Saskatchewan Province Of 424B2 Prospectus for primary offering

Filed pursuant to Rule 424(b)(2) of the Securities Act of 1933
Registration Statement No. 333-261291

PROSPECTUS SUPPLEMENT

(To prospectus dated February 1, 2022)

U.S.$1,000,000,000

PROVINCE OF SASKATCHEWAN

(Canada)

3.25% Bonds due June 8, 2027

The bonds are offered for sale in Canada, the United States, the United Kingdom and those jurisdictions in Europe and Asia where it is legal to make such offers.

The bonds bear interest at the rate of 3.25% per year. Interest on the bonds is payable on June 8 and December 8 of each year, beginning December 8, 2022. The bonds will mature on June 8, 2027. The bonds are not redeemable before maturity, unless certain events occur involving Canadian taxation.

Application will be made for the bonds offered by this prospectus supplement (the “Prospectus Supplement”) to be admitted to the Official List of the Luxembourg Stock Exchange and for such bonds to be admitted to trading on the Euro MTF Market of the Luxembourg Stock Exchange. The Euro MTF Market of the Luxembourg Stock Exchange is not a regulated market for the purposes of the Markets in Financial Instruments Directive (Directive 2014/65/EU (as amended “MiFID II”)). Unless the context otherwise requires, references in this Prospectus Supplement to the bonds being “listed” shall mean that the bonds have been admitted to trading on the Euro MTF Market and have been admitted to the Official List of the Luxembourg Stock Exchange. We have undertaken to the underwriters to use all reasonable efforts to have the bonds listed on the Euro MTF Market of the Luxembourg Stock Exchange as soon as possible after the closing of the issue. We cannot guarantee that these applications will be approved, and settlement of the bonds is not conditional on obtaining the listing. This prospectus supplement together with the prospectus constitutes a prospectus for purposes of Part IV of the Luxembourg law on prospectus securities dated July 16, 2019.

Investing in the bonds involves risks. See “Risk Factors” beginning on page S-6.

Neither the Securities and Exchange Commission (the “SEC”) nor any other regulatory authority has approved or disapproved of these securities or passed upon the accuracy or adequacy of this Prospectus Supplement and the accompanying base prospectus dated February 1, 2022 (the “Prospectus”). Any representation to the contrary is a criminal offense.

	Per bond		Total
Public Offering Price(1)		99.995%	U.S.$	999,950,000
Underwriting Discount		0.150%	U.S.$	1,500,000
Proceeds, before expenses, to the Province (1)		99.845%	U.S.$	998,450,000

(1) Plus accrued interest, if any, from and including June 8, 2022 if settlement occurs after that date.

We expect that the bonds will be ready for delivery in book-entry form only through The Depository Trust Company and its participants, including CDS Clearing and Depository Services Inc., Clearstream Banking, S.A. and Euroclear Bank SA/NV, on or about June 8, 2022.

CIBC Capital Markets National Bank of Canada Financial Markets RBC Capital Markets TD Securities

BMO Capital Markets Scotiabank Barclays Casgrain Desjardins Capital Markets

The date of this Prospectus Supplement is June 1, 2022

TABLE OF CONTENTS

Prospectus Supplement

Page

Summary of the Offering	S-4
Risk Factors	S-6
Use of Proceeds	S-8
Description of Bonds	S-9
Clearing and Settlement	S-15
Tax Matters	S-19
Underwriting	S-20
Legal Matters	S-25
Authorized Agent in the United States	S-26
Forward-Looking Statements	S-27
General Information	S-28
Sources of Information	S-29
Annex A – 2022-23 Provincial Budget	A-1

Prospectus

About This Prospectus	1
Where You Can Find More Information	1
Forward-Looking Statements	1
Province of Saskatchewan	2
Overview	3
Constitutional Framework	4
Provincial Government	5
Description of the Economy and Gross Domestic Product	5
Key Drivers of the Economy	6
Economic Outlook	13
Debt of the Province	14
Exports and Imports	14
Additional Information	17
Use of Proceeds	18
Description of Debt Securities	18
General	18
Prescription	19
Form, Exchange and Transfer	19
Registered Global Securities	20
Payment of Interest and Principal	21
Canadian Income Tax Considerations	21
United States Income Tax Considerations	22
Enforceability and Governing Law	24
Plan of Distribution	25
Debt Record	26
Authorized Agent	26
Experts and Public Official Documents	26
Legal Matters	26
Annex A— Public Accounts 2020-21 Volume 1	A-1
Annex B—2021-22 First Quarter Financial Report	B-1
Annex C—Provincial Budget 2021-22	C-1
Annex D—Debt Summary and Term Debt Outstanding	D-1
Annex E—Mid-Year Report	E-1

(i)

Prospectus Supplement

Capitalized terms used but not defined herein have the meanings given to them in the Prospectus. The words “the Province,” “we,” “our,” “ours” and “us” refer to the Province of Saskatchewan.

References in this Prospectus Supplement to the European Economic Area and Member States of the European Economic Area are to the member states of the European Union together with Iceland, Norway and Liechtenstein.

Unless otherwise specified or the context otherwise requires, references in this Prospectus Supplement to “$” and “Cdn. $” are to lawful money of Canada and “U.S.$” and “U.S. dollars” are to lawful money of the United States of America. The daily average exchange rate between the U.S. dollar and the Canadian dollar published by the Bank of Canada on June 1, 2022 was approximately $1.00 = U.S.$0.7912.

IMPORTANT INFORMATION FOR INVESTORS

We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. Before making an investment decision, you should consult your legal and investment advisors regarding any restrictions or concerns that may pertain to you and your particular jurisdiction.

The Prospectus contains information regarding the Province and other matters, including a description of certain terms of the Province’s securities, and should be read together with this Prospectus Supplement. We have not, and the underwriters have not, authorized anyone to provide any information other than that contained in the Prospectus or this Prospectus Supplement or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that persons other than those authorized by us may give you.

In connection with the issue of the bonds, the underwriters (or persons acting on their behalf) may over-allot bonds or effect transactions with a view to supporting the market price of the bonds at a level higher than that which might otherwise prevail. However, there is no assurance that the underwriters (or persons acting on their behalf) will undertake stabilization action. Any stabilization action may begin on or after the date on which adequate public disclosure of the terms of the offer of the bonds is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue date of the bonds and 60 days after the date of the allotment of the bonds. Any stabilization action or over-allotment must be conducted by the underwriters (or persons acting on their behalf) in accordance with all applicable laws and rules.

This Prospectus Supplement has been prepared on the basis that all offers of bonds in any Member State of the European Economic Area will be made pursuant to an exemption under the Prospectus Regulation (as defined below) from the requirement to publish a prospectus or supplement to a prospectus under the Prospectus Regulation for offers of bonds. Accordingly, any person making or intending to make any offer within a Member State of the bonds which are the subject of an offering contemplated in this Prospectus Supplement may only do so in circumstances in which no obligation arises for the Province or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation, in each case, in relation to such offer.

Neither the Province nor any underwriter has authorized, nor do they authorize, the making of any offer of bonds in circumstances in which an obligation arises for the Province or any underwriter to publish a prospectus or supplement a prospectus pursuant to the Prospectus Regulation for such offer.

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Neither the Province nor any underwriters have authorized, nor do they authorize, the making of any offer of the bonds through any financial intermediary, other than offers made by the relevant underwriters which constitute the final placement of the bonds contemplated in this Prospectus Supplement.

This Prospectus Supplement and the offer of the bonds are only addressed to and directed at persons in a Member State who are qualified investors within the meaning of the Prospectus Regulation or who are other persons to whom the offer may lawfully be addressed and must not be acted upon by other persons in that relevant Member State.

We expect that delivery of the bonds will be made against payment therefor on or about the date specified on the cover page of this Prospectus Supplement, which is five business days following the date of pricing of the bonds (such settlement cycle being herein referred to as “T+5”). You should note that the trading of the bonds on the date of pricing or the next succeeding business days may be affected by the T+5 settlement. See “Underwriting.”

The bonds may not be a suitable investment for all investors

Each potential investor in the bonds must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should:

(i) have sufficient knowledge and experience to make a meaningful evaluation of the bonds, the merits and risks of investing in the bonds and the information contained in the Prospectus and this Prospectus Supplement;

(ii) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the bonds and the impact the bonds will have on its overall investment portfolio;

(iii) have sufficient financial resources and liquidity to bear all of the risks of an investment in the bonds, including where the currency for principal or interest payments is different from the potential investor’s currency;

(iv) understand thoroughly the terms of the bonds and be familiar with the behavior of any relevant indices and financial markets; and

(v) be able to evaluate (either alone or with the help of a financial advisor) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.

Legal investment considerations may restrict investments in the bonds

The investment activities of certain investors are subject to legal investment laws and regulations, or review or regulation by certain authorities. Each potential investor should consult its legal advisors to determine whether and to what extent (1) the bonds are legal investments for it, (2) the bonds can be used as collateral for various types of borrowing and (3) other restrictions apply to its purchase or pledge of any bonds. Financial institutions should consult their legal advisors or the appropriate regulators to determine the appropriate treatment of the bonds under any applicable risk-based capital or similar rules. These restrictions may limit the market for the bonds.

You may assume that the information appearing in this Prospectus Supplement and the Prospectus, as well as the information we previously filed with the SEC, is accurate in all material respects as of the date of such document. Please see “Where You Can Find More Information” in the Prospectus.

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We have filed a registration statement with the SEC covering the portion of the bonds to be sold in the United States or in circumstances where registration of the bonds is required. For further information about us and the bonds, you should refer to our registration statement and its exhibits. This Prospectus Supplement and the Prospectus summarize material provisions of the agreements and other documents that you should refer to. Because the Prospectus Supplement and the Prospectus may not contain all of the information that you may find important, you should review the full text of these documents.

Section 309B(1)(c) Notification

The bonds are prescribed capital markets products (as defined in the Securities and Futures (Capital Markets Products) Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).

Information filed by the Province is available from the SEC’s Electronic Document Gathering and Retrieval System (http://www.sec.gov), which is commonly known by the acronym EDGAR, as well as from commercial document retrieval services.

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SUMMARY OF THE OFFERING

This summary must be read as an introduction to this Prospectus Supplement and the accompanying Prospectus and any decision to invest in the bonds should be based on a consideration of such documents taken as a whole.

Issuer: The Province of Saskatchewan.

Legal Entity Identifier (LEI): 549300FKDIB7OJMBSP83

Aggregate principal amount: U.S.$1,000,000,000

Interest rate: 3.25% per year

Maturity date: June 8, 2027

Interest payment dates: June 8 and December 8 of each year, beginning on December 8, 2022

Interest commencement: Interest will accrue from June 8, 2022.

