approximately 97 per cent of the General Revenue Fund's gross debt was denominated in Canadian dollars while about 3 per cent was denominated in United States dollars at March 31, 2012.

During fiscal year 2012, the General Revenue Fund issued and sold $76.3 million in debentures for general government and redeemed outstanding debentures issued for general government purposes totaling $143.6 million. In addition, short-term debt was reduced by $145.0 million. During the same period, the General Revenue Fund issued and sold $327.9 million in debentures for Crown corporations, increased short term debt by $251.3 million for Crown corporations and redeemed $13.5 million of debentures issued for Crown Corporations. The General Revenue Fund's sinking funds totaled $2,641.1 million at March 31, 2012. Contributions to the General Revenue Fund's sinking funds amounted to $89.9 million in fiscal year 2012.

Guaranteed debt of the General Revenue Fund was $93.9 million at March 31, 2012, compared to $35.4 million at March 31, 2011.

Fiscal Year 2013 Budget Estimate

On March 21, 2012, the Minister of Finance tabled the Budget Address and Estimates for the fiscal year ending March 31, 2013.

The Budget Estimates for the General Revenue Fund for fiscal year 2013 projected total revenue of $11,290.9 million, total expense of $11,195.9 million, a transfer from the GRF to the GFSF of $47.5 million, and a budgetary surplus of $47.5 million. Net cash required for operations and investments for fiscal year 2013 is estimated to be $126.6 million.

Expense in the 2012-13 Budget is estimated to be up by $507.6 million, or 4.7 per cent, from the 2011-12 Budget. This increase is primarily due to increases in Health, Education (including Advanced Education, Employment and Immigration and Teachers' Pensions and Benefits), Highways and Infrastructure, Social Services and Agriculture.

2012-13 borrowing requirements are estimated at $1,328.4 million, of which $204.0 million is for the General Revenue Fund and $1,124.4 million is for Crown Corporations. Debt retirement is estimated at $1,157.2 million, resulting in an increase in gross debt of $171.2 million.

The 2012-13 Budget estimates public debt (gross debt less equity in sinking funds) at March 31, 2013 to be $9,257.0 million compared to $8,237.8 million forecast at March 31, 2012, an increase of $1,019.2 million, or 12.4 per cent. Government general debt is estimated to be $3,810.2 million at March 31, 2013, which is unchanged from the forecast at March 31, 2012. Crown corporation general debt is estimated to be $724.0 million at March 31, 2013 compared with $569.4 million forecast at March 31, 2012, an increase of $154.6 million or 27.2 per cent. Government Business Enterprise specific debt is estimated to be $4,722.8 million at March 31, 2013 compared to $3,858.2 million forecast at March 31, 2012, an increase of $864.6 million or 22.4 per cent.

During the period April 1, 2012 to September 30, 2012, the Government issued and sold debentures and bonds totaling $62.7 million. On July 6, 2012 the Government issued $62.7 million, 2.53 per cent debentures to the Canada Pension Plan Investment Board (CPPIB) due July 6, 2022.

The 2012-13 Budget continues reporting Summary Financial Budget details that provide a bottom line forecast for all entities over which the Government has control, such as Crown corporations and other entities. The Budget uses a full accrual accounting model for reporting capital costs in both the GRF and the Summary Financial Statements. Since 2004-05, under this full accrual accounting model, the full cost of capital is no longer included in the expenses within the fiscal year. Rather, the capital is included as part of the Government's assets. The annual cost of using the asset (i.e. amortization) is recognized as an expense in the annual spending.

During 2008-09, the Government made a change in accounting policy to comply with the recommendations of the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants for long-term debt. On the Statement of Financial Position, loans to Crown corporations and public debt (gross debt net of sinking funds) are now presented net of government business enterprise specific debt. Additionally, reimbursements of interest from Crown corporation general debt are no longer netted against debt servicing costs on the Statement of Operations. Prior to this change in accounting policy, public debt was presented on a gross basis on the Statement of Financial Position, and all reimbursements of interest from Crown corporations' debt were netted against debt servicing costs. The 2007-08 amounts have been restated for this change in accounting policy.

During 2008-09, the Government reclassified certain revenue categories, with restatement of 2007-08 amounts:

	●	Corporation Capital Tax has been split into two components. Resource Surcharge has been moved to Non-Renewable Resources and the remaining component of Corporation Capital Tax (on financial institutions and Crown corporations only) has been included with Other Taxes;
	●	Liquor Consumption Tax has moved from Sales Tax to Other Taxes and Sales Tax has been renamed Provincial Sales Tax; and
	●	Crown land sales previously reported in Oil revenue, has been broken out.

Beginning in 2012-13, commissions paid to tax vendors are recorded as GRF expense rather than deducted from tax revenue. As a result, estimated 2012-13 GRF revenue and expense increased by $9 million.

Fiscal Year 2013 1st Quarter Report

On August 3, 2012, the Minister of Finance released the 1st Quarter Financial Report for the fiscal year ending March 31, 2013. The report forecasts total revenue of $11,177.7 million, total expense of $11,165.9 million, a net transfer to the GFSF of $5.9 million and a budgetary surplus of $5.9 million.

Total GRF revenue is forecast to be down $113.2 million from budget primarily due to a lower forecast for non-renewable resource revenue, partially offset by higher forecasts for tax revenue, Saskatchewan Liquor and Gaming Authority net income and increased federal transfers related to disaster assistance.

Total GRF expense is forecast to be down $30.0 million from budget, primarily reflecting effective expense management across government, partially offset by an increase in Government Relations due to higher-than-anticipated claims and payments for 2010 and 2011 damages in the Provincial Disaster Assistance Program.

On May 25, 2012, the government announced a major re-organization of government ministries. The re-organization resulted in a new structure to the Budget Estimates that were tabled with the March budget. The 1st Quarter Report provided details of the re-organization and restated 2012-13 budget estimates.

Total debt is forecast to be $9.3 billion, up $1,064.1 million from actual 2011-12 due to increases in Crown corporation debt.

General Revenue Fund Revenue

The General Revenue Fund receives revenue from taxes, non-renewable resources, other provincial sources and other governments.

The following table sets forth General Revenue Fund revenue by major sources for each of the previous five fiscal years ending March 31, 2012, and the Budget Estimate for fiscal year 2013. Also included is the percentage composition of major revenue sources for the Budget Estimate for fiscal year 2013.

General Revenue Fund Revenue 1

	Fiscal Year Ended March 31
															Percentage
													Budget		of Total
											Actual		Estimate		Revenue
		2008		2009		2010			2011		2012		2013		2013
						(Thousands)

Taxation
Corporation Capital 2		$	0	$	0	$	0		$	0	$	0	$	0		0.0	%
Corporation Income			673,641		591,930		881,424			1,155,273		793,790		817,200		7.2
Individual Income			1,938,258		1,844,226		1,890,848			1,795,788		1,897,409		2,084,300		18.5
Sales 3			929,865		1,108,628		1,084,001			1,186,992		1,322,161		1,348,700		11.9
Fuel			406,434		429,162		441,533			463,147		475,452		508,300		4.5
Tobacco			190,412		199,072		196,868			237,507		242,853		247,100		2.2
Other			279,633		257,977		237,599			292,935		303,642		309,400		2.7
Total			4,418,243		4,430,995		4,732,273			5,131,642		5,035,307		5,315,000		47.1	%

Non-Renewable Resources
Oil			1,246,205		1,616,071		1,294,670			1,274,053		1,528,808		1,600,900		14.2	%
Potash			432,770		1,364,463		(183,887	)		262,540		438,372		705,200		6.2
Crown Land Sales 4			419,062		928,245		151,455			466,993		235,507		220,000		1.9
Natural Gas			133,780		125,922		40,078			29,741		17,389		12,500		0.1
Resource Surcharge 5			315,230		458,299		475,632			360,848		452,807		485,900		4.3
Other			93,299		119,408		132,676			133,624		149,074		123,800		1.1
Total			2,640,346		4,612,408		1,910,624			2,527,799		2,821,957		3,148,300		27.9	%

Transfers from Government
Entities and Other Revenues
Crown Investments Corporation			200,000		0		185,000			266,000		110,000		150,000		1.3	%
- Special dividend			0		365,000		570,000			213,500		130,000		3,000		0.0
Liquor & Gaming Authority			399,531		446,652		429,924			437,063		465,917		439,900		3.9
Other Enterprises and Funds			53,623		39,564		64,172			48,119		75,628		46,500		0.4
Motor Vehicles Fees			140,631		151,143		158,303			161,093		173,151		172,800		1.5
Other Licences and Permits			35,927		36,607		34,587			29,425		25,414		25,400		0.2
Sales, Services, and Service Fees			94,936		101,885		110,555			132,073		132,039		124,600		1.1
Commercial operations			78,664		86,567		87,771			91,874		99,511		0		0.0
Interest, premium, discount and
exchange 6			120,502		187,957		237,372			209,704		241,336		145,400		1.3
Other			80,714		157,330		141,844			212,138		83,793		133,100		1.2
Total			1,204,528		1,572,705		2,019,528			1,800,989		1,536,789		1,240,700		11.0	%

Transfers from the
Federal Government
Equalization			226,146		0		0			0		0		0		0.0	%
Canada Health Transfer			739,648		823,496		819,262			795,422		846,771		902,900		8.0
Canada Social Transfer			325,098		338,301		334,976			342,626		352,420		363,700		3.2
Other			311,669		547,167		449,795			462,200		527,187		320,300		2.8
Total			1,602,561		1,708,964		1,604,033			1,600,248		1,726,378		1,586,900		14.1	%

Total Revenue		$	9,865,678	$	12,325,072	$	10,266,458		$	11,060,678	$	11,120,431	$	11,290,900		100	%

1	See "General Revenue Fund Statement of Operations and Accumulated Deficit" commencing on page 36.
2	Commencing in 2008-09, the non-Resource Surcharge component of Corporation Capital tax is recorded under Taxation - Other. The 2007-08 amounts have been restated.
3	Commencing in 2008-09, the Liquor Consumption Tax component of Sales Tax is recorded under Taxation - Other. The 2007-08 amounts have been restated.
4	Prior to 2008-09, Crown Land Sales were included in Oil revenues. The 2007-08 amounts have been restated.
5	Prior to 2008-09, Resource Surcharge revenue was included in Corporation Capital Tax. The 2007-08 amounts have been restated.
6	During 2008-09, the Government made a change in accounting policy resulting in reimbursements of interest from Crown corporation general debt no longer being netted against debt servicing costs. The 2007-08 amounts have been restated.

Total General Revenue Fund revenue for 2012-13 is estimated at $11,290.9 million, an increase of $487.6 million, or 4.5 per cent, from the 2011-12 Budget Estimates. The increase is due to increases across all major revenue categories, primarily higher non-renewable resource revenue, higher other own-source revenue and transfers from Crown Entities. Beginning in 2012-13, commissions paid to Tax vendors are recorded as GRF expense instead of deducted from PST, LCT and Tobacco Tax revenue. The 2011-12 Budget Estimate has been restated and increased by (PST $8.2 million, LCT $0.7 million and Tobacco $0.1 million) to be consistent with this change.

Taxation. Provincial taxes include personal and corporate income taxes, sales tax, tobacco tax, fuel tax and other taxes, including liquor consumption, corporate capital and insurance premiums taxes. Tax revenue is estimated to total $5,315.0 million, or 47.1 per cent, of total General Revenue Fund revenue for fiscal 2013, an increase of $38.2 million, or 0.7 per cent, from the fiscal 2012 estimate. Increases are expected for all tax categories except corporation income tax and tobacco tax.

Non-Renewable Resources. Non-renewable resource revenue is collected by the Government in respect of the production and sale of crude oil, natural gas, potash, uranium, other minerals, as well as the sale of Crown petroleum and natural gas rights (Crown land sales). Non-renewable resource revenue is estimated to total $3,148.3 million, or 27.9 per cent, of General Revenue Fund revenue for fiscal 2013, an increase of $319.4 million, or 11.3 per cent, from the fiscal 2012 estimate. The increase is projected to come from higher potash and oil royalties partially offset by lower Crown land sales revenue.

Transfers from Government Entities and Other Revenues. Transfers from Government entities and other revenues include dividends from Provincial Crown Entities, motor vehicle fees, charges for service, interest earnings, licenses and permits, and other miscellaneous revenues. These revenues of the Province are estimated at $1,240.7 million, or 11.0 per cent, of General Revenue Fund revenue for fiscal 2013, an increase of $111.9 million, or 9.9 percent, from the fiscal 2012 estimate. The increase is primarily due to higher transfers from Crown Entities and other miscellaneous own source revenues.

Transfers from Crown Entities are principally from the Crown Investments Corporation of Saskatchewan (CIC) and the Saskatchewan Liquor and Gaming Authority (SLGA). The Government determines the timing and level of transfers from CIC to the extent of available income or surplus. The 2012-13 Budget Estimate includes a CIC regular dividend of $150 million and a special dividend of $3.0 million as compared to a $110 million regular dividend and a $10 million special dividend in the 2011-12 Budget Estimate. The transfer from SLGA represents SLGA net income for the year. In 2012-13 this amount is estimated to be $439.9 million, an increase of $17.9 million from the 2011-12 Budget Estimate.