Interest calculations: Based on a 360-day year of twelve 30-day months.

Ranking: The bonds will be our direct unsecured obligations and among themselves will rank pari passu and be payable without preference or priority. The bonds will rank equally with all of our other unsecured and unsubordinated indebtedness and obligations from time to time outstanding. Payments of principal and interest on the bonds will be payable out of the General Revenue Fund of the Province.

Redemption: We may not redeem the bonds prior to maturity, unless certain events occur involving Canadian taxation.

Proceeds: After deducting the underwriting discount and our estimated expenses of U.S.$326,000 our net proceeds will be approximately U.S.$998,124,000.

Markets: The bonds are offered for sale in Canada, the United States, the United Kingdom and those jurisdictions in Europe and Asia where it is legal to make such offers.

Listing: We will apply to have the bonds admitted to trading on the Euro MTF Market of the Luxembourg Stock Exchange. We have undertaken to the underwriters to use all reasonable efforts to have the bonds listed on the Euro MTF Market of the Luxembourg Stock Exchange and to trading on the Luxembourg Stock Exchange’s Euro MTF Market as soon as possible after the closing of the issue. We cannot guarantee that these applications will be approved, and settlement of the bonds is not conditional on obtaining the listing.

Form of bond: The bonds will be issued in the form of one or more fully registered permanent global bonds registered in the name of Cede & Co., as nominee of The Depository Trust Company, known as DTC, in a register held by The Bank of New York Mellon, as registrar. Beneficial interests in the global bonds will be represented through book-entry accounts of financial institutions acting on behalf of beneficial owners as direct and indirect participants in DTC. Investors may elect to hold interests in the global bonds through any of DTC (in

S-4

the United States), CDS Clearing and Depository Services Inc., known as CDS (in Canada), Clearstream Banking, S.A., known as Clearstream, or Euroclear Bank SA/NV as operator of the Euroclear System or any successor in that capacity, known as Euroclear (in Europe and Asia), if they are participants in such systems, or indirectly through organizations which are participants in such systems. CDS will hold interests directly through its account at DTC and Clearstream and Euroclear will hold interests as indirect participants in DTC.

Except in limited circumstances, investors will not be entitled to have bonds registered in their names, will not receive or be entitled to receive bonds in definitive form and will not be considered registered holders thereof under the fiscal agency agreement between the Province and The Bank of New York Mellon relating to the bonds.

The bonds will only be sold in minimum aggregate principal amounts of U.S.$5,000 and integral multiples of U.S.$1,000 for amounts in excess of U.S.$5,000.

Withholding tax: Principal of, and interest on, the bonds are payable by the Province without withholding or deduction for Canadian withholding taxes except to the extent set forth herein.

Risk factors: We believe that the following factors represent the principal risks inherent in investing in the bonds; there is no active trading market for the bonds and an active trading market may not develop; the bonds are subject to modification and waiver of conditions in certain circumstances; because the bonds are held by or on behalf of DTC, investors will have to rely on its procedures for transfer, payment and communication with us; the laws governing the bonds may change; investors may be subject to exchange rate risks and/ or exchange controls; and we have ongoing ordinary course business relationships with certain of the underwriters and their affiliates that could create the potential for, or perception of, conflict among the interests of underwriters and prospective investors.

The Province may be contacted at Treasury Management Branch, Province of Saskatchewan, 2350 Albert Street, 6th Floor, Regina, SK S4P 4A6 and may be telephoned at 306-787-6752.

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RISK FACTORS

We believe that the following factors may be material for the purpose of assessing the market risks associated with the bonds and the risks that may affect our ability to fulfill our obligations under the bonds.

We believe that the factors described below represent the principal risks inherent in investing in the bonds but we do not represent that the statements below regarding the risks of investing in any bonds are exhaustive. Prospective investors should also read the detailed information set out elsewhere in this Prospectus Supplement and the Prospectus and reach their own views prior to making any investment decision.

There is no active trading market for the bonds and an active trading market may not develop

The bonds will be new securities which may not be widely distributed and for which there is currently no active trading market. No assurance can be given as to the liquidity of the trading market for the bonds or that an active trading market will develop. If the bonds are traded after their initial issuance, they may trade at a discount to their initial offering price, depending upon prevailing interest rates, the market for similar securities, general economic conditions and our financial condition. If an active trading market does not develop, investors may not be able to sell their bonds at prices that will provide them with a yield comparable to similar investments that have a more highly developed secondary market. We have undertaken to the underwriters to use all reasonable efforts to have the bonds listed on the Euro MTF Market of the Luxembourg Stock Exchange as soon as possible after the closing of the issue. We cannot guarantee that our application to list the bonds will be approved, and settlement of the bonds is not conditional on obtaining the listing.

The bonds are subject to modification and waiver of conditions in certain circumstances

The terms of the bonds contain provisions for calling meetings of registered holders to consider matters affecting their interests generally. These provisions permit defined majorities to approve, by extraordinary resolution (as defined below under “Description of Bonds—Modification”), certain modifications or amendments to the fiscal agency agreement and the bonds that bind all registered holders, including registered holders who did not attend and vote at the relevant meeting and registered holders who voted in a manner contrary to the majority.

The terms of the bonds also provide that the parties to the fiscal agency agreement will be able to enter into agreements supplemental to the fiscal agency agreement to create and issue further bonds ranking equally and ratably with the bonds in all respects, or in all respects other than in respect of the date from which interest will accrue and the first interest payment date, and that such further bonds shall be consolidated and form a single series with the bonds and shall have the same terms as to status, redemption or otherwise as the bonds.

The terms of the bonds also provide that the parties to the fiscal agency agreement will be able to amend the fiscal agency agreement and the bonds without notice to or consent of the registered holders for the purpose of curing any ambiguity or of curing, correcting or supplementing any defective provisions therein, or effecting the issue of further bonds as described above or in any other manner we may deem necessary or desirable and which in the reasonable opinion of the parties to the fiscal agency agreement will not adversely affect the interests of the registered holders.

Because the bonds are held by or on behalf of DTC, investors will have to rely on its procedures for transfer, payment and communication with us

The bonds will be deposited with DTC. Except in limited circumstances, investors will not be entitled to receive bonds in definitive form. DTC’s records will reflect only the identity of direct DTC participants to whose accounts the bonds are credited. Direct and indirect participants in DTC will be responsible for keeping records of the beneficial ownership of bonds on behalf of their customers. Investors will be able to trade their beneficial interests only through DTC and its direct and indirect participants.

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We will discharge our payment obligations under the bonds by making payments to DTC for distribution to its account holders. A holder of a beneficial interest in the bonds must rely on the procedures of DTC to receive payments under the bonds. We have no responsibility or liability for the records relating to, or payments made in respect of, beneficial interests in the bonds.

Holders of beneficial interests in the bonds will not have a direct right to vote in respect of the bonds. Instead, such holders will be permitted to act only to the extent that they are enabled by DTC to appoint proxies. Similarly, holders of beneficial interests in the bonds will not have a direct right under the bonds to take enforcement action against us in the event of a default under the bonds.

The laws governing the bonds may change

The terms of the bonds are based on the laws of the Province of Saskatchewan and the federal laws of Canada applicable therein in effect as at the date of this Prospectus Supplement. No assurance can be given as to the impact of any possible judicial decision or change to the laws of the Province of Saskatchewan or the federal laws of Canada applicable therein or administrative practice after the date of this Prospectus Supplement.

Investors may be subject to exchange rate risks and exchange controls

We will pay principal and interest on the bonds in the currency of the United States. This presents certain risks relating to currency conversions if an investor’s financial activities are denominated principally in a currency or currency unit (the “Investor’s Currency”) other than the currency of the United States. These include the risk that exchange rates may significantly change (including changes due to devaluation of the currency of the United States or revaluation of the Investor’s Currency) and the risk that authorities with jurisdiction over the Investor’s Currency may impose or modify exchange controls. An appreciation in the value of the Investor’s Currency relative to the currency of the United States would decrease (1) the Investor’s Currency-equivalent yield on the bonds, (2) the Investor’s Currency-equivalent value of the principal payable on the bonds and (3) the Investor’s Currency-equivalent market value of the bonds.

Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect an applicable exchange rate. As a result, investors may receive less interest or principal than expected, or no interest or principal.

Investment in the bonds involves the risk that subsequent changes in market interest rates may adversely affect the value of the bonds.

Certain of the underwriters may have real or perceived conflicts of interest

Certain of the underwriters and their affiliates have engaged, and may in the future engage, in investment banking and/or commercial banking transactions with, and may perform services for, us in the ordinary course of business and such activities could create the potential for or perception of conflict among the interests of the underwriters and prospective investors.

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USE OF PROCEEDS

The proceeds from the sale of the new bonds will be U.S.$998,124,000 after deducting the underwriting discount and our estimated expenses. The underwriting fee of U.S.$1,500,000 will be paid by us, as described in “Underwriting”. We intend to use the proceeds of this offering for general government purposes.

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DESCRIPTION OF BONDS

General

The 3.25% Bonds due June 8, 2027 offered hereby in the aggregate principal amount of U.S.$1,000,000,000 will be issued subject to a fiscal agency agreement to be dated as of June 8, 2022, between the Province and The Bank of New York Mellon as registrar, fiscal agent, transfer agent and principal paying agent (the “Registrar”), which defines your rights as holder of the bonds.

The information contained in this section and in the Prospectus summarizes the terms of the bonds and the fiscal agency agreement. You should read the information set forth below together with the section “Description of Debt Securities and Warrants” in the Prospectus, which summarizes the general terms of the bonds and the fiscal agency agreement. This Prospectus Supplement describes the terms of the bonds in greater detail than the Prospectus and may provide information that differs from the Prospectus. If the information in this Prospectus Supplement differs from the Prospectus, you should rely on the information in this Prospectus Supplement. You should also read the fiscal agency agreement and the exhibits thereto, including the form of Global Bonds (as defined below), for a full description of the terms of the bonds. A copy of the fiscal agency agreement and its exhibits will be available for inspection at our offices.

References to principal and interest in respect of the bonds shall be deemed also to refer to any additional amounts which may be payable as described below. See “—Payment of Additional Amounts”.

Status of the Bonds

The bonds will be our direct unsecured obligations and among themselves will rank pari passu and be payable without preference or priority. The bonds will rank equally with all of our other unsecured and unsubordinated indebtedness and obligations from time to time outstanding. Payments of principal and interest on the bonds will be payable out of the General Revenue Fund of the Province.