Transfers from the Federal Government. Transfers from the Government of Canada consist of payments made to the Province to assist in financing a number of programs. Transfer payments from the federal government are estimated to total $1,586.9 million in fiscal 2013, an increase of $18.1 million, or 1.2 per cent from the fiscal 2012 estimate. Transfers from the Government of Canada are estimated to represent 14.1 per cent, of General Revenue Fund revenue in 2012-13.

Unconditional federal transfer payments made under the Canada Health Transfer (CHT) and Canada Social Transfer (CST) are authorized by the Federal-Provincial Fiscal Arrangements Act, 1977. These federal programs provide "block funding" to all provinces in support of health care, post-secondary education and social assistance. There is no link between provincial expenditures and these transfers. Combined, these transfers are expected to be $1,266.6 million for fiscal 2013, an increase of $66.8 million, or 5.6 per cent, from the fiscal 2012 estimate.

The 2012-13 CHT Budget Estimate is $902.9 million ($55.8 million higher than the 2011-12 Budget Estimate) and the 2012-13 CST estimate is $363.7 million ($11.0 million higher than the 2011-12 Budget Estimate). The increases are primarily due to legislated increases in the total federal allocations (6% for CHT and 3% for CST), with the CHT increase offset slightly by changes to the value Saskatchewan's corporate and personal income tax points.

Saskatchewan did not receive an Equalization payment from the federal government in 2011-12 and will again not be a recipient province in 2012-13 due to the strength of the Province's natural resource revenue and other revenues as compared to the national average.

Other federal transfers in fiscal 2013 are estimated at $320.3 million, $48.7 million lower than the fiscal 2012 Budget Estimate. The decrease is primarily related to the conclusion of a number of federal-provincial cost-sharing stimulus and major infrastructure programs.

General Revenue Fund Expense

The following table provides a breakdown of the General Revenue Fund expense on government programs and services for the five fiscal years ended March 31, 2012, and includes the Budget Estimate for fiscal year 2013.

General Revenue Fund Expense1
(unaudited)

	Fiscal Year Ended March 31
														Percentage
												Budget		of Total
										Actual		Estimate		Expense
		2008		2009		2010		2011		2012		2013		2013
						(Thousands)

Agriculture		$	302,197	$	424,396	$	373,246	$	482,306	$	439,632	$	430,777		3.8	%
Education 2			1,645,114		2,200,752		2,200,456		2,299,065		2,423,439		2,486,665		22.2
Environment			174,921		177,129		172,304		213,895		200,169		178,462		1.6
Finance 3			284,463		290,832		326,558		314,102		358,237		351,936		3.1
Finance Debt Servicing 4			546,718		520,181		479,962		424,334		411,957		400,000		3.6
Health			3,504,333		3,976,241		3,934,231		4,547,793		4,400,159		4,680,168		41.8
Highways and Infrastructure			353,684		482,400		418,279		427,471		443,479		425,910		3.8
Justice and Attorney General			129,189		135,648		145,293		145,871		149,632		152,558		1.4
Social Services			615,032		676,604		740,087		795,778		787,314		852,725		7.6
Other Expense			1,027,158		1,470,956		1,308,337		1,314,725		1,451,745		1,236,712		11.1
Total		$	8,582,809	$	10,355,139	$	10,098,753	$	10,965,340	$	11,065,763	$	11,195,913		100.0	%

1	See "General Revenue Fund Statement of Operations and Accumulated Deficit" commencing on page 36.
2	Includes the Ministries of Advanced Education, Employment and Immigration and Education (including Teachers' Pensions and Benefits)
3	Includes Public Service Pensions and Benefits
4	During 2008-09, the Government made a change in accounting policy resulting in reimbursements of interest from Crown corporation general debt no longer being netted against debt servicing costs. The 2007-08 amounts have been restated.

In fiscal year 2013, 80.3 per cent of the General Revenue Fund estimated total expense is for transfer payments to individuals (e.g. social assistance) or organizations such as health authorities, school boards, and municipalities for their operating, pension and capital requirements. Government organizations account for 12.0 per cent of the estimated expense, 2.5 per cent is for benefits and pensions and 1.6 per cent is for the amortization of government owned assets and infrastructure. The remaining 3.6 per cent of the estimated total expense is for debt servicing.

Agriculture. The Ministry's estimated total expense for fiscal year 2013 is $430.8 million, an increase of $13.0 million, or 3.1 percent, from the fiscal year 2012 estimate. The increase largely reflects higher funding for agricultural business development programs.

Education (includes Advanced Education, Employment and Immigration, Education, and Teachers' Pensions and Benefits). The estimated total expense for fiscal year 2013 is $2,486.7 million, an increase of $198.6 million, or 8.7 per cent, from the fiscal year 2012 estimate. The increase primarily reflects increases for school operating and capital funding.

Environment. The Ministry's estimated total expense for fiscal year 2013 is $178.5 million, a decrease of $1.9 million, or 1.1 per cent, from the fiscal year 2012 estimate. The decrease primarily reflects reductions due to the completion in 2011-12 of a four-year enhanced Climate Change funding program and lower wildfire management costs, partially offset by increased environmental protection costs.

Finance. The Ministry's estimated total expense for fiscal year 2013 is $351.9 million, an increase of $2.0 million, or 0.6 per cent, from the fiscal year 2012 estimate, primarily due to increased costs for pension and benefit programs.

Finance Debt Servicing. Costs for servicing government debt for fiscal year 2013 are estimated to be $400.0 million, a decrease of $20.0 million, or 4.8 per cent, from the fiscal year 2012 estimate. The decrease is mainly due to an expected reduction in interest rates on new borrowing.

Health. The Ministry's estimated total expense for fiscal year 2013 is $4,680.2 million, an increase of $217.6 million, or 4.9 per cent, from the fiscal year 2012 estimate. The increase primarily reflects higher funding provided to regional health authorities for compensation, drugs and medical supplies and operating costs.

Highways and Infrastructure. The Ministry's estimated total expense for fiscal year 2013 is $425.9 million, an increase of $45.6 million, or 12.0 per cent, from the fiscal year 2012 estimate. The increase primarily reflects funding for the Municipal Roads Strategy and transportation system surface preservation.

Justice and Attorney General. The Ministry's estimated total expense for fiscal year 2013 is $152.6 million, an increase of $7.2 million, or 4.9 per cent, from the fiscal year 2012 estimate due largely to costs related to increased court appearances.

Social Services. The Ministry's estimated total expense for fiscal year 2013 is $852.7 million, an increase of $38.6 million, or 4.7 per cent, from the fiscal year 2012 estimate. The increase primarily reflects increases for income assistance programs, disability services and child protection.

Other Expense. The other category includes expenses for industry and economic development, government relations, aboriginal affairs and ministries serving central government functions. The category's estimated total expense for fiscal year 2013 is $1,236.7 million, an increase of $6.8 million, or 0.6 per cent, from the fiscal year 2012.

Transfers To (From) The Growth and Financial Security Fund

The Growth and Financial Security Fund (GFSF), was established with the passage of The Growth and Financial Security Act on May 14, 2008. The purpose of the GFSF is to assist in the achievement of the Government of Saskatchewan's long term objectives by providing for financial security of the Government of Saskatchewan from year to year and to provide a source of funds that are to be available for appropriation to be used for programs of the Government of Saskatchewan identified as promoting or enhancing the economic development of Saskatchewan.

On the coming into force of The Growth and Financial Security Act, the balances in the Fiscal Stabilization Fund ($1,528.9 million) and the Saskatchewan Infrastructure Fund ($105.1 million) were transferred to the Growth and Financial Security Fund.

At March 31, 2012, the GFSF had a balance of $708.3 million. The following table displays net transfers to and from the GFSF for the five fiscal years ended March 31, 2012 and includes the Budget Estimate for fiscal year 2013. Transfers into the GFSF are shown as a positive number and transfers from the GFSF are shown as a negative number.

	Fiscal Year Ended March 31

															Budget
															Estimate
		2008		2009			2010			2011		2012			2013
		(Thousands)

Growth and Financial Security Fund			N/A	$	(418,930	)	$	(256,795	)	$	47,669	$	(297,666	)	$	47,494

Transfers To (From) The Fiscal Stabilization Fund

The 2000-01 Budget established the Fiscal Stabilization Fund (FSF) to safeguard the fiscal position of the Province from year to year. The FSF was established through legislation with an initial appropriation from the General Revenue Fund of $775.0 million in fiscal year 2001.

The Growth and Financial Security Act, passed on May 14, 2008, repealed The Balanced Budget Act, The Fiscal Stabilization Fund Act, and The Infrastructure Fund Act. On the coming into force of The Growth and Financial Security Act, the balance in the FSF was transferred to the Growth and Financial Security Fund (GFSF) and the FSF ceased to exist.

The following table displays transfers to and from the FSF for the five fiscal years ended March 31, 2012. Transfers into the FSF are shown as a positive number and transfers from the FSF are shown as a negative number.

Transfers To (From) The Fiscal Stabilization Fund


	Fiscal Year Ended March 31


		2008		2009			2010		2011		2012
		(Thousands)

Fiscal Stabilization Fund		$	641,434	$	(1,528,934	)*		N/A		N/A		N/A

* Transferred to the GFSF upon the passage of The Growth and Financial Security Act.

Transfers To (From) The Saskatchewan Infrastructure Fund

The Saskatchewan Infrastructure Fund (SIF) was established at mid-year 2006-07 to support the provision of public infrastructure. The SIF was established through legislation with an initial appropriation from the General Revenue Fund of $100.0 million in fiscal year 2007. On the coming into force of The Growth and Financial Security Act, the balance in the SIF was transferred to the GFSF and the SIF ceased to exist.

The following table displays transfers to and from the SIF for the five fiscal years ended March 31, 2012. Transfers into the SIF are shown as a positive number and transfers from the SIF are shown as a negative number.

Transfers To (From) The Saskatchewan Infrastructure Fund


	Fiscal Year Ended March 31


	2008		2009			2010		2011		2012
						(Thousands)

Saskatchewan Infrastructure Fund	$	0	$	(105,090	)*		N/A		N/A		N/A

* Transferred to the GFSF upon the passage of The Growth and Financial Security Act.

General Revenue Fund Investing Activities

Investing activities of the General Revenue Fund include loans to and investments in Crown entities and other organizations, individuals and agricultural land held for resale. Cash provided by investing activities for fiscal year 2012 was $93.8 million as compared to $779.8 million in fiscal year 2011. Cash provided by investing activities for fiscal year 2013 is estimated at $67.2 million. The changes in both years are related primarily to debt redemption.

Financing and Debt Management

Saskatchewan's financing activities involve the raising of funds through the issue and sale of Province of Saskatchewan securities, changes in deposits held and changes in cash and temporary investments. Funds raised are used to assist in the financing of the capital budgets of, and to provide a temporary credit facility for, Crown corporations as well as for general government purposes (which includes General Revenue Fund operations and other non-Crown corporation agencies). Crown corporations are responsible for reimbursing the General Revenue Fund for the costs of servicing the interest and principal associated with debt borrowed on their behalf. In addition to direct borrowing in the name of the Province, the Government provides loan guarantees for certain purposes such as bonds issued in the name of Crown corporations that are offered for sale to Saskatchewan residents.

At March 31, 2012, gross debt of the General Revenue Fund amounted to $10,910.8 million as compared to $10,549.9 million at March 31, 2011. Approximately 46 per cent of the gross debt of the General Revenue Fund at March 31, 2012 was reimbursable from and was incurred for Crown corporations. Approximately 54 per cent of the General Revenue Fund gross debt at March 31, 2012 was incurred for general government purposes.

Approximately 97 per cent of the gross debt of the General Revenue Fund was denominated in Canadian dollars while about 3 per cent was denominated in U.S. dollars at March 31, 2012. Included in the debt denominated in Canadian dollars are certain financing transactions that involved borrowing in foreign currencies and swapping or hedging the liability into Canadian dollars to eliminate the foreign exchange rate risk to the General Revenue Fund. (Foreign exchange adjustments resulted in a decrease in gross debt of $7.5 million at March 31, 2012, compared to a decrease of $12.0 million at March 31, 2011).

Securities issued and sold include Province of Saskatchewan promissory notes and debentures. At March 31, 2012, promissory notes and debentures outstanding were $692.6 million and $10,218.2 million, respectively. Promissory notes and debentures outstanding at March 31, 2011, were $586.3 million and $9,963.6 million, respectively.

During fiscal year 2012, the Government issued and sold $76.3 million in debentures for general government purposes. During the same period, the Government redeemed outstanding debentures and promissory notes for general government purposes totalling $143.6 million and $145.0 million respectively.

During the year, $327.9 million in debentures and $251.3 million of promissory notes were issued and sold for the purposes of Crown corporations. Redemptions of debentures issued for Crown corporations were $13.5 million during fiscal 2012.

The Government's sinking funds totalled $2,641.1 million at March 31, 2012. Contributions to the Government's sinking funds amounted to $89.9 million in fiscal year 2012.

The following table sets forth the debt of the General Revenue Fund (including guarantees) for the five fiscal years ended March 31, 2012.

	Total Debt 1

	At March 31
	2008		2009		2010		2011		2012
					(Thousands)

Promissory Notes
(for the purpose of)
Crown Corporations 2	$	316,702	$	154,197	$	455,630	$	371,254	$	622,595
General Government Purposes 3		113,298		0		194,370		215,039		70,062
Total		430,000		154,197		650,000		586,293		692,657

Debentures
(for the purpose of)
Crown Corporations 2		3,442,836		3,802,379		3,807,387		4,066,987		4,381,340
General Government Purposes 3		7,705,073		7,109,217		6,232,638		5,896,603		5,836,822
Total		11,147,909		10,911,596		10,040,025		9,963,590		10,218,162

Gross Debt		11,577,909		11,065,793		10,690,025		10,549,883		10,910,819

Less: Equity in Sinking Funds
(for the purpose of)
Crown Corporations		365,210		400,306		410,849		455,405		541,776
General Government Purposes 3		994,048		2,963,931		2,286,526		1,976,416		2,099,294

Total		1,359,258		3,364,237		2,697,375		2,431,821		2,641,070
		10,218,651		7,701,556		7,992,650		8,118,062		8,269,749

Guaranteed Debt		25,227		20,305		17,058		35,428		93,854

Debt plus Guaranteed Debt	$	10,243,878	$	7,721,861	$	8,009,708	$	8,153,490	$	8,363,603

1	Debt repayable in foreign currency has been restated in Canadian dollar equivalents based on the exchange rate in effect on March 31 of each year.
2	These enterprises are responsible for reimbursing the General Revenue Fund for the repayment of principal and interest.
3	Debt for General Government Purposes is incurred for the general purposes of, and is repayable out of, the General Revenue Fund.

The following table sets forth the allocation of gross debt of the General Revenue Fund for the five fiscal years ended March 31, 2012.

	Gross Debt by Allocation 1

	At March 31
	2008		2009		2010		2011		2012
					(Thousands)

Crown Corporations
Information Services Corporation of Saskatchewan	$	13,547	$	13,547	$	13,547	$	13,547	$	9,935
Investment Saskatchewan Inc.		3,919		0		0		0		0
Municipal Financing Corporation of Saskatchewan		26,230		39,092		97,660		105,153		137,746
Saskatchewan Crop Insurance Corporation		100,000		50,000		0		0		0
Saskatchewan Gaming Corporation		0		0		6,000		6,000		6,000
Saskatchewan Housing Corporation		83,004		52,004		52,004		52,004		52,004
Saskatchewan Opportunities Corporation		31,844		37,543		34,783		36,684		36,684
Saskatchewan Power Corporation		2,359,597		2,515,488		2,772,265		2,812,158		3,096,922
Saskatchewan Telecommunications
Holding Corporation		347,379		355,600		356,100		436,600		600,800
Saskatchewan Water Corporation		41,074		43,583		54,475		54,912		62,661
SaskEnergy Incorporated		752,944		849,819		876,183		921,183		1,001,183

Total Crown Corporations		3,759,538		3,956,676		4,263,017		4,438,241		5,003,935

General Government Purposes		7,818,371		7,109,217		6,427,008		6,111,642		5,906,884

Gross Debt	$	11,577,909	$	11,065,893	$	10,690,025	$	10,549,883	$	10,910,819

1	Debt repayable in foreign currency has been restated in Canadian dollar equivalents based on the exchange rate in effect on March 31 of each year.

The following table sets forth the composition of debentures issued and redeemed by the General Revenue Fund for the five fiscal years ended March 31, 2012.

Composition of Debentures Issued and Redeemed 1
(unaudited)

	Fiscal Year Ended March 31

	2008			2009			2010			2011			2012
							(Millions)

Total Debentures Issued	$	419.2		$	293.8		$	105.1		$	590.3		$	404.2
Total Debentures Redeemed		1,071.0			869.8			909.4			654.7			157.1

Increase (Decrease) in Debentures	$	(651.8	)	$	(576.0	)	$	(804.3	)	$	(64.4	)	$	247.1

1	All foreign currency debt has been stated in the equivalent Canadian funds based on the exchange rate in effect on March 31 of each year.

The following table sets forth the composition of outstanding debentures of the General Revenue Fund for the five fiscal years ended March 31, 2012.

Composition of Debentures Outstanding 1

	Fiscal Year Ended March 31

	2008		2009		2010		2011		2012
					(Millions)
Debentures Outstanding
To the Public	$	10,349.3	$	10,166.5	$	9,294.9	$	9,218.5	$	9,473.1
To the Canada Pension Plan		798.6		745.1		745.1		745.1		745.1
Other Obligations		0.0		0.0		0.0		0.0		0.0

Total	$	11,147.9	$	10,911.6	$	10,040.0	$	9,963.6	$	10,218.2

1	All foreign currency debt has been stated in the equivalent Canadian funds based on the exchange rate in effect on March 31 of each year.

The Canada Pension Plan ("CPP") is a compulsory national pension plan in which residents of all provinces, except Quebec, participate. Prior to January 1, 1998, surplus contributions to the CPP were invested in non-marketable securities issued by participating provinces, provincially guaranteed Crown corporations and the federal government. The rate of interest charged by the CPP was generally lower than the rate available to the Saskatchewan government in the public market for debt of comparable maturity as CPP rates were based on the federal government long term, public market borrowing costs.

In 1997, the federal government passed legislation which took effect January 1, 1998 and changed the nature of CPP borrowing. The legislation specifies that surplus CPP funds must be invested in a diversified portfolio of securities, at arm's length from government. While provinces continue to have access to CPP funds, they are now required to pay rates comparable to their own cost of borrowing, rather than the federal long term rate.

Provincial securities sold to the CPP prior to July 1, 2005 are payable 20 years after their respective dates of issue. Effective July 1, 2005, no new loan capital is available to provinces. However, provinces are permitted to roll over maturing securities and may choose the term of the new securities within the parameters of not less than five years and not more than 30 years.

The securities are not negotiable, transferable or assignable. The securities are callable in whole or in part, before maturity, at the option of the Province.

The following table summarizes various Provincial Government debt indicators at year end for the five fiscal years ended March 31, 2012.

Debt Indicators
(unaudited)

	At March 31

	2008			2009			2010			2011			2012

Total debt of the General Revenue Fund

Per Capita 1	$	10,216		$	7,596		$	7,765		$	7,776		$	7,817
As a Percentage of Saskatchewan Gross Domestic
Product 2		20.0	%		11.5	%		13.5	%		12.7	%		11.4	%

Total debt of the General Revenue Fund -
General Government Purpose Portion 3

Per Capita 1	$	6,823		$	4,088		$	4,023		$	3,961		$	3,599
As a Percentage of General Revenue Fund Revenue		69.6	%		33.8	%		40.5	%		37.5	%		34.4	%
As a Percentage of Saskatchewan Gross Domestic
Product 2		13.4	%		6.2	%		7.0	%		6.4	%		5.3	%

Annual Interest Payments on the General
Government Purpose Portion of Gross Debt of
the General Revenue Fund

As a Percentage of General Revenue Fund Revenue		5.4	%		4.2	%		4.7	%		3.8	%		3.7	%

1	Debt per capita for 2008 through 2012 is calculated by dividing the debt at March 31 by the population of the Province on July 1 of the same calendar year.
2	Debt as a percentage of Saskatchewan's GDP is calculated by dividing the debt at March 31 by the Province's current GDP for the previous calendar year.
3	Debt of the General Revenue Fund - General Government Purpose Portion does not include debt incurred by the General Revenue Fund on behalf of Crown entities for which the Crown entities are responsible for reimbursing the General Revenue Fund.

The following table sets forth the debt maturity schedule, by principal amount and currency of payment, of the General Revenue Fund gross debt at March 31, 2012.

Debt Maturity Schedule

Fiscal Year	Canadian		U.S. Dollar Debt		Total
ending March 31	Dollar Debt		(Canadian Dollars) 1		(Canadian Dollars)
			(Thousands)

2013	$	1,849,734	$	0	$	1,849,734
2014		739,692		49,955		789,647
2015		946,427		0		946,427
2016		491,869		0		491,869
2017		390,601		0		390,601
1 - 5 years	$	4,418,323	$	49,955	$	4,468,278

2018-2022		1,503,342		124,888		1,628,230
2023-2027		578,621		99,910		678,531
2028-2032		1,229,149		0		1,229,149
2033-2037		1,393,647		0		1,393,647
2038-2042		1,462,984		0		1,462,984
After 2042		50,000		0		50,000
	$	10,636,066	$	274,753	$	10,910,819

1	Debentures repayable in U.S. dollars of $275.0 million have been converted to Canadian dollars at the exchange rate in effect at March 31, 2012. (U.S. dollars - $0.9991)

The following table sets forth the General Revenue Fund gross debt characteristics at March 31, 2012.

Debt Characteristics
(unaudited)

				Weighted Average
	As a			Term To
	Percentage			Maturity 1		Weighted Average
	of Total			(years)		Interest Rate 1


Public Debentures 2		86.8	%		12.53		6.27	%
Canada Pension Plan Debentures		6.8	%		10.58		5.03	%
Promissory Notes		6.4	%		0.04		0.93	%

Gross Debt		100	%				5.84	%

1	Weighted by the total principal amount of each loan issue.
2	Includes other debentures.

Interest on the General Revenue Fund debt amounted to $638.8 million in fiscal year 2012. Of this amount, $226.9 million was reimbursed by the Crown corporations. The non-reimbursable portion of gross interest expense was $411.9 million.

Debt guaranteed by the General Revenue Fund amounted to $93.9 million at March 31, 2012, compared to $35.4 million at March 31, 2011. This increase was due primarily to growth in the loan guarantee pertaining to the Federal Immigrant Investor Program.

The following table sets forth this guaranteed debt for the five fiscal years ended March 31, 2012.

Guaranteed Debt

	At March 31
	2008		2009		2010		2011		2012
						(Millions)

Guaranteed Debt	$	25.2	$	20.3	$	17.1	$	35.4	$	93.9

Guaranteed debt is reported net of loss provisions (2012 - $0.7 million; 2011 - $0.1 million; 2010 - $0.3 million; 2009 - $0.6 million; 2008 - $0.5 million).

The change in guaranteed debt between March 31, 2008, and March 31, 2012, is due to a reduction in agriculture-related guarantees offset by a new guarantee pertaining to the Federal Immigrant Investor Program.

Authority for the Government to guarantee the debt of others must be provided in specific legislation since no general statutory authority exists. The Financial Administration Act, 1993 provides that no department, board, commission or agent of the Government shall provide a guarantee or a program of guarantees of loans or other liabilities by which guarantee or program of guarantees the Government of Saskatchewan would be liable to make any payment with respect to the loans or liabilities, unless the guarantee or program of guarantees, as the case may be, has received the prior approval of the Minister of Finance. Certain Crown corporations located within the Province are separately authorized to provide guarantees of the debt of others. Such guarantees are not contingent liabilities of the General Revenue Fund, and the amounts so guaranteed are not included in the above table or in the financial statements of the General Revenue Fund.

The Government of Saskatchewan provided Royal Trust with a guarantee and indemnity in 1983 respecting the liability and obligations of CIC Mineral Interest Corporation pursuant to each of two lease agreements of CIC Mining Corporation (previously the Potash Corporation of Saskatchewan Mining Limited) for the purchase of mining equipment. The Government has been released from all such guarantees but remains contingently liable for indemnity related to damages caused by the equipment and provisions governing the payment of taxes for the period during which its guarantees to Royal Trust were in place.

Debt Record

The Government has always paid the full face amount of the principal of and interest on every direct obligation issued by it and every indirect obligation on which it has been required to meet its guarantee, all promptly when due in the lawful currency of the country where payable at the time of payment thereof, subject during wartime to any applicable laws and regulations forbidding trading with the enemy.

Other Public Sector Debt

The General Revenue Fund financial statements do not disclose the debt of all public entities located within the Province. Responsibility for a variety of provincial functions and powers has been transferred to local government bodies, including regional health authorities, municipalities, school boards and certain other local authorities. Regional health authorities may raise money for their purposes through certain service charges. The authorities have power to borrow money up to a prescribed amount above which the approval of the Minister of Health is required. Other local bodies raise money for their purposes, in the case of municipalities by way of direct levy on persons or property within their jurisdiction or, in other cases, by requisition on municipalities, and may have power to borrow money, subject to the approval of the Saskatchewan Municipal Board. The Saskatchewan Municipal Board is an autonomous regulatory body established by Provincial statute with broad powers to regulate local government activity.

Notwithstanding that significant financial assistance for operating and capital expenditures is made available to local government bodies by appropriation of the Legislative Assembly, the activities of local government bodies, including borrowing, are conducted independently of the Government. The Government is not directly or contingently liable for debt incurred by these bodies (with the exception of certain debt of certain regional health authorities), and, relative to the gross debt of the General Revenue Fund and the GDP of the Province, debt incurred by these bodies is not significant.

GENERAL REVENUE FUND SUPPLEMENTARY FINANCIAL INFORMATION
			Page

	I.	General Revenue Fund Statement of Financial Position		34

II.		General Revenue Fund Statement of Operations and Accumulated Deficit		36

III.		General Revenue Fund Statement of Change in Net Debt		39

IV.		General Revenue Fund Statement of Investing Activities		40

	V.	General Revenue Fund Statement of Cash Flow		42

VI.		General Revenue Fund Notes to the Financial Statements		43

The information contained in the following tables and notes, except for information marked as unaudited, has been derived from the financial statements of the General Revenue Fund, which have been examined by the Provincial Auditor for the five years ended March 31, 2012.