Form, Denomination and Registration

The bonds will be issued in the form of one or more fully registered global bonds (the “Global Bonds”) registered in the name of Cede & Co., as nominee of DTC, and held by The Bank of New York Mellon as custodian for DTC, or the DTC Custodian. Beneficial interests in the Global Bonds will be represented through book-entry accounts of financial institutions acting on behalf of beneficial owners as direct and indirect participants in DTC. Investors may elect to hold interests in the Global Bonds directly through DTC (in the United States), CDS (in Canada) or through Clearstream or Euroclear (in Europe and in Asia) if they are participants in such systems, or through organizations which are participants in such systems. CDS will hold interests on behalf of its participants directly through its account at DTC and Clearstream and Euroclear will hold interests on behalf of their participants through customers’ securities accounts in Clearstream and Euroclear’s names on the books of their respective depositaries (“U.S. Depositaries”), which in turn will hold such interests in customers’ securities accounts in the U.S. Depositaries’ names on the books of DTC. Except in the limited circumstances described herein, owners of beneficial interests in the Global Bonds will not be entitled to have bonds registered in their names, will not receive or be entitled to receive bonds in definitive form and will not be considered registered holders thereof under the fiscal agency agreement. See “—Title” and “—Definitive Certificates”. If bonds in definitive form are issued and for so long as the bonds are listed on the Euro MTF Market of the Luxembourg Stock Exchange and the rules of such stock exchange so require, the Province will appoint and maintain a paying agent and a transfer agent in Luxembourg.

The bonds will only be sold in minimum principal amounts of U.S.$5,000 and integral multiples of U.S.$1,000 in excess thereof.

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All bonds will be recorded in a register maintained by the Registrar under the fiscal agency agreement, and will be registered in the name of Cede & Co., for the benefit of owners of beneficial interests in the Global Bonds, including those beneficial owners which are participants in CDS, Clearstream and Euroclear. The register shall at all times be kept in the City of New York or at such other office reasonably satisfactory to the Province.

The Registrar will not impose any service charge on the registered holder for any registration of transfer or exchange of bonds, other than reasonable fees for the replacement of lost, stolen, mutilated, defaced or destroyed bonds; however, the Province may require of the party requesting such transfer or exchange, as a condition precedent to the exercise of any right of transfer or exchange contained in the fiscal agency agreement or in the bonds, the payment of a sum sufficient to cover any stamp or other tax or other governmental charge payable in connection therewith. In addition, owners of beneficial interests in the Global Bonds may incur fees payable in respect of the maintenance and operation of the book-entry accounts in which such interests are held with the clearing systems. The Province and the Registrar will not be required to make any exchange of bonds if, as a result thereof, the Province may incur adverse tax or other similar consequences under the laws or regulations of any jurisdiction in effect at the time of the exchange.

Title

Subject to applicable law and the terms of the fiscal agency agreement, we, the Registrar, and any paying agent appointed pursuant to the fiscal agency agreement shall deem and treat the registered holders of the bonds as the absolute owners thereof for all purposes whatsoever notwithstanding any notice to the contrary; and all payments to or on the order of the registered holders shall be valid and effectual to discharge our liability and that of the Registrar in respect of the bonds to the extent of the sum or sums so paid.

Interest

The bonds will bear interest from and including June 8, 2022 at a rate of 3.25% per annum. Interest on the bonds will be payable in two equal semi-annual installments in arrears on June 8 and December 8 of each year. Interest will be payable to the persons in whose name the bonds are registered at the close of business on the preceding May 24 or November 23 (the regular record dates), as the case may be. Interest on the bonds will cease to accrue on the date fixed for redemption or repayment unless payment of principal is improperly withheld or refused. Any overdue principal or interest on the bonds shall bear interest at the rate of 3.25% per annum (before and after judgment) until paid, or if earlier, when the full amount of the monies payable has been received by the Registrar and notice to that effect has been given in accordance with “Notices” below. Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months.

Payments

Principal of and interest on the bonds (including bonds in definitive form if issued in exchange for the Global Bonds as described under “Definitive Certificates”) are payable by us in such coin or currency of the United States as at the time of payment is legal tender for the payment of public or private debts to the persons in whose names the bonds are registered at the close of business on the record date preceding the relevant interest payment date, the Maturity Date (as defined below) or the date of redemption, as the case may be. Ownership positions within each clearing system will be determined in accordance with the normal conventions observed by such system. The Registrar will act as our principal paying agent for the bonds pursuant to the fiscal agency agreement. The Registrar will pay amounts received from the Province directly to Cede & Co. Neither we nor the Registrar will have any responsibility or liability for any aspect of the records of DTC, CDS, Clearstream or Euroclear relating to, or payments made by DTC, CDS, Clearstream or Euroclear on account of, beneficial interests in the Global Bonds or for maintaining, supervising or reviewing any records of DTC, CDS, Clearstream or Euroclear relating to such beneficial interests. With respect to payments on bonds issued in definitive form, see “Definitive Certificates”.

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If any date for payment in respect of any bond is not a business day, the registered holder thereof shall not be entitled to payment until the next following business day, and no further interest shall be paid in respect of the delay in such payment. In this paragraph “business day” means a day other than a Saturday or Sunday on which banking institutions in the City of New York, the City of Toronto, Ontario and the City of Regina, Saskatchewan are not authorized or obligated by law or executive order to be closed. If the bonds have been issued in definitive form and a date for payment is a business day but is a day on which any paying agent is closed at the applicable place of payment, a registered holder will not be entitled to payment at such location until the next succeeding day that is not a Saturday or Sunday on which banking institutions in such place of payment are not generally authorized or obligated by law or executive order to be closed, and no further interest shall be paid in respect of the delay in such payment.

Further Issues

We may, from time to time, without notice to or the consent of the registered holders of the bonds, create and issue further bonds having the same terms as the bonds being issued in this offering (except for issue date, issue price and first interest payment date) so that such further bonds shall be consolidated and form a single series with the bonds and shall have the same terms as to status, redemption or otherwise as the bonds; provided, that if the further bonds are not fungible with the outstanding bonds for Canadian or U.S. federal income tax purposes, they will trade under a separate CUSIP number. Any further bonds shall be issued subject to agreements supplemental to the fiscal agency agreement.

Payment of Additional Amounts

All payments of, or in respect of, principal of and interest on the bonds will be made without withholding of or deduction for, or on account of, any present or future taxes, duties, assessments or charges of whatsoever nature imposed or levied by or on behalf of the Government of Canada, or any province or political subdivision thereof, or any authority thereof or agency therein having power to tax, unless such taxes, duties, assessments or charges are required by law or by the administration or interpretation thereof to be withheld or deducted. In that event, we (subject to our right of redemption described herein) will pay to the beneficial owners of the bonds such additional amounts (the “Additional Amounts”) as will result (after withholding or deduction of any such taxes, duties, assessments or charges) in the payment to the holders of bonds of the amounts which would otherwise have been payable in respect of the bonds in the absence of such taxes, duties, assessments or charges, except that no such Additional Amounts shall be payable with respect to any bond presented for payment:

(a) by or on behalf of a holder who is subject to such taxes, duties, assessments or charges in respect of such bond by reason of the holder being connected with Canada otherwise than merely by the holding or ownership as a non-resident of Canada of such bond; or

(b) more than 15 days after the Relevant Date, except to the extent that the holder thereof would have been entitled to such Additional Amounts on the last day of such period of 15 days. For this purpose, the “Relevant Date” in relation to any bond means whichever is the later of:

(i) the date on which the payment in respect of such bond becomes due and payable; or

(ii) if the full amount of the moneys payable on such date in respect of such bond has not been received by the Registrar on or prior to such date, the date on which notice is duly given to the holders of bonds that such moneys have been so received; or

(c) with respect to amounts required to be withheld or deducted under sections 1471 to 1474 of the U.S. Internal Revenue Code of 1986, as amended (or any amended or successor versions of such sections) (“FATCA”), any regulations or other official guidance thereunder, any

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intergovernmental agreement entered into in connection with FATCA, or any law, regulation or other official guidance enacted in any jurisdiction implementing FATCA or an intergovernmental agreement.

Maturity, Redemption and Purchases

The principal amount of the bonds shall be due and payable on June 8, 2027 (the “Maturity Date”). The bonds are not redeemable prior to the Maturity Date unless specified events occur involving Canadian taxation as provided below.

The bonds may be redeemed at our option in whole, but not in part, at any time, on giving not less than 30 days’ and not more than 60 days’ notice to registered holders of bonds in accordance with “Notices” below (which notice shall be irrevocable), at 100% of the principal amount thereof, together with interest accrued thereon to the date fixed for redemption, if (a) we have paid or we will become obliged to pay Additional Amounts as provided or referred to in “Payment of Additional Amounts” above as a result of any change in, or amendment to, the laws or regulations of Canada, or any province or political subdivision thereof, or any authority thereof or agency therein having power to tax, or any change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective (or, in the case of a change in application or official interpretation, is announced) on or after the date of this Prospectus Supplement, and (b) such obligation cannot be avoided by our taking reasonable measures available to us, provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which we would be obliged to pay such Additional Amounts were a payment in respect of the bonds then due. Prior to the publication of any notice of redemption pursuant to this paragraph, we shall deliver to the Registrar a certificate signed by an official of the Province stating that we are entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to our right so to redeem have occurred.

We may, if not in default under the bonds, at any time purchase bonds in the open market, or by tender or by private contract at any price and may or may not cause the Registrar to cancel any bonds so purchased.

Definitive Certificates

No beneficial owner of bonds will be entitled to receive bonds in definitive form except in the limited circumstances described below.

If DTC notifies us that it is unwilling or unable to continue as depositary in connection with the Global Bonds or ceases to be a clearing agency registered under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and a successor depositary is not appointed by us within a reasonable period after receiving such notice or becoming aware that DTC is no longer so registered, we will issue or cause to be issued fully registered bonds in definitive form upon registration of transfer of, or in exchange for, the Global Bonds. We may also at any time and in our sole discretion determine not to have any of the bonds held in the form of the Global Bonds and, in such event, we will issue or cause to be issued fully registered bonds in definitive form upon registration of transfer of, or in exchange for, such Global Bonds.

In the event definitive bonds are issued and for so long as the bonds are listed on the Euro MTF Market of the Luxembourg Stock Exchange and the rules of such stock exchange so require, we will appoint and maintain a paying agent and a transfer agent in Luxembourg.

Modification

The fiscal agency agreement and the bonds may be amended or supplemented by us on the one hand, and the Registrar, on the other hand, without notice to or the consent of the registered holder of any bond, for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provisions contained

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therein, or effecting the issue of further bonds as described under “Further Issues” above, or in any other manner which we may deem necessary or desirable and which, in our reasonable opinion, will not adversely affect the interests of the holders of bonds.

The fiscal agency agreement will contain provisions for convening meetings of registered holders of bonds to consent by Extraordinary Resolution (as defined below) to any modification or amendment proposed by us to the fiscal agency agreement (except as provided in the immediately preceding paragraph) and the bonds (including the terms and conditions thereof). An Extraordinary Resolution duly passed at any such meeting shall be binding on all registered holders of bonds, whether present or not; provided, however, that no such modification or amendment to the fiscal agency agreement or to the terms and conditions of the bonds may, without the consent of the registered holder of each such bond affected thereby: (a) change the Maturity Date of any such bond or change any interest payment date; (b) reduce the principal amount of any such bond or the rate of interest payable thereon; (c) change the currency of payment of any such bond; (d) impair the right to institute suit for the enforcement of any payment on or with respect to such bond; or (e) reduce the percentage of the principal amount of the bonds necessary for the taking of any action, including modification or amendment of the fiscal agency agreement or the terms and conditions of the bonds, or reduce the quorum required at any meeting of registered holders of bonds.

The term “Extraordinary Resolution” will be defined in the fiscal agency agreement as a resolution passed at a meeting of registered holders of bonds by the affirmative vote of the registered holders of not less than 66 2/3% of the principal amount of the bonds represented at the meeting in person or by proxy and voting on the resolution or as an instrument in writing signed by the registered holders of not less than 66 2/3% in principal amount of the outstanding bonds. The quorum at any such meeting for passing an Extraordinary Resolution will be one or more persons being or representing registered holders of bonds with at least a majority in principal amount of the bonds at the time outstanding, or at any adjourned meeting called by us or the Registrar, one or more persons being or representing registered holders of bonds whatever the principal amount of the bonds so held or represented.

So long as the bonds are listed on the Euro MTF Market of the Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange so require, notice of any amendment of the bonds or the fiscal agency agreement will be published in a leading newspaper having general circulation in Luxembourg (which is expected to be the Luxemburger Wort) or on the Luxembourg Stock Exchange website, currently at www.bourse.lu.

Governing Law

The bonds and the fiscal agency agreement will be governed by, and construed in accordance with, the laws of the Province of Saskatchewan and the federal laws of Canada applicable in the Province of Saskatchewan.

Notices

All notices to the registered holders of bonds will be published by or on behalf of the Province in English, in New York, U.S.A. in The Wall Street Journal and in Canada in The Globe and Mail or the National Post. If at any time publication in any such newspaper is not practicable, notices will be valid if published in an English language newspaper with general circulation in the respective market regions as the Province will determine. As long as the bonds are listed on the Euro MTF Market of the Luxembourg Stock Exchange, and the rules of the Luxembourg Stock Exchange so require, notices will be published in a leading newspaper having general circulation in Luxembourg (which is expected to be the Luxemburger Wort) or on the Luxembourg Stock Exchange website, currently at www.bourse.lu. Any such notice will be deemed to have been given on the date of such publication or, if published more than once on different dates, on the first date on which publication is made. Written notice will also be given to DTC, provided at the time of such notice the bonds are represented by

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the Global Bonds. If the bonds are being held in definitive form, notices will be validly given if sent by first class prepaid post addressed to the registered holders thereof at their respective addresses appearing in the register and if, in the case of joint holders of any bond, more than one address appears in the register in respect of such joint holding, such notice will be addressed only to the first address so appearing. Any notice so given will be deemed to have been given on the day on which it has been sent by post.

Prescription

Our obligation to pay an amount of interest on the bonds will cease if a claim for the payment of such interest is not made within the lesser of two years, or the period prescribed by law, after the date on which such interest becomes due and payable. Our obligation to pay the principal amount of the bonds will cease if the bonds are not presented for payment within the lesser of two years, or the period prescribed by law, after the date on which such principal becomes due and payable.

No Obligation to Maintain Listing

If the Province determines that it is unduly onerous to maintain the listing of the bonds on the Euro MTF Market of the Luxembourg Stock Exchange, then the Province may delist the bonds from the Luxembourg Stock Exchange. If the listing of the bonds is so terminated, prior to such termination the Province will use its best efforts to seek an alternative admission to listing, trading and/or quotation of such bonds by another listing authority, securities exchange and/or quotation service as it may reasonably decide (including a market which is not a regulated market or a market outside of the European Economic Area), provided however that any such authority, exchange or service shall be commonly used for the listing and trading of debt securities in the international bond market. However, the Province is not required to seek an alternative admission to listing, trading and/or quotation of the bonds on any such authority, exchange or service where it would be, as reasonably determined by the Province, impractical or unduly burdensome to do so.

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CLEARING AND SETTLEMENT

Links have been established among DTC, CDS, Clearstream and Euroclear to facilitate the initial issuance of the bonds and cross-market transfers of the bonds associated with secondary market trading. DTC will be linked directly to CDS, and linked indirectly to Clearstream and Euroclear through the DTC accounts of their respective U.S. Depositaries.

The Clearing Systems

The clearing systems have advised us as follows:

DTC. DTC is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds and provides asset servicing for securities that its participants (“Direct Participants”) deposit with DTC. DTC also facilitates post- trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, the National Securities Clearing Corporation and Fixed Income Clearing Corporation; all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants” and, together with Direct Participants, “DTC Participants”). The DTC rules applicable to DTC and its Direct and Indirect Participants are on file with the SEC.

Purchases of bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the bonds on DTC’s records. The ownership interest of each actual purchaser of each bond (a “beneficial owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial owners will not receive written confirmation from DTC of their purchase, but beneficial owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the beneficial owner entered into the transaction. Transfers of ownership interests in the bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in bonds, except in the event that use of the book-entry system for the bonds is discontinued.

To facilitate subsequent transfers, all bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such bonds are credited, which may or may not be the beneficial owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct and Indirect Participants to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

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Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the bonds unless authorized by a Direct Participant in accordance with DTC’s Money Market Instrument Procedures. Under its usual procedures, DTC mails an “omnibus proxy” to the Province as soon as possible after the applicable record date. The omnibus proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the bonds are credited on the applicable record date (identified in a listing attached to the omnibus proxy).

Principal, premium, if any, and interest payments on the bonds will be made to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC). DTC’s practice is to credit Direct Participants’ accounts, upon DTC’s receipt of funds and corresponding detail information from the Province or the applicable Registrar, on the applicable payment date in accordance with their respective holdings shown on DTC’s records. Payments by DTC Participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name”, and will be the responsibility of such DTC Participant and not of DTC, the Registrar or the Province, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium, if any, and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Province or the Registrar, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the beneficial owners shall be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as securities depository with respect to the bonds at any time by giving reasonable notice to the Province or the Registrar. Under such circumstances, in the event that a successor securities depository is not obtained, bonds in definitive form are required to be printed and delivered to each holder.

The Province may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, bonds in definitive form will be printed and delivered to each holder.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Province believes to be reliable, but is subject to any changes to the arrangements between the Province and DTC and any changes to such procedures that may be instituted unilaterally by DTC.

CDS. CDS is Canada’s national securities depositary clearing and settlement services organization. Functioning as a service utility for the Canadian financial community, CDS provides a variety of computer automated services for financial institutions and investment dealers active in domestic and international capital markets. CDS participants (“CDS Participants”) include banks, investment dealers and trust companies and may include certain of the underwriters and/or certain of their affiliates. Indirect access to CDS is available to other organizations that clear through or maintain a custodial relationship with a CDS Participant. Transfers of ownership and other interests, including cash distributions, in bonds in CDS may only be processed through CDS Participants and will be completed in accordance with existing CDS rules and procedures.

Clearstream. Clearstream Banking, S.A. (“Clearstream”), holds securities for its customers and facilitates the clearance and settlement of securities transactions between Clearstream customers (“Clearstream Participants”) through electronic book-entry changes in accounts of Clearstream Participants, thereby eliminating the need for physical movement of certificates. Clearstream provides to its customers, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream also deals with domestic securities markets in many countries through established depository and custodial relationships.

Clearstream Participants are world-wide financial institutions including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations. Indirect access to Clearstream is available to other

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institutions that clear through or maintain a custodial relationship with an account holder of Clearstream. Clearstream has established an electronic bridge with Euroclear Bank SA/NV (“Euroclear”) as the Operator of the Euroclear System (the “Euroclear Operator”) in Brussels to facilitate settlement of trades between Clearstream and the Euroclear Operator.

Distributions of interest and principal with respect to bonds held beneficially through Clearstream will be credited to cash accounts of Clearstream Participants in accordance with its rules and procedures, to the extent received by the U.S. Depositary for Clearstream.

Euroclear. Euroclear holds securities and book-entry interests in securities for participating organizations and facilitates the clearance and settlement of securities transactions between participants (“Euroclear Participants”) as defined in the Terms and Conditions Governing Use of Euroclear as amended from time to time and between Euroclear Participants and participants in certain other securities settlement systems through electronic book-entry changes in accounts of such participants or through other securities intermediaries.

Euroclear provides Euroclear Participants, among other things, with safekeeping, administration, clearance and settlement, securities lending and borrowing, and related services. Euroclear Participants are investment banks, securities brokers and dealers, banks, central banks, supranationals, custodians, investment managers, corporations, trust companies and certain other organizations. Certain of the underwriters for this offering, or other financial entities involved in this offering, may be Euroclear Participants.

Non-participants in the Euroclear System may hold and transfer book-entry interests in securities through accounts with a Euroclear Participant in the Euroclear System or any other securities intermediary that holds a book-entry interest in the securities through one or more securities intermediaries standing between such other securities intermediary and Euroclear.

Distributions of interest and principal with respect to bonds held beneficially through Euroclear will be credited to cash accounts of Euroclear Participants in accordance with its rules and procedures, to the extent received by the U.S. Depositary for Euroclear.

Global Clearance and Settlement Procedures

Initial settlement for the bonds will be made in immediately available funds.

Secondary market trading between DTC Participants will occur in the ordinary way in accordance with DTC rules. Secondary market trading between CDS Participants will be in accordance with market conventions applicable to transactions in book-based Canadian domestic bonds. Secondary market trading between Clearstream Participants and/or Euroclear Participants will occur in the ordinary way in accordance with the applicable rules and operating procedures of Clearstream and Euroclear and will be settled using the procedures applicable to conventional eurobonds in immediately available funds.

Transfer Between DTC and CDS, Clearstream or Euroclear. Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through CDS Participants, Clearstream Participants or Euroclear Participants, on the other, will be effected in DTC in accordance with DTC rules on behalf of the relevant international clearing system by its U.S. Depositary; however, such cross- market transactions will require delivery of instructions to the relevant international clearing system by the counterparty in such system in accordance with its rules and procedures and within its established deadlines. The relevant international clearing system will, if the transaction meets its settlement requirements, deliver instructions to DTC (in the case of CDS) or to its U.S. Depositary (in the case of Clearstream or Euroclear) to take action to effect final settlement on its behalf by delivering or receiving bonds in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. CDS Participants, Clearstream Participants and Euroclear Participants may not deliver instructions directly to DTC or the respective U.S. Depositary of Clearstream or Euroclear.