Government of the Province of Saskatchewan

General Revenue Fund Statement of Financial Position1-9

	At March 31

		2008			2009			2010			2011			2012
		(restated)
		(Thousands of dollars)
Financial Assets

Cash and temporary investments		$	821,475		$	575,895		$	858,427		$	457,912		$	241,429
Accounts receivable			736,377			915,389			855,117			857,866			1,044,887
Deferred charges			19,236			14,166			9,775			7,128			3,729
Loans to Crown corporations 9			461,161			520,229			818,751			609,044			556,767
Other loans			129,635			122,454			100,168			91,165			92,131
Equity investment in Crown Investments
Corporation of Saskatchewan			1,181,152			1,051,152			1,051,152			1,058,889			1,058,889
Total Financial Assets			3,349,036			3,199,285			3,693,390			3,082,004			2,997,832

Liabilities

Accounts payable and accrued liabilities			1,653,449			1,721,516			1,896,708			1,513,501			1,376,712
Deposits held			385,388			594,355			396,122			403,672			709,881
Unearned revenue			72,823			76,454			75,642			91,323			100,387
Public Debt 9
Government general debt			6,824,323			4,145,286			4,140,482			4,135,226			3,807,590
Crown corporation general debt 9			461,161			520,229			818,751			609,044			556,767
Unamortized foreign exchange gain (loss)			606			(10,503	)		3,939			5,231			6,371
Total Liabilities			9,397,750			7,047,337			7,331,644			6,757,997			6,557,708

Net Debt			(6,048,714	)		(3,848,052	)		(3,638,254	)		(3,675,993	)		(3,559,876	)

Non-financial Assets
Prepaid expenses			6,685			6,902			7,004			11,435			13,789
Inventories held for consumption			85,269			97,345			109,411			120,652			124,096
Tangible capital assets 8			2,596,969			2,772,877			2,975,411			3,045,147			3,275,566
Total Non-financial Assets			2,688,923			2,877,124			3,091,826			3,177,234			3,413,451

Accumulated Deficit		$	(3,359,791	)	$	(970,928	)	$	(546,428	)	$	(498,759	)	$	(146,425	)

The Government also prepares summary financial statements. The Government's summary financial statements provide a full accounting of the financial affairs and resources of all entities for which the Government is responsible. The financial transactions of the General Revenue Fund and provincial Crown corporations, agencies, boards, and commissions are included in the Government's summary financial statements. The Government's summary financial statements are included in Exhibit (e) Volume 1 of the Public Accounts.

In her opinion on the 2008, 2009, 2010, 2011 and 2012 General Revenue Fund financial statements, the Provincial Auditor directs the reader to refer to the Government's summary financial statements to understand and assess the Government's management of public financial affairs and resources as a whole.

The General Revenue Fund’s financial statements for 2008 are accompanied by a report of the Provincial Auditor which provides that, except for the effects of the following reservations, the financial statements present fairly, in all material respects, the financial position of the General Revenue Fund as at March 31:

It is the auditor’s opinion that pension liabilities should be recorded in the financial statements. Had pension liabilities been recorded, liabilities and accumulated deficit would increase by $5,088 million and, for the year, expenses would increase and surplus would decrease by $429 million.

The Government records transactions between the General Revenue Fund and the Fiscal Stabilization Fund and the Saskatchewan Infrastructure Fund as revenue or expense of the General Revenue Fund. It is the auditor’s opinion that, instead of recording an expense, the financial statements should record an asset equal to the amount it owed or paid to these funds. Had this been done, financial assets would increase and accumulated deficit would decrease by $1,634 million, and, for the year, transfer to the Fiscal Stabilization Fund would decrease and surplus would increase by $641 million.

The General Revenue Fund’s financial statements for 2009 are accompanied by a report of the Provincial Auditor which provides that, except for the effects of the following reservations, the financial statements present fairly, in all material respects, the financial position of the General Revenue Fund as at March 31:

It is the auditor’s opinion that pension liabilities should be recorded in the financial statements. Had pension liabilities been recorded, liabilities and accumulated deficit would increase by $5,442 million and, for the year, expenses would increase and surplus would decrease by $355 million.

The Government records transactions between the General Revenue Fund and the Growth and Financial Security Fund as revenue and expense of the General Revenue Fund. It is the auditor’s opinion that, instead of recording an expense, the financial statements should record an asset equal to the amount it owed or paid to these funds. Had this been done, financial assets would increase and accumulated deficit would decrease by $1,215 million, and, for the year, the net transfer from the Growth and Financial Security Fund and surplus would decrease by $419 million.

The General Revenue Fund’s financial statements for 2010 are accompanied by a report of the Provincial Auditor which provides that, except for the effects of the following reservations, the financial statements present fairly, in all material respects, the financial position of the General Revenue Fund as at March 31:

It is the auditor’s opinion that the liabilities of several pension plans and a disability benefit plan should be recorded in the financial statements. Had these liabilities been recorded, liabilities and accumulated deficit would increase by $5,783 million and, for the year, expenses would increase and surplus would decrease by $341 million.

The Government records transactions between the General Revenue Fund and the Growth and Financial Security Fund as revenue and expense of the General Revenue Fund. It is the auditor’s opinion that, instead of recording an expense, the financial statements should record an asset equal to the amount it owed or paid to this fund. Had this been done, financial assets would increase and accumulated deficit would decrease by $958 million, and, for the year, the net transfer from the Growth and Financial Security Fund and surplus would decrease by $257 million.

The General Revenue Fund’s financial statements for 2011 are accompanied by a report of the Provincial Auditor which provides that, except for the effects of the following reservations, the financial statements present fairly, in all material respects, the financial position of the General Revenue Fund as at March 31:

It is the auditor’s opinion that pension liabilities and a disability benefit liability should be recorded in the financial statements. Had pension liabilities and disability benefit liabilities been recorded, liabilities and accumulated deficit would increase by $6,024 million and, for the year, expenses would increase and surplus would decrease by $241 million.

The Government records transactions between the General Revenue Fund and the Growth and Financial Security Fund as revenue and expense of the General Revenue Fund. It is the auditor’s opinion that, instead of recording an expense, the financial statements should record an asset equal to the amount it owed or paid to this fund. Had this been done, financial assets would increase and accumulated deficit would decrease by $1,006 million, and for the year, the net transfer to the Growth and Financial Security Fund would decrease and surplus would increase by $48 million.

The General Revenue Fund’s financial statements for 2012 are accompanied by a report of the Provincial Auditor which provides that, except for the effects of the following reservations, the financial statements present fairly, in all material respects, the financial position of the General Revenue Fund as at March 31:

It is the auditor’s opinion that pension liabilities and a disability benefit liability should be recorded in the financial statements. Had pension liabilities and disability benefit liabilities been recorded, liabilities and accumulated deficit would increase by $6,124 million and, for the year, expenses would increase and surplus would decrease by $100 million.

The Government records transactions between the General Revenue Fund and the Growth and Financial Security Fund as revenue and expense of the General Revenue Fund. It is the auditor’s opinion that, instead of recording an expense, the financial statements should record an asset equal to the amount it owed or paid to these funds. Had this been done, financial assets would increase and accumulated deficit would decrease by $708 million, and, for the year, the net transfer from the Growth and Financial Security Fund and surplus would decrease by $298 million.

8	During 2008-09, the Government reclassified agricultural land held for resale as tangible capital assets because this land is not expected to be sold within the next year. The 2007-08 amounts have been restated.

9	During 2008-09, the Government made a change in accounting policy resulting in loans to Crown corporations and public debt (gross debt net of sinking funds) now being presented net of government business enterprise specific debt. The 2007-08 amounts have been restated.

(see accompanying notes)

Government of the Province of Saskatchewan

General Revenue Fund Statement of Operations and Accumulated Deficit1

	For the Year Ended March 31

		2008		2009		2010			2011		2012
		(restated)
		(Thousands of dollars)
Revenue

Taxation
Corporation income		$	673,641	$	591,930	$	881,424		$	1,155,273	$	793,790
Fuel			406,434		429,162		441,533			463,147		475,452
Individual income			1,938,258		1,844,226		1,890,848			1,795,788		1,897,409
Provincial sales			929,865		1,108,628		1,084,001			1,186,992		1,322,161
Tobacco			190,412		199,072		196,868			237,507		242,853
Other			279,633		257,977		237,599			292,935		303,642
Total Taxation			4,418,243		4,430,995		4,732,273			5,131,642		5,035,307
Non-renewable Resources
Crown land sales			419,062		928,245		151,455			466,993		235,507
Natural gas			133,780		125,922		40,078			29,741		17,389
Oil			1,246,205		1,616,071		1,294,670			1,274,053		1,528,808
Potash			432,770		1,364,463		(183,887	)		262,540		438,372
Resource surcharge			315,230		458,299		475,632			360,848		452,807
Other			93,299		119,408		132,676			133,624		149,074
Total Non-renewable Resources			2,640,346		4,612,408		1,910,624			2,527,799		2,821,957
Transfers from Government Entities
Crown Investments Corporation of Saskatchewan			200,000		0		185,000			266,000		110,000
- Special dividend			0		365,000		570,000			213,500		130,000
Liquor and Gaming Authority			399,531		446,652		429,924			437,063		465,917
Other enterprises and funds			53,623		39,564		64,172			48,119		75,628
Total Transfers from Government Entities			653,154		851,216		1,249,096			964,682		781,545
Other Own-source Revenue
Fines, forfeits and penalties			11,225		11,448		13,219			13,170		14,722
Interest, premiums, discounts and exchange 2, 3			120,502		187,957		237,372			209,704		241,336
Motor vehicle fees			140,631		151,143		158,303			161,093		173,151
Other licences and permits			35,927		36,607		34,587			29,425		25,414
Sales, services and service fees			94,936		101,885		110,555			132,073		132,039
Transfers from other governments			15,107		15,010		18,421			15,791		17,163
Commercial operations			78,664		86,567		87,771			91,874		99,511
Other 4			54,382		130,872		110,204			183,177		51,908
Total Other Own-source Revenue			551,374		721,489		770,432			836,307		755,244
Total Own-source Revenue			8,263,117		10,616,108		8,662,425			9,460,430		9,394,053
Transfers from the Federal Government
Canada Health Transfer			739,648		823,496		819,262			795,422		846,771
Canada Social Transfer			325,098		338,301		334,976			342,626		352,420
Equalization			226,146		0		0			0		0
Other			311,669		547,167		449,795			462,200		527,187
Total Transfers from the Federal Government			1,602,561		1,708,964		1,604,033			1,600,248		1,726,378

Total Revenue		$	9,865,678	$	12,325,072	$	10,266,458		$	11,060,678	$	11,120,431

(see accompanying notes)

Government of the Province of Saskatchewan

General Revenue Fund Statement of Operations and Accumulated Deficit (continued)

	For the Year Ended March 31

		2008		2009		2010		2011		2012
		(restated)
		(Thousands of dollars)
Expense

Ministries and Agencies
Advanced Education, Employment and Immigration 5		$	685,163	$	893,291	$	866,110	$	935,426	$	859,199
Agriculture			302,197		424,396		373,246		482,306		439,632
Corrections, Public Safety and Policing			305,417		315,083		340,314		390,156		517,971
Corrections, Public Safety and Policing
- commercial operations			0		0		0		0		2,383
Crown Investments Corporation of Saskatchewan			0		240,000		0		0		0
Education			959,951		1,307,461		1,334,346		1,363,639		1,564,240
Energy and Resources			56,268		37,946		40,546		77,621		36,794
Enterprise and Innovation Programs			54,040		54,618		22,497		24,114		24,578
Enterprise Saskatchewan			0		6,087		45,406		39,586		41,303
Environment			174,921		177,129		172,304		213,895		200,169
Executive Council			12,562		8,293		8,478		11,629		11,623
Finance			284,463		290,832		326,558		314,102		358,237
Finance Debt Servicing 2			546,718		520,181		479,962		424,334		411,957
First Nations and Metis Relations			70,958		86,526		86,842		71,630		78,576
Government Services			8,654		12,738		15,215		10,972		9,666
Government Services - commercial operations			70,312		81,180		82,030		83,868		80,683
Health			3,504,333		3,976,241		3,934,231		4,547,793		4,400,159
Highways and Infrastructure			353,684		482,400		418,279		427,471		443,479
Highways and Infrastructure - commercial operations			6,542		2,892		3,281		5,925		14,061
Information Technology Office			5,362		5,384		11,834		16,744		20,921
Information Technology Office - commercial operations			27		1,630		1,574		1,931		2,110
Innovation Saskatchewan			0		0		0		9,818		3,467
Intergovernmental Affairs			2,757		3,519		3,295		0		0
Justice and Attorney General			129,189		135,648		145,293		145,871		149,632
Labour Relations and Workplace Safety			0		0		0		0		16,948
Municipal Affairs			214,871		397,388		409,956		363,669		374,946
Office of the Provincial Capital Commission			0		0		0		10,166		10,957
Office of the Provincial Secretary			2,750		4,401		4,879		3,466		3,133
Public Service Commission			39,234		35,182		50,229		36,238		37,050
Saskatchewan Research Council			8,992		12,082		15,016		16,633		18,133
Social Services			615,032		676,604		740,087		795,778		787,314
Tourism, Parks, Culture and Sport			125,309		130,726		129,703		102,289		91,715