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Because of time-zone differences, credits of bonds received in Clearstream or Euroclear as a result of a transaction with a DTC Participant will be made during subsequent securities settlement processing and will be dated the business day following the DTC settlement date. Such credits or any transactions in such bonds settled during such processing will be reported to the relevant Clearstream Participants or Euroclear Participants on such business day. Cash received in Clearstream or Euroclear as a result of sales of bonds by or through a Clearstream Participant or a Euroclear Participant to a DTC Participant will be received with value on the DTC settlement date but will be generally available in the relevant Clearstream or Euroclear cash account only as of the business day following settlement in DTC.

Transfers Between Clearstream, Euroclear and CDS. Cross-market transfers between Clearstream Participants, Euroclear Participants and CDS Participants will be effected in DTC.

When bonds are to be transferred from the account of a CDS Participant to the account of a Clearstream Participant or Euroclear Participant, the CDS Participant will transmit instructions to CDS on settlement date. The Clearstream Participant or Euroclear Participant will transmit instructions to Clearstream or Euroclear at least one business day prior to settlement date. One business day prior to settlement date Clearstream and on settlement date Euroclear, will transmit trade instructions to its respective U.S. Depositary. The beneficial interests in the bonds and payments for such beneficial interests will be transferred in DTC by CDS and the respective U.S. Depositaries for Clearstream and Euroclear.

Although DTC, CDS, Clearstream and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of bonds among participants in DTC, CDS, Clearstream and Euroclear, they are under no obligation to perform or continue to perform such procedures and such procedures may be changed or discontinued at any time.

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TAX MATTERS

Canadian Taxation

Please refer to the statements under “Description of Debt Securities and Warrants—Canadian Income Tax Considerations” in the Prospectus for a summary of the principal Canadian federal income tax consequences generally applicable to a holder of bonds acquired pursuant to this Prospectus Supplement who, for the purposes of the Income Tax Act (Canada), is a Non-Resident Holder (as defined in the Prospectus).

United States Taxation

Please refer to the statements under “Description of Debt Securities and Warrants—United States Income Tax Considerations” in the Prospectus for a summary of the material United States federal income tax considerations regarding the purchase, ownership and disposition of the bonds to U.S. Holders (as defined in the Prospectus) who are initial purchasers of bonds purchasing bonds at the price set forth on the cover page of this Prospectus Supplement. Under legislation enacted in 2017, certain United States persons that use an accrual method of accounting for tax purposes may be required to include certain amounts in taxable income in respect of the bonds no later than the time such amounts are reflected on their financial statements—which may be earlier than would be the case under otherwise generally applicable U.S. federal income tax principles. Investors should consult their own tax advisors regarding the possible impact of this legislation on their investment in the bonds.

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UNDERWRITING

Subject to the terms and conditions set forth in the underwriting agreement dated June 1, 2022, each of the underwriters named below, for whom CIBC World Markets Corp., National Bank of Canada Financial Inc., RBC Capital Markets, LLC and TD Securities (USA) LLC are acting as representatives, have severally agreed to purchase, and the Province has agreed to sell to each of them severally, the respective principal amounts of bonds set forth opposite its name below.

Underwriter	Principal Amount
CIBC World Markets Corp.	US$	210,000,000
National Bank of Canada Financial Inc.		210,000,000
RBC Capital Markets, LLC		210,000,000
TD Securities (USA) LLC		210,000,000
BMO Capital Markets Corp.		50,000,000
Scotia Capital (USA) Inc.		50,000,000
Barclays Bank PLC		40,000,000
Casgrain and Company Limited		10,000,000
Desjardins Securities Inc.		10,000,000
Total	U.S.$	1,000,000,000

Under the terms and conditions of the underwriting agreement, the underwriters have agreed to take and pay for all of the bonds, if any are taken.

We have undertaken to the underwriters to use all reasonable efforts to have the bonds listed on the Euro MTF Market of the Luxembourg Stock Exchange as soon as possible after the closing of the issue. We cannot guarantee that the listing will be approved, and settlement of the bonds is not conditional on obtaining the listing.

The underwriters have advised the Province that they propose initially to offer the bonds to the public at the public offering price set forth on the cover page of this Prospectus Supplement. After the bonds are released for sale to the public, the offering price terms may be changed.

The bonds are offered for sale in Canada, the United States, the United Kingdom and those jurisdictions in Europe and Asia where it is legal to make such offers.

Certain of the Underwriters may not be U.S. registered broker-dealers and accordingly will not effect any sales within the United States except in compliance with applicable U.S. laws and regulations, including the rules of the Financial Industry Regulatory Authority (“FINRA”).”

Purchasers may be required to pay stamp taxes and other charges in accordance with the laws and practices of the country of purchase in addition to the public offering price set forth on the cover page of this Prospectus Supplement.

We expect that delivery of the bonds will be made against payment therefor on or about June 8, 2022, which is five business days following the date of pricing of the bonds (this settlement cycle being referred to as “T+5”). Under Rule 15c6-1 of the Exchange Act, trades in the secondary market generally are required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade their bonds on the date of pricing or the next two succeeding business days will be required, by virtue of the fact that the bonds initially will settle in T+5, to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement. Purchasers of bonds who wish to trade their bonds on the date of pricing or the next two succeeding business days should consult their own advisors.

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The bonds are a new issue of securities with no established trading market. The Province has been advised by the underwriters that certain of the underwriters intend to make a market in the bonds, but are not obligated to do so and may discontinue market making at any time without notice. No assurance can be given as to the liquidity of, or the trading market for, the bonds.

In connection with the issue of the bonds, the underwriters (or persons acting on their behalf) may over-allot bonds or effect transactions with a view to supporting the market price of the bonds at a level higher than that which might otherwise prevail. However, there is no assurance that the underwriters (or persons acting on their behalf) will undertake stabilization action. Any stabilization action may begin on or after the date on which adequate public disclosure of the terms of the offer of the bonds is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue date of the bonds and 60 days after the date of the allotment of the bonds. Any stabilization action or over-allotment must be conducted by the underwriters (or persons acting on their behalf) in accordance with all applicable laws and rules.

The Province has agreed to indemnify the underwriters against certain liabilities, including liabilities under the U.S. Securities Act of 1933, as amended (the “Securities Act”).

The Province estimates that it will pay approximately U.S.$326,000 for expenses associated with the offering of the bonds. Save for the underwriting discount, so far as we are aware, no person involved in the issue of the bonds has an interest material to the offer.

Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.

In addition, the underwriters have advised us that they or their affiliates might engage in the activities described in this paragraph, and that such activities could, and likely would, be undertaken by the underwriters or their affiliates without our being informed and without our consent or approval. In the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade securities and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and activities may involve securities and/or instruments of ours or our affiliates. If the underwriters or any of their affiliates have a lending relationship with us, the underwriters or their affiliates may hedge their credit exposure to us consistent with their customary risk management policies. Typically, the underwriters and their affiliates would hedge such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in our securities, including potentially the bonds offered hereby. Any such credit default swaps or short positions could adversely affect future trading prices of the bonds offered hereby. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

Each of the underwriters has agreed that it has not offered, sold or delivered, and it will not offer, sell or deliver any of the bonds, directly or indirectly, or distribute this Prospectus Supplement or accompanying Prospectus or any other offering material relating to the bonds, in or from any jurisdiction except under circumstances that will to the best of its knowledge and belief after reasonable inquiry result in compliance with the applicable laws and regulations thereof and which will not impose any obligations on the Province except as set forth in the underwriting agreement.

Notice to Prospective Investors in the European Economic Area

This Prospectus Supplement has been prepared on the basis that all offers of bonds, if any, will be made in any Member State (a “Member State”) of the European Economic Area pursuant to an exemption under

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Article 1(4) of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (the “Prospectus Regulation”), from the requirement to produce or publish a prospectus for offers of the bonds. Accordingly, any person making or intending to make any offer within a Member State of the bonds which are the subject of an offering contemplated in this Prospectus Supplement may only do so in circumstances in which no obligation arises for the Province or any underwriter to produce or publish a prospectus for such offer.

Neither the Province nor any underwriter has authorized, nor do they authorize, the making of any offer of bonds in circumstances in which an obligation arises for the Province or any underwriter to publish a prospectus or supplement a prospectus pursuant to the Prospectus Regulation for such offer.

Neither the Province nor any underwriters have authorized, nor do they authorize, the making of any offer of the bonds through any financial intermediary, other than offers made by the relevant underwriters which constitute the final placement of the bonds contemplated in this Prospectus Supplement.

Each of the underwriters has represented and agreed that it has not made and will not make an offer of bonds to the public in any Member State except that it may make an offer of such bonds to the public in that Member State:

(a) to any legal entity which is a qualified investor as defined in Article 2(e) of the Prospectus Regulation (a “Qualified Investor”);

(b) to fewer than 150 natural or legal persons (other than Qualified Investors), as permitted under the Prospectus Regulation subject to obtaining the prior consent of the relevant underwriter or underwriters nominated by the Province for any such offer; or

(c) in any other circumstances falling within Article 1(4) of the Prospectus Regulation,

provided that no such offer of bonds shall require the Province or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.

For the purposes of this provision, the expression an “offer of bonds to the public” in relation to any bonds in any Member State means the communication in any form and by any means or presenting sufficient information on the terms of the offer and the bonds to be offered so as to enable an investor to decide to purchase or subscribe for the bonds.

Notice to Prospective Investors in the United Kingdom

Each underwriter, on behalf of itself and each of its affiliates that participates in the initial distribution of the bonds, has represented and agreed

that:

(a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000, as amended (the “FSMA”)) received by it in connection with the issue or sale of the bonds in circumstances in which Section 21(1) of the FSMA does not apply to the Province; and

(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the bonds in, from or otherwise involving the United Kingdom.

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This document is for distribution only to persons who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”), (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations, etc.”) of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This document is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons.

Notice to Prospective Investors in Hong Kong

The bonds will not be offered or sold in Hong Kong, by means of this Prospectus Supplement or any document, other than (i) to persons whose ordinary business is to buy or sell shares or debentures (whether as principal or agent); (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong (the “SFO”) and any rules made under the SFO, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong (the “C(WUMP)O”) or which do not constitute an offer to the public within the meaning of the C(WUMP)O.