Legislative Assembly and its Officers
Chief Electoral Officer			10,852		1,166		1,679		2,023		16,341
Children's Advocate			1,624		1,529		1,628		1,648		1,922
Conflict of Interest Commissioner			136		145		143		298		128
Information and Privacy Commissioner			675		812		874		964		1,131
Legislative Assembly			21,389		22,429		23,295		23,081		24,186
Ombudsman			1,911		2,085		2,152		2,228		2,885
Provincial Auditor			6,516		7,115		7,471		8,028		8,134

Total Expense			8,582,809		10,355,139		10,098,753		10,965,340		11,065,763

Government of the Province of Saskatchewan

General Revenue Fund Statement of Operations and Accumulated Deficit (concluded)

	For the Year Ended March 31

		2008			2009			2010			2011			2012
		(restated)
		(Thousands of dollars)

Pre-transfer Surplus			1,282,869			1,969,933			167,705			95,338			54,668
Transfer to the Growth and Financial Security Fund			0			(984,967	)		(83,853	)		(47,669	)		(27,334	)
Transfer from the Growth and Financial Security Fund			0			1,403,897			340,648			0			325,000
Transfer to the Fiscal Stabilization Fund			(641,434	)		0			0			0			0

Surplus		$	641,435		$	2,388,863		$	424,500		$	47,669		$	352,334

Accumulated Deficit, Beginning of Year			(4,001,226	)		(3,359,791	)		(970,928	)		(546,428	)		(498,759	)


Accumulated Deficit, End of Year		$	(3,359,791	)	$	(970,928	)	$	(546,428	)	$	(498,759	)	$	(146,425	)

1	See Notes 1-9 commencing on page 34.
2	During 2008-09, the Government made a change in accounting policy resulting in reimbursements of interest from Crown corporation general debt no longer being netted against debt servicing costs. The 2007-08 amounts have been restated.
3	Includes gains on investment sales of $127.6 million (2011 - $69.2 million).
4	Includes reversals and refunds of prior year expenses of $21.6 million (2011 - $151.8 million).
5	For 2011, Advanced Education, Employment and Immigration includes expenses for which administration has been tranferred to the Ministry of Labour Relations and Workplace Safety and the Ministry of Social Services.

(See accompanying notes)

Government of the Province of Saskatchewan

General Revenue Fund Statement of Change in Net Debt 1


	For the year ended March 31

		2008			2009			2010			2011			2012
	(restated)
		(Thousands of dollars)

Surplus		$	641,435		$	2,388,863		$	424,500		$	47,669		$	352,334

Tangible Capital Assets
Acquisitions 2			(284,657	)		(349,349	)		(388,541	)		(390,042	)		(411,951	)
Amortization			146,621			151,521			160,175			179,522			174,971
Net (gain) loss on disposal 2			931			5,153			(13,284	)		(7,138	)		(7,521	)
Net transfers to (from) government organizations			(1,163	)		(1,341	)		(1,396	)		127,737			(682	)
Proceeds on disposal 2			6,765			7,082			40,332			19,914			14,304
Write downs			1,499			11,026			180			271			460
Net Acquisition of Tangible Capital Assets			(130,004	)		(175,908	)		(202,534	)		(69,736	)		(230,419	)

Other Non-financial Assets
Net acquisition of prepaid expenses			(386	)		(217	)		(102	)		(4,431	)		(2,354	)
Net acquisition of inventories held for consumption			(10,643	)		(12,076	)		(12,066	)		(11,241	)		(3,444	)
Net Acquisition of Other Non-financial Assets			(11,029	)		(12,293	)		(12,168	)		(15,672	)		(5,798	)

Decrease (increase) in net debt			500,402			2,200,662			209,798			(37,739	)		116,117
Net Debt, beginning of year			(6,445,669	)		(6,048,714	)		(3,848,052	)		(3,638,254	)		(3,675,993	)
Adjustment to net debt 2			(103,447	)		0			0			0			0
Net Debt, End of Year		$	(6,048,714	)	$	(3,848,052	)	$	(3,638,254	)	$	(3,675,993	)	$	(3,559,876	)

1	See Notes 1-9 commencing on page 34.
2	During 2008-09, the Government reclassified agricultural land held for resale as tangible capital assets because this land is not expected to be sold within the next year. The 2007-08 amounts have been restated.

(see accompanying notes)

Government of the Province of Saskatchewan

General Revenue Fund Statement of Investing Activities 1

	For the Year Ended March 31

		2008		2009		2010		2011		2012
		(restated)
		(Thousands of dollars)
Receipts

Loans

Information Services Corporation of Saskatchewan		$	11,000	$	3,919	$	0	$	0	$	13,547
Investment Saskatchewan Inc.			7,000		0		0		0		0
Municipal Financing Corporation of Saskatchewan 2			4,946		0		0		107		0
Saskatchewan Crop Insurance Corporation			15,800		50,000		50,000		0		0
Saskatchewan Housing Corporation			0		31,000		0		0		0
Saskatchewan Opportunities Corporation			0		17,985		2,760		11,099		0
Saskatchewan Power Corporation 2			0		125,000		0		300,000		0
Saskatchewan Telecommunications
Holding Corporation 2			0		0		0		29,500		0
Saskatchewan Water Corporation			1,496		2,491		0		8,563		0
SaskEnergy Incorporated 2			0		48,000		0		0		70,000
Other			55,883		54,440		62,217		59,498		57,662

Total Loan Receipts			96,125		332,835		114,977		408,767		141,209

Sinking Funds

Contributions 2			28,522		20,261		4,644		5,436		5,828
Redemptions 2			0		81,635		892,655		502,972		96,992

Total Sinking Fund Receipts			28,522		101,896		897,299		508,408		102,820

Other Investing Activities
Equity investment in Crown Investments
Corporation of Saskatchewan			0		130,000		0		120,000		0
Total Other Investing Activities			0		130,000		0		120,000		0

Total Receipts		$	124,647	$	564,731	$	1,012,276	$	1,037,175	$	244,029

(see accompanying notes)

Government of the Province of Saskatchewan

General Revenue Fund Statement of Investing Activities (concluded)

	For the Year Ended March 31

		2008			2009			2010		2011		2012
		(restated)
		(Thousands of dollars)
Disbursements

Loans

Information Services Corporation of Saskatchewan		$	0		$	0		$	0	$	0	$	9,935
Municipal Financing Corporation of Saskatchewan 2			0			1,062			5,294		0		8,593
Saskatchewan Opportunities Corporation			13,844			23,684			0		13,000		0
Saskatchewan Power Corporation 2			165,000			100,000			260,000		0		0
Saskatchewan Telecommunications
Holding Corporation 2			0			28,900			600		0		14,200
Saskatchewan Water Corporation			7,600			5,000			10,892		9,000		7,749
SaskEnergy Incorporated 2			60,500			170,000			32,500		125,000		0
Other			63,954			48,158			43,300		50,319		57,172

Total Loan Disbursements			310,898			376,804			352,586		197,319		97,649

Sinking Funds
Contributions 2			96,415			1,913,015			64,558		60,045		52,546
Redemptions 2			0			32,793			48,993		0		0
Total Sinking Fund Disbursements			96,415			1,945,808			113,551		60,045		52,546

Total Disbursements		$	407,313		$	2,322,612		$	466,137	$	257,364	$	150,195

Net Receipts (Disbursements)		$	(282,666	)	$	(1,757,881	)	$	546,139	$	779,811	$	93,834

1	See Notes 1-9 commencing on page 34.
2	During 2008-09, the Government made a change in accounting policy resulting in loans to Crown corporations and public debt (gross debt net of sinking funds) now being presented net of government business enterprise specific debt and related sinking funds. Also, receipts on redemptions of sinking funds for Crown corporation general debt are no longer netted. The 2007-08 amounts have been restated.

(see accompanying notes)

Government of the Province of Saskatchewan
General Revenue Fund Statement of Cash Flow 1

	For the Year Ended March 31

		2008			2009			2010			2011			2012
		(restated)
		(Thousands of dollars)
Operating Activities

Surplus		$	641,435		$	2,388,863		$	424,500		$	47,669		$	352,334

Non-cash items included in surplus			111,831			94,061			(10,122	)		23,472			1,268
Net change in non-cash operating activities			228,384			(114,537	)		226,875			(383,300	)		(317,145	)

Cash (Used for) Provided by Operating Activities			981,650			2,368,387			641,253			(312,159	)		36,457

Capital Activities
Acquisition of tangible capital assets 2			(284,657	)		(349,349	)		(388,541	)		(390,042	)		(411,951	)
Proceeds on disposal of tangible capital assets 2			6,765			7,082			40,332			19,914			14,304
Cash Used for Capital Activities			(277,892	)		(342,267	)		(348,209	)		(370,128	)		(397,647	)

Investing Activities

Loan Advances 3			(310,898	)		(376,804	)		(352,586	)		(197,319	)		(97,649	)
Loan Repayments 3			96,125			332,835			114,977			408,767			141,209
Sinking Funds
Contributions for general debt 3			(96,415	)		(1,913,015	)		(64,558	)		(60,045	)		(52,546	)
Contributions received for
Crown corporation general debt 3			28,522			20,261			4,644			5,436			5,828
Redemptions for general debt 3			0			81,635			892,655			502,972			96,992
Redemptions disbursed for
Crown corporation general debt 3			0			(32,793	)		(48,993	)		0			0
Equity investment in Crown Investments
Corporation of Saskatchewan			0			130,000			0			120,000			0

Cash Provided by (Used for) Investing Activities			(282,666	)		(1,757,881	)		546,139			779,811			93,834

Financing Activities
Proceeds from general debt 3			558,138			32,005			508,629			182,719			80,200
Repayment of general debt 3			(646,719	)		(754,791	)		(867,047	)		(688,308	)		(335,536	)
Increase (Decrease) in deposits held			74,495			208,967			(198,233	)		7,550			306,209

Cash Provided by (Used for) Financing Activities			(14,086	)		(513,819	)		(556,651	)		(498,039	)		50,873

Increase (Decrease) in Cash and
Temporary investments			407,006			(245,580	)		282,532			(400,515	)		(216,483	)
Cash and temporary investments,
beginning of year			414,469			821,475			575,895			858,427			457,912

Cash and Temporary Investments,
End of Year		$	821,475		$	575,895		$	858,427		$	457,912		$	241,429

1	See Notes 1-9 commencing on page 34.
2	During 2008-09, the Government reclassified agricultural land held for resale as tangible capital assets because this land is not expected to be sold within the next year.
3	During 2008-09, the Government made a change in accounting policy resulting in loans to Crown corporations and public debt (gross debt net of sinking funds) now being presented net of government business enterprise specific debt. The 2007-08 amounts have been restated.

(see accompanying notes)

Government of the Province of Saskatchewan

General Revenue Fund Notes to the Financial Statements

As at March 31, 2012

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 (2008 – transfers to and from the Fiscal Stabilization 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 revolving funds, 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.

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 eligibility criteria are 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.

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.

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. Discounts, premiums 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 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 eligibility criteria are met.

2. 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 $2,691.2 million (2011 - $2,951.1 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 $1,546.2 million (2011 - $1,303.8 million) because of price and production sensitivities in the royalty revenue structures;

●	in resource surcharge non-renewable resource revenue of $452.8 million (2011 - $360.8 million) because the final valuation of resource sales may differ from initial estimates on which instalments are based;

●	in potash non-renewable resource revenue of $438.4 million (2011 - $262.5 million) because actual operating profits may differ from initial estimates;

●	in the Canada Health Transfer and Canada Social Transfer revenue of $1,199.2 million (2011 - $1,138.0 million) because of changes in the economic and demographic conditions in the Province and the country;

●	in agricultural income stability programs expense of $83.4 million (2011 - $141.2 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 $6,114.4 million (2011 - $6,004.6 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.

3. Temporary Investments

The temporary investments are recorded at $110.8 million (2011 - $459.8 million), consist of investment grade money market securities and are generally for less than 30 days. Due to the short-term nature, market value approximates cost.

4. 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 predominately 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 (2011 - $66.0 million). At March 31, 2012, 83.0 per cent (2011 – 90.3 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 $1,854.1 million (2011 - $1,027.1 million). A one percentage point increase in interest rates would decrease the surplus by $13.8 million in 2011-12.

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, 2012, 97.5 per cent (2011 – 97.5 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, 2012 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 totaling 1,225.0 million U.S. dollars (2011 – 1,225.0 million) fully hedged to $1,619.3 million Canadian (2011 - $1,619.3 million);

●	debentures totaling 300.0 million Swiss francs (2011 – 300.0 million) fully hedged to $274.7 million Canadian (2011 - $274.7 million); and

●	interest payments on debentures of 275.0 million U.S. dollars (2011 - 275.0 million) hedged to Canadian dollars at an exchange rate of 1.2325 (2011 – 1.2325).

In total, there are cross currency swaps on a notional value of debt of $2,507.5 million (2011 - $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, 2012, 100 per cent (2011 – 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.

5. 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.

Information on the defined benefit plans is as follows:


	2012										2011
	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		1,211		447			54			1,712		2,177
Average age of active members (years)		58.0		58.0			58.4			58.0		56.6
Number of former members entitled to deferred pension benefits		4,410		88			9			4,507		4,687
Number of superannuates and surviving spouses		11,407		5,718			2,259			19,384		19,227
Actuarial valuation date	June 30/11		Dec.31/11			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)		5.00		n/a			5.50-5.85			n/a		n/a
Discount rate (percentage)		3.50		3.60			3.30-4.00			n/a		n/a
Inflation rate (percentage)		2.50		2.50			2.50			n/a		n/a
Expected average remaining service life (years)		3.5		0.3			0.9-7.1			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, 2012, 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)	2012												2011
	TSP1			PSSP			Others			Total			Total

Accrued benefit obligation,
beginning of year		5,118,905			1,910,768			331,728			7,361,401			7,373,859
Current period benefit cost		28,818			5,002			5,435			39,255			49,179
Interest cost		241,003			87,047			14,968			343,018			361,062
Actuarial losses		741,338			209,136			43,804			994,278			44,766
Benefit payments		(333,480	)		(126,456	)		(22,764	)		(482,700	)		(467,465	)
Accrued Benefit Obligation, End of Year		5,796,584			2,085,497			373,171			8,255,252			7,361,401
Plan assets, beginning of year		1,018,566			0			198,814			1,217,380			1,369,418
Employer contributions		142,367			125,311			6,151			273,829			214,467
Employee contributions		6,692			1,145			550			8,387			11,508
Return on plan assets		56,789			0			24,279			81,068			83,238
Actuarial (losses) gains		(139,770	)		0			9,470			(130,300	)		6,214
Benefit payments		(333,480	)		(126,456	)		(22,764	)		(482,700	)		(467,465	)
Plan Assets, End of Year 2		751,164			0			216,500			967,664			1,217,380
		5,045,420			2,085,497			156,671			7,287,588			6,144,021
Unamortized estimation adjustments 3		(930,097	)		(220,437	)		(22,609	)		(1,173,143	)		(139,462	)
Total Pension Liabilities 4		4,115,323			1,865,060			134,062			6,114,445			6,004,559

1																				The TSP had an actual rate of return on plan assets of 1.7 per cent (2011 - 10.8 per cent)
2																				At March 31, 2012, the market value of plan investments was $962.3 million (2011 - $1,114.3 million). Of this amount, 44.6 per cent (2011 - 42.7 per cent) was invested in fixed income securities and 42.1 per cent (2011 - 44.9 per cent) in equity investments.
3																				Unamortized estimation adjustments are amortized against the net obligation over periods ranging from 3.5 to 4.0 years for the TSP, from 0.3 to 1.5 years for the PSSP, and from 0.9 to 10 years for the other plans. These represent the expected average remaining service life of active plan members at the time the estimation adjustments arose.
4																				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 $697.5 million and $258.0 million increase in the pension liabilities for the TSP and the PSSP respectively, and a one percentage point increase would result in a $571.7 million and $213.1 million decrease in the pension liabilities for the TSP and the PSSP respectively.

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:

	2012							2011
	PEPP			STRP 1		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		25,454			n/a		25,454		25,382
General Revenue Fund participation
Number of active members		11,854			n/a		11,854		11,956
Member contributions (thousands of dollars)		54,776			n/a		54,776		52,784
Government contributions (thousands of dollars)		57,503			67,483		124,986		118,038

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)	2012		2011


Defined benefit plans		273,829		214,467
Defined contribution plans		124,986		118,038

Total Pension Expense		398,815		332,505

Other Employee Future Benefits

The Government provides long-term disability benefits to members of the TSP. The disability benefit plan liability of $9.6 million (2011 - $19.2 million) is not recorded in the financial statements. The benefit expense on a cash basis is $3.7 million (2011 - $4.6 million).

6. Contingencies

Guaranteed debt

The Minister of Finance has guaranteed the debt of others of $93.9 million (2011 - $35.4 million).

Lawsuits

The Government is involved in various legal actions, the outcome of which is not determinable. Up to $392.6 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 funding and various other legal actions.

7. Contractual Obligations

Operating and capital lease obligations are as follows:


(thousands of dollars)	Operating		Capital

Future minimum lease payments
2012-13		43,753		5,749
2013-14		38,486		3,764
2014-15		32,593		3,268
2015-16		24,154		2,956
2016-17		17,589		2,510
Thereafter		70,035		31,681
		226,610		49,928
Interest and executory costs		0		(27,705	)
Total Lease Obligations		226,610		22,223

Significant other contractual obligations include:

●	contracts for the construction and acquisition of tangible capital assets of $401.3 million over the next four years;

●	computer and satellite service agreements of $122.6 million over the next six years;

●	research and development projects for agriculture technology and opportunities in the agri-food industry of $27.7 million over the next five years;

●	beverage container collection and recycling programs of $87.8 million over the next four years; and,

●	rural municipality and school division tax loss compensation of approximately $12.6 million as land achieves reserve status over the course of the agreements.

8. 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 $5,152.6 million (2011 - $5,272.4 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 $24.8 million (2011 - $23.8 million);

●	payments to Saskatchewan Research Council of approximately $32.7 million (2011 - $11.5 million) for environmental remediation costs; and

●	taxation and non-renewable resource revenue received from related parties during 2011-12 of approximately $113.8 million (2010-11 - $105.2 million). In addition, Saskatchewan Provincial Sales Tax and Fuel Tax are received from related parties on all taxable purchases.

9. 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)	2012		2011

Pension plans		7,809,106		7,788,957
Public Guardian and Trustee of Saskatchewan		163,730		158,830
Other		81,900		65,468
Total Trust Fund Assets 1		8,054,736		8,013,255

1	Amounts are based on the latest financial statements of the funds closest to March 31, 2012, where available.

10. 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		2,861,032		2,861,032
Surplus for the year		382,517		352,334
Debt Retirement Fund, End of Year		3,243,549		3,213,366

11. Comparative Figures

Certain of the 2011 figures have been reclassified to conform with the current year presentation. With regard to expenses, the figures are reported on the same basis as the Estimates for the prior year.

DETAIL OF GENERAL REVENUE FUND DEBT

As at March 31, 2012 (unaudited)

A. Term Debt Issued to the Public

Date of Issue	Date of Maturity	Interest Rate %	Currency	$ Amount Outstanding

July 15/07	July 15/12	4.20	Canadian	174,808,200
(Redeemable annually at the option of the holder or at any time on the death of the holder; the Province reserves the right to increase the interest rate after July 14, 2008)

September 20/02	December 3/12	5.25	Canadian	350,000,000
(Non Callable; annual sinking fund)

February 2/93	February 1/13	7.613	Canadian	568,212,000
(The original 8% $400,000,000 U.S. debentures have been swapped into Canadian dollars at an interest rate of 7.613%; Non Callable; annual sinking fund)

June 17/03	June 17/13	4.75	Canadian	200,000,000
(Non Callable; annual sinking fund)

July 20/93	July 15/13	7.753	Canadian	228,639,500
		7.809	Canadian	97,147,500
		7.375	U.S.	50,000,000
($175,000,000 and $75,000,000 U.S. of the 7.375% debenture issue have been swapped into Canadian dollars at an interest rate of 7.753% and 7.809% respectively. Interest payments on the remaining $50,000,000 U.S. have been swapped into Canadian dollars at an interest rate of 7.912%; Non Callable; annual sinking fund)

July 15/08	July 15/13	2.50	Canadian	2,648,600
(Redeemable annually at the option of the holder or at any time on the death of the holder; the Province reserves the right to increase the interest rate after July 14, 2009)

September 30/03	December 3/13	4.90	Canadian	200,000,000
(Non Callable; annual sinking fund)

March 14/91	April 10/14	10.25	Canadian	583,916,000
(Non Callable; annual sinking fund)

June 22/04	June 3/14	5.25	Canadian	300,000,000
(Non Callable; annual sinking fund)

July 15/09	July 15/14	1.00	Canadian	1,669,400
(Redeemable annually at the option of the holder or at any time on the death of the holder; the Province reserves the right to increase the interest rate after July 14, 2010)

June 3/05	December 3/15	4.25	Canadian	200,000,000
(Non Callable; annual sinking fund)

November 15/05	January 15/16	4.305	Canadian	274,654,700
(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; annual sinking fund)

August 23/06	August 23/16	4.50	Canadian	300,000,000
(Non Callable; annual sinking fund)

September 17/96	September 17/16	8.09	Canadian	7,888,000
(Non Callable; Serial Note payable in annual instalments)

September 5/07	September 5/17	4.65	Canadian	200,000,000
(Non Callable; annual sinking fund)

June 17/04	June 17/19	5.50	Canadian	33,000,000
(After June 17, 2014, this note pays interest at the three month BA rate less 0.245%; Non Callable; annual sinking fund)

August 03/04	June 17/19	5.50	Canadian	26,000,000
(Non Callable; Canadian Medium Term Note)

Date of Issue	Date of Maturity	Interest Rate %	Currency	$ Amount Outstanding

July 28/10	July 28/20	3.90	Canadian	300,000,000
(Non Callable; annual sinking fund)

December 20/90	December 15/20	9.653	Canadian	65,972,500
		10.08	Canadian	126,600,000
		9.965	Canadian	128,797,500
		9.375	U.S.	45,000,000
($55,000,000, $100,000,000 and $100,000,000 U.S. of the 9.375% debenture issue has been swapped into Canadian dollars at an interest rate of 9.653%, 10.08% and 9.965% respectively; Interest payments on the remaining 45,000,000 U.S. have been swapped into Canadian dollars at an interest rate of 9.653%. Non Callable; annual sinking fund)

February 26/91	February 15/21	9.254	Canadian	147,600,000
		9.125	U.S.	80,000,000
($120,000,000 U.S. of this debenture has been swapped into Canadian dollars at an interest rate of 9.254%. Interest payments on the remaining $80,000,000 U.S. have been swapped into Canadian dollars at an interest rate of 9.254%; Non Callable; annual sinking fund)

February 4/92	February 4/22	9.60	Canadian	255,000,000
(Non Callable; annual sinking fund)

July 21/92	July 15/22	8.942	Canadian	256,320,000
		8.50	U.S.	100,000,000
($200,000,000 U.S. of the 8.5% debentures have been swapped into Canadian dollars at an interest rate of 8.942%. Interest payments on the remaining $100,000,000 have been swapped into 8.497%; Non Callable; annual sinking fund)

May 30/95	May 30/25	8.75	Canadian	175,000,000
(Non Callable; annual sinking fund)

December 4/98	March 5/29	5.75	Canadian	350,000,000
(Non Callable; annual sinking fund)

March 24/99	March 05/29	5.60	Canadian	60,000,000
(Non Callable; annual sinking fund)

February 17/00	January 25/30	6.25	Canadian	25,000,000
(Non Callable; annual sinking fund)

January 25/00	January 25/30	6.35	Canadian	199,995,000
(Non Callable; annual sinking fund)

December 10/01	September 5/31	6.40	Canadian	550,000,000
(Non Callable; annual sinking fund)

February 13/02	February 13/32	6.30	Canadian	29,954,000
(Non Callable; annual sinking fund)

May 12/03	September 5/33	5.80	Canadian	450,000,000
(Non Callable; annual sinking fund)

June 10/03	September 5/33	5.80	Canadian	104,500,000
(Non Callable; annual sinking fund)

August 12/04	September 5/35	5.60	Canadian	400,000,000
(Non Callable; annual sinking fund)

February 15/05	March 5/37	5.00	Canadian	425,000,000
Non Callable: annual sinking fund)

May 26/06	June 1/40	4.75	Canadian	1,050,000,000
(Non Callable; annual sinking fund)

February 3/12	February 3/42	3.40	Canadian	300,000,000
(Non Callable; annual sinking fund)

September 16/02	September 5/42	5.70	Canadian	50,000,000
(Non Callable; annual sinking fund)

B. Debentures Issued to Minister of Finance of Canada

Date of Maturity 1	Interest Rate %	Amount Outstanding

April 2012-March 2013	9.37	62,705,000
April 2013-March 2014	3.80	9,800,000
April 2014-March 2015	3.05	59,274,000
April 2015-March 2016	3.40	15,525,000
April 2016-March 2017	4.37	88,778,000
April 2017-March 2022	5.40	220,372,000
After March 2022	4.54	288,632,000

Total		$ 745,086,000

Debentures issued to the CPP have a 5-30-year maturity and, are callable in whole or in part at the option of the Province. The interest rates have been prepared on a weighted average basis. The debentures are subject in part to annual sinking funds; equity in sinking funds at March 31, 2012 was $132,297,869.

Summary

	Thousands
Payable in Canadian Funds:
Term Debt Issued to the Public	$	9,198,323
Debentures Issued to Minister of Finance of Canada		745,086
Payable in Foreign Currencies
Term Debt Issued to the Public (converted to Canadian Dollars)		274,753

Term Debt Outstanding		10,218,162
Promissory Notes Outstanding		692,657
Gross Debt	$	10,910,819

CROWN CORPORATIONS

Introduction

Saskatchewan’s Crown corporations are involved in a broad range of activities including the provision of electricity, natural gas, telecommunications, financial services, and other goods and services. Certain Crown corporations are commercial enterprises intended to be self-sustaining while others receive an annual appropriation or grant to cover costs of administration and other expenses.

Traditionally, the capital requirements of the Government’s enterprises have been financed, with few exceptions, through direct obligations of, or advances by, the General Revenue Fund (GRF). Provincial legislation governing certain Crown corporations provides for the issuance of securities by these enterprises, with or without a guarantee of the Province. Pursuant to The Financial Administration Act, 1993, all borrowings by Provincial Crown corporations must be approved by the Minister of Finance for Saskatchewan.