Notice to Prospective Investors in Singapore

This document has not been, and will not be, registered as a prospectus with the Monetary Authority of Singapore (the “MAS”), and the bonds will be offered pursuant to exemptions under the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”). Accordingly, this document or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the bonds may not be circulated or distributed, nor may the bonds be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to any person in Singapore other than (i) to an institutional investor (as defined in Section 4A of the SFA) pursuant to Section 274 of the SFA, (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the bonds are subscribed or purchased in reliance of an exemption under Section 274 or 275 of the SFA, the bonds shall not be sold within the period of 6 months from the date of the initial acquisition of the bonds, except to any of the following persons:

(a) an institutional investor;

(b) a relevant person; or

(c) any person pursuant to an offer referred to in Section 275(1A) of the SFA,

unless expressly specified otherwise in Section 276(7) of the SFA.

Where the bonds are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

(a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,

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securities (as defined in Section 2(1) of the SFA) or securities-based derivatives contracts (as defined in Section 2(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferable within six (6) months after that corporation or that trust has acquired the bonds pursuant to an offer made under Section 275 of the SFA except:

(i) to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or (in the case of such corporation) where the transfer arises from an offer referred to in Section 276(3)(i)(B) of the SFA or (in the case of such trust) where the transfer arises from an offer referred to in Section 276(4)(i)(B) of the SFA;

(ii) where no consideration is or will be given for the transfer;

(iii) where the transfer is by operation of law; or

(iv) pursuant to Section 276(7) of the SFA.

Notice to Prospective Investors in Japan

The bonds have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Law No. 25 of 1948, as amended) (the “FIEA”) and, accordingly, each of the underwriters, on behalf of itself and each of its affiliates that participates in the initial distribution of the bonds, undertakes that it has not offered or sold and will not offer or sell any bonds, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (as defined under Item 5, Paragraph 1, Article 6 of the Foreign Exchange and Foreign Trade Control Law (Law No. 228 of 1949, as amended)) or to others for re-offering or resale, directly or indirectly, in Japan or to, or for the benefit of, a resident of Japan except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the FIEA and any other applicable laws, regulations and ministerial guidelines promulgated by the relevant Japanese governmental and regulatory authorities and in effect at the relevant time.

Notice to Prospective Investors in the United Arab Emirates

The bonds have not been, and are not being, publicly offered, sold, promoted or advertised in the United Arab Emirates (including the Abu Dhabi Global Market and the Dubai International Financial Centre) other than in compliance with the laws, regulations and rules of the United Arab Emirates, the Abu Dhabi Global Market and the Dubai International Financial Centre governing the issue, offering and sale of securities. Further, this prospectus supplement and the accompanying prospectus do not constitute a public offer of securities in the United Arab Emirates (including the Abu Dhabi Global Market and the Dubai International Financial Centre) and are not intended to be a public offer. This prospectus supplement and the accompanying prospectus have not been and will not be approved by or filed with the Central Bank of the United Arab Emirates, the Securities and Commodities Authority, the Financial Services Regulatory Authority or the Dubai Financial Services Authority.

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LEGAL MATTERS

The validity of the bonds will be passed upon on our behalf by McDougall Gauley LLP as Canadian counsel for the Province, and on behalf of the underwriters by MLT Aikins LLP as Saskatchewan counsel for the underwriters. Certain U.S. legal matters in connection with the offering of the bonds will be passed upon on behalf of the Province by Paul, Weiss, Rifkind, Wharton & Garrison LLP, Toronto, Ontario and on behalf of the underwriters by Davis Polk & Wardwell LLP, New York, New York.

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AUTHORIZED AGENT IN THE UNITED STATES

The Authorized Agent of the Province in the United States is Khawar Nasim, at the Consulate General of Canada, 466 Lexington Avenue, 20th Floor New York, New York 10017.

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FORWARD-LOOKING STATEMENTS

The following documents relating to the Province’s securities offered by this Prospectus Supplement may contain forward-looking statements:

(a) this Prospectus Supplement (including the 2022-23 Provincial Budget annexed hereto); and

(b) the Prospectus.

Forward-looking statements are statements that are not historical facts, including statements about the Province’s beliefs and expectations. These statements are based on current plans, estimates and projections and are subject to risks, uncertainties and assumptions that are not realized that could cause the Province’s actual results and the timing of certain events to differ materially from those expressed in the forward-looking statements. You should understand that many important factors, in addition to those discussed in this Prospectus Supplement or the Prospectus, could cause the Province’s results to differ materially from those expressed in the forward-looking statements. The forward-looking statements speak only as of the date they are made and the Province undertakes no obligation to update publicly or otherwise revise any forward- looking statements, whether as a result of new information or future events or otherwise, except as may be required by law.

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GENERAL INFORMATION

We have undertaken to the underwriters to use all reasonable efforts to have the bonds listed on the Euro MTF Market of the Luxembourg Stock Exchange as soon as possible after the closing of the issue. We cannot guarantee that these applications will be approved, and settlement of the bonds is not conditional on obtaining the listing.

The bonds have been accepted for clearance through DTC, CDS, Clearstream and Euroclear. The Common Code for the bonds is 248993693, the ISIN for the bonds is US803854KQ02 and the CUSIP number for the bonds is 803854 KQ0.

The issue and sale of the bonds was authorized by Order of the Lieutenant Governor in Council of the Province of Saskatchewan No. 759/2001, dated October 16, 2001 and Order of the Lieutenant Governor in Council of the Province of Saskatchewan No. 205/2022, dated May 19, 2022, each made pursuant to the Financial Administration Act, 1993.

The Province is subject to claims in the ordinary course. These claims arise from legal action, either in progress or threatened, in respect of matters such as expropriation, contract and tax disputes. In view of the inherent difficulty of predicting the outcome of such claims, the Province cannot state what the eventual outcome of such claims will be; however, except as disclosed in this Prospectus Supplement and in the Prospectus, based on current knowledge, the Province believes that it is not involved in any such claims which would materially adversely affect the financial position of the Province.

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SOURCES OF INFORMATION

Information included herein, which is designated as being taken from a publication of the Province or of Canada, or an agency or instrumentality of either, is included or incorporated herein on the authority of such publication as a public official document. All financial information of the Province included herein is obtained from the Public Accounts for the Province of Saskatchewan, the Government of Saskatchewan’s annual report and budget, or other documents prepared by representatives of Treasury Management Branch, Province of Saskatchewan acting in their official capacities.

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ISSUER

Province of Saskatchewan

Treasury Management Branch

6th Floor

2350 Albert Street

Regina, SK S4P 4A6

UNDERWRITERS

CIBC World Markets Corp. 300 Madison Avenue, 5th Floor New York, New York 10017 U.S.A.	National Bank of Canada Financial Inc. 65 East 55th Street, 8th Floor New York, New York 10022 U.S.A.
RBC Capital Markets, LLC Brookfield Place, 200 Vesey Street, 8th Floor New York, New York 10281 U.S.A.	TD Securities (USA) LLC 1 Vanderbilt Avenue, 11th Floor New York, New York 10017 U.S.A.
BMO Capital Markets Corp. 151 West 42nd Street, 9th Floor New York, NY 10036 U.S.A.	Scotia Capital (USA) Inc. 250 Vesey Street New York, New York 10281 U.S.A.
Barclays Bank PLC 5 The North Colonnade, Canary Wharf, London, E14 4BB	Casgrain and Company Limited 1200 McGill College, 21st Floor, Montreal, Quebec, H3B 4G7 Canada
Desjardins Securities Inc. 1170 Peel Street, Suite 300 Montreal, Quebec, H3B 0A9 Canada

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REGISTRAR, FISCAL, TRANSFER AND PRINCIPAL PAYING AGENT AND DTC CUSTODIAN

The Bank of New York Mellon

240 Greenwich Street, 7E

New York, New York 10286

U.S.A.

LEGAL ADVISORS

to the Issuer as to U.S. law Paul, Weiss, Rifkind, Wharton & Garrison LLP Toronto-Dominion Centre 77 King Street West, Suite 3100, P.O. Box 226 Toronto, Ontario M5K 1J3 Canada	to the Underwriters as to U.S. law Davis Polk & Wardwell LLP 450 Lexington Avenue New York, NY 10017 United States
as to Canadian law McDougall Gauley LLP 1881 Scarth Street, Suite 1500 Regina, Saskatchewan S4P 4K9 Canada	as to Canadian law Stikeman Elliott LLP 5300 Commerce Court West 199 Bay Street Toronto, Ontario M5L 1B9 Canada MLT Aikins LLP 1500 Hill Center 1 1874 Scarth Street Regina, SK S4P 4E9 Canada

S-31

ANNEX A— 2022-23 PROVINCIAL BUDGET

See attached.

A-1

Minister’s Message

I am pleased to table the 2022-23 Budget and supporting documents for public discussion and review.

Saskatchewan’s economy and finances are back on track. A deficit of $463 million is forecast for 2022-23, a $2.1 billion improvement over last year’s budget.

Our plan to balance is on track. Smaller deficits of $384 million in 2023-24, $321 million in 2024-25 and $165 million in 2025-26 are expected for the medium-term. Our budget is projected to be balanced in 2026-27.

Revenue is forecast at $17.2 billion in this budget, up $2.7 billion from last year’s budget. Taxation revenue, due to higher income and sales tax revenue projections in a strong economy, as well as higher non-renewable resource revenue due to higher potash and oil price expectations, are driving the growth.

Expense of $17.6 billion is forecast in the 2022-23 Budget, an increase of $531.0 million, or 3.1 per cent from last year’s budget. This budget strengthens and protects Saskatchewan, with key investments in priority areas including health, social services and assistance, education and protection of persons and property.

The province’s economy is back on track, growing past pre-pandemic levels with 3.5 per cent real GDP growth expected for 2021, and 3.7 per cent growth projected for 2022, even as Saskatchewan protects lives and livelihoods through the end of the pandemic.

This budget makes key investments to help make our resurgent economy even stronger. And the 2022-23 Budget builds a better Saskatchewan with a record $3.2 billion capital plan investing in needed infrastructure – hospitals, schools, highways, municipal and Crown capital projects.

Our province has a vastly improved financial picture, and a solid plan to return to balance.

Our economy is rebounding, helping to ensure the services, programs and infrastructure investments Saskatchewan people value are sustainable today and into the future.

Saskatchewan people are strong, resilient and optimistic. They know our best days lie ahead. Saskatchewan is back on track.

Honourable Donna Harpauer

Deputy Premier and Minister of Finance

Table of Contents

Minister’s Message

Government Direction For 2022-23
Back On Track	6
2022-23 Saskatchewan Capital Plan	22
Technical Papers
The Saskatchewan Economy	30
2022-23 Fiscal Outlook	41
2022-23 Borrowing and Debt	56
2022-23 Revenue Initiatives	60
Saskatchewan’s Tax Expenditures	64
2022 Intercity Comparison of Taxes and Utilities	69
2021-22 Budget Update Third Quarter	73
Budget Financial Tables
Budget	80
Statement of Accumulated Deficit	81
Statement of Change in Net Debt	81
Schedule of Pension Liabilities	82
Schedule of Capital Assets	82
Schedule of Public Debt	83
Schedule of Revenue	84
Glossary of Financial Terms	85

Government Direction – 2022-23

BACK ON TRACK

Saskatchewan is back on track. The province’s economy is growing past pre-pandemic levels, moving forward to a brighter future.