Loans and advances to, and investments in, Crown corporations are carried in the financial statements of the GRF at cost. Loans and equity investments are written down to their estimated net realizable value.

For administrative purposes, Saskatchewan’s Crown corporations are categorized into two separate groups. Most Crown corporations with commercial operations are under the purview of, and report to, Crown Investments Corporation of Saskatchewan, as discussed below. All other Crown corporations report directly to the Treasury Board, which is a committee of the Executive Council.

Crown Investments Corporation of Saskatchewan (CIC)

Introduction. CIC is a Provincial Crown corporation without share capital, established and operating under authority of The Crown Corporations Act, 1993. CIC is wholly owned by the Government of Saskatchewan. CIC is responsible for certain Provincial investments including Crown corporations and financial and operating investments. Crown corporations are designated as being under the purview of CIC by legislation or Order-in-Council. As at December 31, 2011 there were ten corporations so designated.

Fiscal Year 2011 Highlights - Non-Consolidated Basis. CIC, as a legal entity, makes investments, borrows money, receives dividends and interest income and pays interest, grants and other expenses. The results of these transactions are reflected in CIC’s Separate Financial Statements which, unlike the financial statements of the GRF, are based on the calendar year and International Financial Reporting Standards.

Separate net earnings in 2011 were $167.1 million compared to $236.0 million in 2010. The $68.9 million decrease was primarily the result of a decrease in dividend revenue of $62.2 million, a decrease in grant funding from the GRF of $9.6 million, and an increase in operating and other administrative expenses of $1.5 million. This was slightly offset by a decrease in grant funding to subsidiary corporations of $4.2 million and an increase in finance and other revenue of $0.2 million.

The following dividends were declared to CIC in 2011:

	Thousands

Saskatchewan Telecommunications Holding Corporation (SaskTel)	$	138,592
SaskEnergy Incorporated (SaskEnergy)		39,150
Information Services Corporation (ISC)		15,496
Saskatchewan Gaming Corporation (SGC)		20,693
	$	213,931

Dividends declared to CIC in 2010 totalled $276.1 million.

Expenses, including grants to subsidiary corporations and public policy expenditures, were $152.2 million in 2011 (2010 - $154.9 million). The $2.7 million decrease was mainly due to a decrease in grants to subsidiary corporations of $4.2 million.

CIC’s grant funding is as follows:

●	SaskPower received $100.2 million (2010 - $109.9 million) for carbon capture and storage initiatives. CIC provided SaskPower’s grant out of $100.2 million of grant funding from the GRF.

●	CIC provided SaskEnergy with $12.2 million (2010 - $18.2 million) as part of the Saskatchewan Energy Share program.

●	CIC grant funding to STC of $10.7 million increased from $9.3 million in 2010. Funding for 2011 was comprised of $8.7 million (2010 - $8.4 million) for operations, and $2.0 million (2010 - $0.9 million) to meet capital requirements.

●	CIC provided $10.0 million in grants to SaskTel in 2011, $10.0 million (2010 - $Nil) to fund the Saskatchewan Rural Infrastructure Program, and $Nil (2010 - $3.3 million) to fund FleetNet, a provincial emergency communications network.

●	CIC provided $3.0 million (2010 - $Nil) in grants to SGI in support of Saskatchewan’s hybrid vehicle rebate program administered by the Saskatchewan Auto Fund.

●	Gradworks Inc. received $0.4 million in grants in 2011 (2010 - $Nil) to fund its internship program.

CIC does not carry any debt. CIC did not have any asset write-downs in 2011 and 2010.

In November 2005, CIC established the Entrepreneurial Foundation of Saskatchewan and entered into a joint venture agreement, the Saskatchewan Entrepreneurial Fund (SEFJV) to assist with the development and growth of small businesses in the province. CIC’s funding of these programs ended in 2010. To December 31, 2011, CIC has invested $3.4 million in capital in SEFJV. The CIC Board has discontinued further capital contributions to SEFJV.

In May 2006, CIC established the First Nations and Métis Fund to improve participation by First Nations and Métis people in the economy by investing in Saskatchewan-based First Nations and Métis businesses. During the year, CIC did not advance any capital to the fund. CIC has committed to provide up to $20 million for the Fund. To December 31, 2011, CIC has invested $6.1 million. In 2011, FNMF became responsible for the Government of Saskatchewan’s First Nations Business Development Program (SFNDP). SFNDP can invest up to $3.0 million in qualifying First Nations businesses.

CIC Apex Equity Holdco Ltd. was established in February 2007 to hold a joint venture interest in Apex Investment Limited Partnership (Apex). Apex focuses on debt and equity investments in the Province of Saskatchewan’s small and medium sized business sector. CIC is committed to invest up to $52.1 million in Apex. To December 31, 2011 CIC had invested $27.7 million and currently has $14.8 million outstanding.

Saskatchewan Immigrant Investor Fund Inc. was established on October 6, 2010 under The Business Corporations Act (Saskatchewan). The Corporation was established to participate in the Government of Canada’s Immigrant Investor Program (IIP). The Corporation uses IIP funds to deliver the Government of Saskatchewan’s Headstart on a Home program that assists builders and developers in building affordable housing in Saskatchewan.

The Gradworks internship program was formally launched in February 2005 after operating on a trial basis in 2004. Gradworks provides recent post-secondary graduates with internships in CIC Crown corporations, providing the graduates job opportunities and valuable work experience that may lead to permanent jobs in the Crowns, or with other Saskatchewan employers. In 2011, CIC provided grant funding of $0.4 million (2010 - $Nil) to Gradworks.

Fiscal Year 2011 Highlights - Consolidated Basis. The financial statements of CIC are consolidated with the Crown corporations under its purview and other investments to provide the Legislature with financial information relating to the aggregate results of these corporations. The corporations provide a wide variety of services and sell various commodities in both domestic and international markets. The diversified nature of the corporations within the consolidated group is such that the operating results are affected by events and conditions occurring throughout the world.

For the year ended December 31, 2011, CIC reported consolidated net earnings of $450.9 million on total revenues of $4.6 billion, compared to consolidated net earnings of $436.3 million on total revenues of $4.5 billion in 2010. There were no non-recurring items, recovery of (provision for) environmental liabilities and discontinued operations in 2011 and 2010.

Consolidated earnings increased $14.6 million from the prior year. Variances in earnings in the CIC Crown sector were as follows:

●

SaskPower earnings of $248.0 million increased by $44.5 million primarily due to higher Saskatchewan electricity sales volumes, the full year impact of the August 1, 2010 system-wide rate increase, higher Alberta market exports and trading revenues, increased customer contributions and unrealized gains on gas management activities;

●	SaskTel net earnings increased $4.5 million to $154.0 million due mainly to the sale of the Corporation’s interests in Hospitality Network Canada Inc. and Saskatoon 2 Properties Limited Partnership;

●	SaskEnergy net earnings decreased $24.7 million to $25.5 million primarily due to unfavourable fair value adjustments on natural gas in storage and derivative financial instruments used for gas management activities;

●

SGI net earnings decreased $48.9 million to $0.4 million reflective of a challenging underwriting year and an unsettled investment market climate in 2011. While the Corporation experienced strong premium growth, with the largest growth from Ontario auto, underwriting profits suffered as Saskatchewan experienced significant spring and summer storm and flood claims, and each out-of-province jurisdiction experienced a high number of large property losses;

●	CIC Asset Management Inc. net earnings increased $52.4 million to $35.3 million mainly attributable to non-recurring 2011 recoveries of environmental remediation liabilities totaling $41.8 million and a recovery of reinsurance liabilities totaling $4.9 million;

●	SGC earnings increased $3.9 million to $25.9 million due to a record number of casino guest counts which increased 3.3 per cent from 2010;

●	ISC earnings increased $1.6 million to $17.2 million, primarily due to increased land registry revenue and a full year of corporate registry revenue;

●	SaskWater earnings increased $3.1 million to $3.5 million due primarily to higher water sales, growth in new and existing customers, cost management, and improved service margins and work volumes;

●	SOCO earnings decreased $1.5 million to $4.6 million mainly attributed to increased amortization related to $120.7 million of property, plant and equipment and investment property transferred from the GRF effective March 31, 2011; and

●

CIC (separate) earnings decreased $68.9 million to $167.1 million primarily due to reduced dividend revenue of $62.2 million, lower grant funding from the GRF of $9.6 million and an increase in operating and other administrative expenses of $1.5 million. These decreases in earnings were offset by lower grant funding to subsidiary corporations of $4.2 million and higher finance and other revenue of $0.2 million.

In 2012, CIC expects to declare total dividends of $280.0 million (2011 - $128.5 million) to the GRF and make a $143.0 million equity advance repayment. As of August 2012, CIC has repaid $Nil in equity advances to the GRF (2011 - $Nil) and $127.0 million in dividends.

During 2011, capital expenditures made by CIC and the Crown corporations under its purview totaled $1,123.6 million compared to $1,024.1 million spent in 2010. Saskatchewan taxes and fees made by the corporations were $126.0 million in 2011 compared to $117.0 million in 2010. Total consolidated assets administered by CIC were $12.0 billion as at December 31, 2011, an increase of approximately $0.9 billion from assets under administration at December 31, 2010.

On July 26, 2000, the Saskatchewan Rate Review Panel (SRRP) was established with a mandate to conduct a review and provide an opinion on the fairness and reasonableness of proposed Crown corporation monopoly rate changes, referred to the SRRP by the Minister of Crown Investments Corporation, considering the interests of the customer, the Crown Corporation, and the public. SRRP considered no rate applications in 2011.

CIC administers ten subsidiary Crown corporations. Following is a brief commentary on CIC’s major holdings.

Active Crown Corporations

As at December 31, 2011, the following ten active Crown corporations were under CIC’s purview: Information Services Corporation of Saskatchewan, Saskatchewan Gaming Corporation, Saskatchewan Government Insurance, Saskatchewan Opportunities Corporation, Saskatchewan Power Corporation, Saskatchewan Telecommunications Holding Corporation, Saskatchewan Telecommunications (a subsidiary of SaskTel), Saskatchewan Transportation Company, Saskatchewan Water Corporation, and SaskEnergy Incorporated. Saskatchewan Development Fund Corporation ceased operation and the net assets were transferred to CIC as a dividend on December 31, 2010. Of these corporations, SaskPower, SaskTel and SaskEnergy are the most significant in terms of assets, liabilities and operating income generated.

Saskatchewan Power Corporation. SaskPower provides the generation, purchase, transmission, distribution and sale of electricity and related products and services.

●	Net earnings of $248.0 million (2010 - $203.5 million) increased primarily due to revenue growth and improvement in market value of derivatives.

●

Revenue of $1,837.6 million (2010 - $1,690.0 million) increased largely due to higher Saskatchewan electricity sales. Electricity sales volumes to Saskatchewan customers were 19,226 GWh, up 608 GWh or 3.0 per cent compared to the prior year. In addition, the Corporation benefited from the full year impact of the 4.5 per cent system-wide average rate increase that became effective August 1, 2010. Exports and electricity trading increased due to higher sales prices and volumes as a result of increased market opportunities in Alberta. In addition, other revenue rose as a result of higher customer contributions.

●

Expenses of $1,598.9 million (2010 - $1,467.5 million) increased due to rising operating costs as the result of increased storm activity, additional maintenance costs and spending on various new initiatives. In addition, fuel and purchased power costs were up due to increased generation volumes and higher coal and import prices.

●	Gross long-term and short-term debt of $2,958.1 million (2010 - $2,867.0 million) was up due to additional short-term borrowings during the year to finance capital expenditures.

●	SaskPower invested $632.1 million (2010 - $527.7 million) in various capital projects including new generation, customer connects and the life extension of existing infrastructure.

●	Dividends declared to CIC were $Nil (2010 - $Nil) due to SaskPower’s significant capital requirements.

Saskatchewan Telecommunications Holding Corporation. SaskTel is the leading full service communications company in Saskatchewan, providing competitive voice, data, dial and high speed internet, entertainment and multimedia services, security, secure electronic transactions, wireless, data storage and web-hosting applications, text and messaging services over a fiber optic based fully digital network. The Corporation’s major asset is a wholly owned subsidiary, Saskatchewan Telecommunications, which has been the principal supplier of telecommunications in Saskatchewan for over 100 years. Saskatchewan Telecommunications’ operations are regulated by the Canadian Radio-television and Telecommunications Commission.

●	Earnings for the year were $154.0 million, up $4.5 million from 2010. Cash provided by operating activities was $250.3 million.

●	Total operating revenues increased to $1,125.8 million in 2011, up $12.9 million (1.2 per cent) from 2010 primarily due to continued strong customer growth in cellular, MaxTM Entertainment and internet services as well as increased demand for these services.

●

Total operating expenses were $997.5 million, up $28.6 million from 2010 primarily due to increased goods and services purchased to support revenue growth in wireless, MaxTM Entertainment, data and internet revenues. In addition, depreciation and amortization increased $5.7 million due to increased plant in service. These increases were partially offset by decreased salaries, wages and benefit expenses.

●

Net financing expense increased to $10.1 million in 2011, up $2.2 million (27.8 per cent) from 2010. This is driven by increased borrowings to fund the 2010 construction program and reduced capitalized interest resulting from significantly lower plant under construction in 2011 compared to 2010, partially offset by increases in the fair value of sinking funds.