Saskatchewan’s finances are strong. A deficit of $463 million is projected in the 2022-23 Budget, a $2.1 billion improvement over 2021-22. Saskatchewan’s fiscal plan to balance by 2026-27 is on track, with successively stronger results each year, achieved through careful management of spending and prudent revenue forecasts.

This Budget strengthens and protects Saskatchewan, with record investment into priority programs, services and capital projects in health care, education, social services, and the protection of people and property.

The 2022-23 Budget aligns with Saskatchewan’s Growth Plan purpose, to build a better quality of life for Saskatchewan people. This Budget includes funding for thousands of additional surgeries, to reduce wait times.

An agency dedicated to recruit doctors, nurses and other health care professionals is part of this Budget. Increased funding to hire continuing care aides to help deliver long-term care, is included in this Budget. And it includes increases to recruit and retain physicians, hire and train more nurses, and to hire more paramedics.

This Budget helps make access to high-quality child care more affordable. It includes increased assistance for those who are among the province’s most vulnerable. Community-based organizations will get a lift in this Budget and our province becomes safer through investments to address and reduce crime.

Budget 2022-23 is on track to help Saskatchewan’s growing economy become even stronger. Saskatchewan will build on traditional areas of economic strength like food, fuel, fertilizer and forestry, while also expanding new opportunities both here at home and in export markets abroad.

The rapid growth of streaming services has created unprecedented opportunities in the film and television industry. This Budget includes an increased grant to attract investment in new film and television productions here in Saskatchewan.

This Budget establishes a Saskatchewan Indigenous Investment Finance Corporation to provide loan guarantees for projects that will help Indigenous people to participate in our growing economy. It also invests in the province’s trade and investment strategy and further strengthens the Saskatchewan Value-added Agriculture Incentive.

The 2022-23 Budget will build a better Saskatchewan, keeping the province on track with a capital plan focused on the Growth Plan Goal to invest $30.0 billion into infrastructure by 2030.

Budget
For the Year Ended March 31
	2019-20			2020-21			2021-22			2021-22			2022-23
(millions of dollars)	Actual			Actual			Budget			Forecast			Budget
Revenue		14,887			14,524			14,478			17,496			17,158
Expense		15,206			15,651			17,089			19,681			17,621
Deficit		(319	)		(1,127	)		(2,611	)		(2,185	)		(463	)

  6   Budget 2022-23

The 2022-23 Budget includes investment into new hospitals in Prince Albert and Weyburn, into long-term care facilities and into schools in our cities and in smaller centres.

The capital plan includes more than 1,100 kilometres of highways, on track with the province’s Growth Plan goal of 10,000 kilometres of new highway by 2030.

Vital municipal infrastructure is part of the capital plan, along with Crown capital for power generation and distribution, telecommunications networks, distribution of natural gas, and other needed services – to create jobs, to help ignite our economy and to meet the needs of Saskatchewan people.

Saskatchewan is back on track with a vastly improved financial picture and a plan to return the Budget to balance. The economy is resurgent, helping to ensure the services, programs and infrastructure investments Saskatchewan people value are sustainable today and into the future.

Economic Growth

Saskatchewan’s real GDP is expected to have grown by 3.5 per cent in 2021 and is expected to grow by 3.7 per cent this year, a significant recovery from the 4.9 per cent contraction in 2020 created by the pandemic. The rebound was despite a drop in crop production due to the widespread drought in 2021, although the impact of the drop in production was partially offset by increased commodity prices.

Employment and retail sales rebounded in 2021, and potash and oil prices and production surged due to global demand. Housing starts, manufacturing sales, exports and wholesale trade all grew well past pre-pandemic levels in 2021.

The province’s real GDP is expected to sustain growth over the medium term.

Saskatchewan has the second-highest rate of job growth in Canada so far in 2022, and over the past year 30,000 jobs have been created.

While volatile world events have made commodity prices difficult to forecast, oil prices are projected to remain strong in 2022, and industry investment is expected to increase by 17.5 per cent to $3.0 billion in Saskatchewan in 2022. Inflation in Canada hit its highest level in nearly a decade in 2021 at 3.4 per cent, while Saskatchewan’s was the lowest among provinces at 2.6 per cent.

While inflation remains a concern, improvement related to supply chain issues and Bank of Canada interest rate increases are expected to have a cooling effect and lead to more normal price levels near the end of 2022.

Perhaps more telling than economic indicators alone, a strong signal that Saskatchewan’s economy is back on track is the unprecedented level of private investment announced in the province over the past several months.

A dozen companies ranging from BHP, to Richardson International, to Federated Co-operatives, Cargill, Viterra and AGT Foods, have announced more than $13.6 billion in investment into projects related to potash, oilseed crushing and refining, pulp and wheat pulp, renewable diesel and others.

These investments into the value-added agriculture, mining, forestry, and oil and gas sectors are projected to create nearly 9,000 construction jobs and 2,330 permanent jobs when construction is complete.

  Budget 2022-23     7  

Major Projects in Saskatchewan

Sector/Sub-sector	Company	Topic
AgriValue
	Richardson International Inc.	Doubling canola crush capacity at Yorkton plant
	Viterra	Oilseed Crush and Refinery (Regina)
	Cargill	Oilseed Crush (Regina)
	Ceres Global Ag	Oilseed Crush (Northgate)
	Red Leaf Pulp	Wheat straw-based pulp mill
Mining- Exploration
	BHP	Jansen Lake potash mine
	Saskatchewan Mining and Minerals Inc.	Fertilizer production upgrade (sulphate of potash)
Forestry- Pulp
	Paper Excellence	Prince Albert Pulp Mill
Forestry- Engineered Wood Products
	One Sky Forest Products	OSB mill
Forestry- Lumber
	Dunkley Lumber	Lumber mill expansion
O&G- Downstream
	Federated Co-operatives Ltd. and AGT Foods	Canola crush and renewable diesel
O&G Transportation & Storage
	Whitecap Resources and Federated Co-operatives Ltd.	Capture CO at Co-op Ethanol  Complex and Co-op Refinery, transport and sequester at Weyburn
Totals	Estimate Investment	Permanent Jobs Estimate	Construction Jobs Estimate
	$13,650,000,000	2,330	8,935

Financial Strength

Saskatchewan’s finances are back on track and are forecast to steadily improve over the medium term.

Saskatchewan’s 2022-23 Budget forecasts a $463 million deficit, a $2.1 billion improvement

compared to the 2021-22 Budget.

Successively smaller deficits of $384 million in 2023-24, $321 million in 2024-25 and $165 million in 2025-26 are projected for the medium term. With continued careful expense management and prudent revenue forecasts, a balanced budget is projected in 2026-27.

Revenue of $17.2 billion forecast in the 2022-23 Budget is up $2.7 billion, or 18.5 per cent, from last

  8     Budget 2022-23  

year’s budget. All categories of revenue are forecast to increase in the 2022-23 Budget over the 2021-22 Budget, with the exception of net income from Government Business Enterprises (GBEs).

Taxation revenue is forecast to be $8.1 billion in 2022-23, up $854.0 million over last year’s budget, mainly due to higher forecast income and sales tax revenue. Non-renewable resource revenue is forecast to be $2.9 billion, up $1.6 billion over last budget, largely driven by higher potash and oil price expectations.

This Budget improves revenue stability and fairness. Tobacco tax is increasing by two cents per cigarette, from 27 cents to 29 cents, and eight cents per gram for loose tobacco, effective March 24, 2022. Additional revenue from the increase is expected to be $12.1 million in 2022-23.

Provincial Sales Tax is being applied to admission and entertainment charges – to sporting events, concerts, museums, fairs, gym memberships, green fees, among others – following the federal Goods and Services Tax treatment, effective October 1, 2022.

There will be exemptions for certain situations including school, university or minor league sports and amateur productions with unpaid participants. Also, for recreational programs like sports, dance or music provided by schools or non-profits for those 14 years of age and under, and fundraising events where part of the cost of admission is considered a donation to a charity. Revenue from this change is expected to be $10.5 million in 2022-23 and $21.0 million annually.

The Province is exempting audio books from PST, as they are used widely for educational purposes and by the visually impaired. The expected revenue impact is approximately $100,000 this year.

Education Property Tax (EPT) mill rates are being adjusted slightly, including a decrease to the differential between the highest and lowest EPT mill rates, to improve overall fairness. Slight

increases to mill rates, combined with forecasted base growth, are expected to total about $20.0 million in 2022-23.

Expense of $17.6 billion is projected in the 2022-23 Budget, an increase of $531.3 million, or 3.1 per cent, from last year’s budget. Key investments across most categories, including health, social services and assistance, and education have increased the expense forecast this year, over last year’s budget.

Saskatchewan’s net debt-to-GDP ratio is one the lowest in Canada among the provinces, demonstrating a strong fiscal foundation.

Chart 1: Projected Net Debt as a % of GDP

As at March 31

Sources: Net Debt: Jurisdictions most recent data (as of March 4, 2022). GDP: SK: Saskatchewan Ministry of Finance; All others: Statistics Canada, IHS Markit.

Total public debt is forecast to be $30.0 billion at March 31, 2023, a $2.3 billion increase from the 2021-22 Budget. Much of the new borrowing is for capital investment to build hospitals, schools, highways, municipal and Crown infrastructure, as well as for operations.

Responsible management of the province’s finances has secured Saskatchewan the second highest credit ratings in the country, when the ratings from the three major agencies – Moody’s Investors Service, Standard and Poor’s and DBRS Morningstar, are combined.

  Budget 2022-23     9  

(More detailed information is available in the 2022-23 Fiscal Outlook, beginning on page 41, in the 2022-23 Revenue Initiatives section beginning on page 60 and in 2022-23 Borrowing and Debt which begins on page 56.)

Investing in Saskatchewan People

The 2022-23 Budget strengthens and protects Saskatchewan, with investments into priority programs and services in health care, education, social services and the protection of people and property.

Health

The Budget delivers record health funding of $6.8 billion, up $288.2 million or 4.4 per cent from last year’s budget.

Funding for health primarily includes the Ministry of Health, the Saskatchewan Health Authority, eHealth, the Saskatchewan Cancer Agency and 3sHealth.