●	Debt increased to $538.0 million (2010 - $492.7 million) and debt ratio increased to 37.6 per cent (2010 – 36.1 per cent) due to increased short-term debt, partially offset by increased sinking funds and cash.

●

Net capital expenditures for the year were $254.9 million, down $43.5 million from 2010, primarily due to planned capital spending reductions, partially offset by increased spending on intangible assets. SaskTel’s net capital spending on property, plant and equipment in 2011 was $221.8 million, down $65.3 million from 2010. Spending decreased primarily due to planned spending reductions on the cellular network upgrade to Universal Mobile Telecommunications System (UMTS)/High Speed Packet Access (HSPA) technology and the Saskatchewan Infrastructure Improvement Program. SaskTel’s spending on intangible assets was $43.9 million, up $26.0 million from 2010.

●	Return on equity increased to 20.7 per cent (2010 – 20.5 per cent) consistent with higher earnings.

●	Dividends of $138.6 million were declared in 2011 (2010 - $139.7 million).

SaskEnergy Incorporated. SaskEnergy operates a natural gas distribution utility that provides natural gas and related services to residential, farm, commercial and industrial customers in Saskatchewan. In addition, TransGas Limited (TransGas) is SaskEnergy’s wholly owned natural gas transmission and storage subsidiary.

●

Net earnings of $25.5 million (2010 - $50.2 million) were lower than the prior year, primarily due to $58.4 million in unfavourable market value adjustments compared to $17.5 million unfavourable market value adjustments in 2010. These unfavourable market value adjustments include a $24.6 million revaluation of natural gas in storage (2010 - $20.6 million) and a $35.9 million unfavourable fair value adjustment on financial and derivative instruments (2010 - $2.6 million favourable). Partially offsetting the unfavourable market value adjustments were increased customer capital contribution revenues totaling $42.5 million (2010 - $20.2 million).

●	Revenues were $890.0 million (2010 - $952.7 million) and expenses were $823.3 million (2010 - $865.0 million) as the continued market trend toward lower natural gas prices had a significant impact on SaskEnergy’s revenues and expenses.

●	Net finance expense declined to $32.6 million in 2011 (2010 - $37.9 million) as the Corporation benefited from lower short term interest rates, while earnings on debt retirement funds increased.

●	Gross debt increased to $1,028.1 million (2010 - $953.6 million) as the Corporation expanded its short-term debt position. The increase was primarily used to fund capital expenditures and purchase natural gas in storage.

●

Capital investment totaled $171.3 million (2010 - $143.9 million). The majority of the capital investments were made to maintain the integrity of SaskEnergy’s extensive distribution and pipeline infrastructure, ensuring safe and reliable service. Included in the increase over 2010 was additional spending on system integrity, as well as work on a new customer information system.

●	Dividends of $39.1 million (2010 - $48.8 million) were declared to CIC.

Major Wholly Owned Subsidiary

CIC Asset Management Inc. (Formerly Investment Saskatchewan Inc.) CIC Asset management Inc. (CIC AMI) provides investment capital and financing, and manages portfolios of commercially viable investments. CIC Asset Management Inc. was incorporated under The Business Corporations Act (Saskatchewan) on November 14, 1979 as a wholly-owned subsidiary of CIC.

●	CIC AMI had net earnings of $35.3 million in 2011 compared to a net loss of $17.1 million in 2010. The improvement in net earnings is attributable to non-recurring 2011 recoveries of environmental remediation liabilities of $41.8 million and a recovery of reinsurance liabilities of $4.9 million.

●	Revenue of $6.9 million in 2011 was lower than the $8.8 million reported in 2010 which is mainly attributable to decreased interest revenue on CIC AMI’s debt investments.

●	Expenses of $1.4 million in 2011 decreased from $2.2 million reported in 2010. This is mainly due to lower operating expenses as CIC AMI continues to sell its investment holdings.

●	Investment disbursements of $3.9 million in 2011 are higher than the $2.0 million reported in 2010 due to increased add-on investment activity.

●

The provision for environmental remediation liabilities decreased by $41.8 million in 2011 to $60.8 million. This decrease is due to management’s change in estimates related to the expected costs of remediation. The provision for reinsurance liabilities decreased by $10.9 million in 2011 to $Nil. This decrease is a result of CIC AMI settling the reinsurance liabilities for a cash payment of $6.0 million resulting in a recovery of reinsurance liabilities of $5.0 million which includes other cash recoveries of $0.1 million related to the settlement.

Crown Investments Corporation of Saskatchewan

Consolidated Statements of Financial Position

	At December 31

		2007*			2008*			2009*			2010		2011
					(Thousands)						IFRS		IFRS
											Note 3 & 6		Note 2
Assets
Current		$	2,233,622		$	2,842,699		$	2,099,157		$	1,998,659	$	2,072,565
Long-term investments			1,164,715			1,008,683			1,157,067			1,182,402		1,218,922
Property, plant and equipment			5,952,302			6,027,194			6,417,451			7,579,984		8,239,329
Other assets			276,667			639,826			543,686			305,285		472,242
Long-term assets of discontinued operations			3,627			68,034			38,932			0		0

Total Assets		$	9,630,933		$	10,586,436		$	10,256,293		$	11,066,330	$	12,003,058

Liabilities and Province's Equity
Current		$	1,690,770		$	1,551,876		$	1,744,571		$	1,772,263	$	2,164,253
Long-term debt			3,226,998			3,710,329			3,601,618			3,953,023		3,952,858
Long-term liabilities from discontinued operations			0			0			5,909			0		0
Other liabilities			531,544			704,321			652,625			1,279,426		1,664,905
Province of Saskatchewan's Equity			4,181,621			4,619,910			4,251,570			4,061,618		4,221,042

Total Liabilities and Province's Equity		$	9,630,933		$	10,586,436		$	10,256,293		$	11,066,330	$	12,003,058


Crown Investments Corporation of Saskatchewan

Consolidated Statement of Operations

	At December 31

			2007*			2008*			2009*			2010		2011
					(Thousands)						IFRS		IFRS
											Note 3 & 6		Note 2
Revenue
Sales of products and services		$	4,329,036		$	4,636,779		$	4,556,066		$	4,378,779	$	4,523,571
Investment			106,835			173,758			62,255			0		0
Other			16,299			12,380			36,073			114,999		33,785

Total Revenue		$	4,452,170		$	4,822,917		$	4,654,394		$	4,493,778	$	4,557,356

Expenses
Operating costs other than
those listed below		$	3,235,838		$	3,612,274		$	3,418,643		$	3,248,064	$	3,241,495
Interest			264,098			244,890			238,039			199,547		221,405
Amortization of property, plant and equipment			467,626			492,051			503,227			514,618		550,216
Saskatchewan taxes and resource payments			103,004			128,577			137,493			117,002		126,027

Total Expenses		$	4,070,566		$	4,477,792		$	4,297,402		$	4,079,231	$	4,139,143

Earnings before the following			381,604			345,125			356,992			414,547		418,213
Future income tax (expense) recovery			8,036			0			0			0		0
Public policy expenditure			0			0			0			0		0
Non-recurring items			236,622			679,776			(23,854	)		0		0
Current income tax expenses			(1,000	)		0			0			0		0
(Provision for) recovery of environmental liabilities			(24,077	)		(48,217	)		464			0		0
Share of net earnings from equity accounted investees			0			0			0			16,933		10,437
Net Loss on sale of equity accounted investees			0			0			0			0		(8,576	)
Gain (loss) from discontinued operations			95,151			1,545			15,106			4,822		30,802
Net Earnings		$	696,336		$	978,229		$	348,708		$	436,302	$	450,876

*2007, 2008, and 2009 consolidated financial statements are reported under Canadian Generally Accepted Accounting Principles (GAAP).

(see accompanying notes)

CROWN INVESTMENTS CORPORATION OF SASKATCHEWAN

Notes to Financial Information

1.	The foregoing financial information has been derived from the audited consolidated financial statements of Crown Investments Corporation of Saskatchewan. The foregoing narrative description is unaudited.

2.	The consolidated financial statements for the year ended December 31, 2007, the year ended December 31, 2008 and the year ended December 31, 2009 have been prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP).

The consolidated financial statements for the year ended December 31, 2011 have been prepared in accordance with International Financial Reporting Standards (IFRS). These are CIC’s first consolidated financial statements prepared in accordance with IFRS and IFRS 1 - First-time Adoption of International Financial Reporting Standards has been applied.

The Corporation’s consolidated financial statements were previously prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP). In preparing the consolidated financial statements, CIC has adjusted amounts reported previously in financial statements prepared in accordance with GAAP. These adjustments relate to reclassifications and corrections of amounts previously reported under GAAP, or are required for the transition from GAAP to IFRS. For a list of reclassifications and corrections, please see the annual report.

Effective January 1, 2007, the Corporation adopted the accounting recommendations for accounting changes (Canadian Institute of Chartered Accountants (CICA) Handbook Section 1506) in accordance with the transitional provisions of the section. The new standard allows for voluntary changes in accounting policy only if they result in the consolidated financial statements providing reliable and more relevant information. New disclosures are required in respect of changes in accounting policies, changes in accounting estimates and correction of errors. The adoption of section 1506 has had no material impact on these consolidated financial statements.

On January 1, 2007, CIC adopted the Canadian Institute of Chartered Accountants (CICA) Handbook Section 3855, financial instruments - recognition and measurement, CICA Handbook Section 3861, financial instruments - disclosure and presentation, CICA Handbook Section 1530, comprehensive income, CICA Handbook Section 3865, hedges and CICA Handbook Section 3251, equity. The comparative consolidated financial statements have not been restated.

Effective January 1, 2008, the Corporation adopted the accounting recommendations for capital disclosures (Canadian Institute of Chartered Accountants (CICA) Handbook Section 1535) in accordance with the transition provisions of the section. This section requires disclosure of information related to the objectives, policies and processes for managing capital, and particularly whether externally imposed capital requirements have been complied with. As this standard only addresses disclosure requirements, there is no impact on the Corporation’s operating results.

Effective January 1, 2008, the Corporation adopted the accounting recommendations for financial instruments - disclosures (CICA Handbook Section 3862) and financial instruments - presentation (CICA Handbook Section 3863) in accordance with the transition provisions of the sections. These sections replace the existing disclosure and presentation recommendations contained in financial instruments - disclosure and presentation (CICA Handbook Section 3861). The new disclosure standards increase the disclosures related to financial instruments, and the nature, extent and management of the Corporation’s risks arising from financial instruments. The presentation standards carry forward unchanged from the former presentation requirements. As these standards only address disclosure and presentation requirements, there is no impact on the Corporation’s operating results.

Effective January 1, 2008, the Corporation adopted CICA Handbook Section 3031 - Inventories. The new recommendations establish standards for the determination of the cost of inventories and the subsequent recognition as expense, including any write-down to net realizable value and reversals of previous write-downs for increases to net realizable value. Also, guidance is provided related to reclassification of inventory items as property, plant and equipment. The standard requires retrospective application with no restatement of prior year results. Upon the adoption of the new standard, the Corporation began using the weighted average cost method for valuing all natural gas inventories.

Effective January 1, 2009, the Corporation adopted the accounting recommendations for goodwill and intangible assets (CICA Handbook Section 3064) in accordance with the transition provisions of the section. This section provides further information on the recognition of internally generated intangible assets and requires intangible assets to be recognized as assets only if the definition of the intangible asset and the recognition criteria are met. The new recommendations have been implemented retroactively resulting in certain items included in property, plant and equipment in prior years to be reclassified to intangible assets, and 2008 net earnings to be restated due to the write-off of certain intangible assets that no longer meet the recognition criteria. In addition, revenues and expenses related to certain prepaid cellular services have been recorded for 2008 and prior years resulting in the retroactive restatement of all periods presented.

Effective for year-ends beginning on or after January 1, 2009, the CICA has amended certain sections of the CICA Handbook to remove the rate regulation exemption for recognition of certain assets and liabilities arising from rate regulation as well as other recognition and measurement guidance. The corporation has implemented these changes with no impact on the financial statements.

In summary, the following adjustments were made to December 31, 2008 balances as a result of the change in accounting policy and prior period adjustments (Thousands of dollars):

Property, plant and equipment	$	(107,527	)
Intangible Assets		204,742
Other Assets		(97,215	)
Net Earnings		1,188
Retained earnings - beginning of year		(1,365	)
Retained earnings - end of year		(177	)

6.	2010 comparative figures have been reclassified to conform to the current year’s presentation. Figures for 2007 through 2009 have not been similarly reclassified.

SOURCES OF INFORMATION

Information included herein which is designated as being taken from a publication of the Province or Canada, or any agency or instrumentality of either, is included herein upon the authority of such publication as a public official document. The financial statements of the Government included herein under the headings "General Revenue Fund Supplementary Financial Information" and "Summary Financial Statements" have been taken from the Public Accounts of the Province (subject to certain adjustments for purposes of comparability). All financial information contained herein was obtained from the most recent annual Budget Estimates, Public Accounts, or Crown Investments Corporation of Saskatchewan Annual Report, or was prepared by representatives of the Ministry of Finance or of CIC in their official capacities. The information set forth under "Province of Saskatchewan", and other than described in the first sentence of this paragraph, was prepared by representatives of the Ministry of Finance in their official capacities.

Saskatchewan Province Of 18-KAnnual report (foreign governments)