The Ministry of Health Budget is $6.4 billion in 2022-23, an increase of $318.7 million or 5.2 per cent from 2021-22. This includes a $277.1 million increase for the Saskatchewan Health Authority, bringing the total for the SHA to $4.2 billion.

An increase of $21.6 million in this Budget will address the surgical waitlist, and fund thousands of additional surgeries in 2022-23, the first year of a three-year plan to deliver on the largest volume of surgical procedures in the history of the province.

The aggressive plan targets a return to pre-COVID surgical wait time levels by the end of March 2025.

A $17.0 million increase in this Budget supports our seniors to live safely and comfortably, including $4.8 million for home care services, $4.1 million to provide high-dose influenza vaccine to adults 65 and older, $1.6 million to operate the Meadow Lake Northwest Community Lodge and $6.5 million for an additional 117 continuing care aide positions.

These new continuing care aide hires represent the second year of a three-year, $18.4 million Government commitment to expand continuing care aide positions by 300, to work in long-term care and in existing and expanded home care services, including in rural and remote areas.

Through the first two years of the commitment, 225 new positions have been created, and the final 75 will be funded next fiscal year.

A $4.9 million increase for CT and MRI scans is included in this Budget. It will allow thousands more patients to receive medical imaging services in 2022-23, and bring down wait times for these services which grew during the pandemic.

This Budget will establish a new and independent agency dedicated to recruiting and retaining health care workers. It will also support and invest in health care workers, and build a more robust workforce.

The 2022-23 Budget includes a $1.5 million increase to support recruitment initiatives including the development of a settlement and relocation incentive program to recruit health care workers to Saskatchewan from the Philippines, assisting in filling critical and hard-to-fill positions.

The goal is to recruit 300 health sector employees from the Philippines over the next two years, with phase one in 2022-23 recruiting 150. It is a

  10     Budget 2022-23  

collaborative initiative between the Ministry of Health and the Ministry of Immigration and Career Training.

There is also $3.5 million in this Budget for physician recruitment and retention initiatives, particularly targeting family physicians working in rural areas of the province.

Key commitments will strengthen and expand hospital and emergency care in urban and rural communities. There is $12.5 million in new funding for 11 additional intensive care unit (ICU) beds bringing the total to 90 across the province in 2022-23. It’s the first year of a three-year strategy to add 31 ICU beds across the province, to a total 110 by 2024-25.

There is a $3.0 million increase in this Budget for 10 high acuity beds at the Regina General Hospital. This will enhance care for patients with more complex medical needs – higher needs than traditional care but less than intensive care. This adds flexibility, and eases demand on intensive care units.

This Budget provides $2.2 million to fund more specialized care in the Neonatal ICU at Prince Albert’s Victoria Hospital.

A $10.8 million increase in Emergency Medical Services will improve vital services in rural and remote areas. The increase will fund new paramedic positions for ambulance services, Community Para-medicine and will enhance the Medical First Responder Program.

This Budget invests $470.0 million into mental health and addictions programs and services – seven per cent of total health care spending – including a targeted investment of $8.0 million over last year, representing the highest investment ever in Saskatchewan for these programs and services.

The increase will fund initiatives that provide effective counselling and treatments and introduce further proactive prevention measures. New targeted investments include $2.1 million to add addiction spaces in high need areas in treatment centres across the province.

The Saskatchewan Cancer Agency will receive a further $15.8 million or 7.7 per cent increase in the 2022-23 Budget, bringing their annual grant to $219.8 million, the highest ever.

This includes funding for drugs and other therapies, a new medical oncologist to manage the Oncology Residency Program at the College of Medicine, expansion of the Bone Marrow Transplant Program, investments in screening programs for various cancers and other investments in front line services, including supporting access to treatment closer to home.

This year’s budget provides $95.0 million to sustain the ongoing pandemic response and continue protecting Saskatchewan people in the transition to living with COVID-19.

The funding covers personal protective equipment, support for 58 temporary acute care beds in Regina and Saskatoon, and compensation and operating costs for pressures expected to continue in 2022-23.

Education

The 2022-23 Budget includes $3.8 billion for education, up $47.2 million or 1.3 per cent from 2021-22.

Spending for education across government includes the ministries of Education, Advanced Education, and Immigration and Career Training and also includes Saskatchewan Polytechnic, Regional colleges, the Saskatchewan Student Aid

  Budget 2022-23     11  

Fund, and the Saskatchewan Apprenticeship and Trade Certification Commission.

The 2022-23 Ministry of Education Budget provides record support of $2.9 billion, an increase of $219.9 million or 8.3 per cent over last year, for Prekindergarten to Grade 12 students, early learners and school and child care staff.

Saskatchewan’s 27 school divisions will receive $1.99 billion in operating funding for the 2022-23 school year, a $29.4 million increase – fully funding the 2.0 per cent salary increase as part of the Teachers’ Collective Bargaining Agreement, and provides an additional $6.0 million in learning supports for students.

A new $7.0 million fund will allow school divisions to hire up to 200 additional full-time educational assistants for the 2022-23 school year, to support students and manage increasingly diverse classrooms.

Historical high schools and qualified independent schools will receive an increase of $2.6 million to support enrolment and the creation of a new Qualified Independent School category.

Affordable child care is a key priority in the 2022-23 Budget. Funding for child care and early learning is $309.6 million in this Budget, including funding provided through the Federal-Provincial Early Years agreements.

Of that funding $4.3 million will create 6,100 new child care spaces in centres and family child care homes as part of the Province’s goal to create 28,000 new licensed spaces over the next five years.

Starting in February 2022, parent child care fees were reduced by up to 50 per cent in licensed care.

This year’s funding will support further reducing parent fees as early as September 2022.

This Budget also includes early learning and child care investments of $2.3 million for inclusion of children with disabilities, $8.0 million for preventative maintenance and repair of child care facilities and $11.4 million for training initiatives and supports for early childhood educators.

This Budget also provides a $655,000 increase to expand the Early Childhood Intervention Program to 200 additional children, to address increased demand and waitlists for young children experiencing developmental delays and disabilities.

Community-based organizations that provide early years outreach, life skills development and literacy programming will receive a $728,000 increase.

Through the Ministry of Advanced Education, a total of $740.3 million, an increase of $5.6 million, continues a unique multi-year investment into post-secondary institutions and includes funding to train more nurses.

The 2022-23 Budget includes $30.0 million for the second year of a two-year, $60.0 million funding plan for the post-secondary sector, with a focus on shared priorities including COVID-19 recovery, revenue generation, sector collaboration and achieving priorities in Saskatchewan’s Growth Plan.

The Budget includes a $4.9 million increase to expand nurse training by 150 seats, a critical component of meeting health care needs in the province, when combined with recruitment and retention efforts related to health care workers.

The Budget provides $684.1 million in operating and capital grants to post-secondary institutions

  12     Budget 2022-23  

including $445.9 million for the University of Saskatchewan, University of Regina and the federated and affiliated colleges.

There is $168.5 million for Saskatchewan Polytechnic, the Saskatchewan Indian Institute of Technologies and the Dumont Technical Institute, $35.3 million for Saskatchewan’s Regional Colleges and $31.0 million for capital projects and preventative maintenance and renewal throughout the post-secondary sector.

Budget 2022-23 includes nearly $38.0 million for student supports. This includes $27.0 million to support the student loan program, which will provide repayable and non-repayable financial assistance to more than 20,000 students, and $10.6 million for scholarships, including $7.1 million for the Saskatchewan Advantage Scholarship. In total students will have access to approximately $95.0 million in loans and up-front grants in the coming year.

The Ministry of Immigration and Career Training will invest $114.0 million on training programs to support the development of the labour market. This includes $2.5 million for the Re-Skill Saskatchewan Training Subsidy, a new employer-driven, short-term training program.

This Budget builds upon existing support programs, including the Graduate Retention Program, the most aggressive youth retention program in Canada, providing up to $20,000 in tax credits to eligible post-secondary graduates who remain in Saskatchewan and build their careers here. To date, more than 75,000 post-secondary graduates have claimed these credits by starting their careers in Saskatchewan.

Social Services and Assistance

The 2022-23 Budget for social services and assistance is $1.6 billion, up $67.3 million or 4.3 per cent from 2021-22.

Spending for social services and assistance includes the entire Ministry of Social Services budget, as well as small portions of other executive government ministries and the Saskatchewan Housing Corporation and Saskatchewan Legal Aid Commission.

The Ministry of Social Services will support some of our most vulnerable with a total $1.4 billion in the 2022-23 Budget, up $45.7 million or 3.4 per cent over last year.

The 2022-23 Budget includes $11.4 million to increase Saskatchewan Income Support basic benefits by $30 per month and shelter benefits by up to $25 per month, to help people meet their basic needs as they work to become more self-sufficient and independent.

A $20.0 million investment will launch a new Education and Training Incentive this summer with monthly benefits of up to $200 for individuals to complete education and training programs on their path to employment.

The 2022-23 Budget includes $3.0 million to fulfill the second year of Government’s three-year commitment to increase benefits to seniors through the Seniors Income Plan (SIP). The investment will help low income seniors with maximum payments increasing by $30 to $330 a month. It’s the seventh increase Government has made to SIP since 2008, representing a 267 per cent increase.

Also, the Budget provides up to $11.5 million for the Saskatchewan Housing Benefit, under the National Housing Strategy, to help people with low incomes better afford housing.

Partner agencies will receive $480,000 in funding to expand money management and trustee supports and services to clients with complex needs. And $350,000 extends the Saskatoon Tribal Council STC

  Budget 2022-23     13  

(Sawêyihtotân) project, which supports people experiencing homelessness to find and maintain stable housing in Saskatoon.

An additional $2.0 million investment in prevention programs, so that more children can remain safely at home with their families is part of this Budget. There is also $5.4 million to increase available out of home care resources and add new program delivery supports, and funding to increase staff in priority areas, including $375,000 for mobile child protection workers in Northern communities and $140,000 to strengthen group home oversight.

Government-wide, funding for people with disabilities is projected to be $679.0 million in 2022-23, an increase of $464.1 million, or 216 per cent since 2007-08.

The 2022-23 Budget continues to help make Saskatchewan the best place in Canada for people with disabilities, and includes a $16.7 million utilization increase to the Saskatchewan Assured Income for Disabilities program. There is $8.0 million to support new and changing needs of clients with intellectual disabilities, and a $273,000 increase to fulfill the third year of the commitment to enhance services delivered by the CNIB and Saskatchewan Deaf and Hard of Hearing Services Inc.

In 2022-23, the Ministry will provide over $400.0 million in funding to community-based organizations (CBOs). This includes increased funding of $8.7 million to community-based providers, including $4.9 million for service providers who work with people with intellectual disabilities, $3.2 million for service providers supporting at-risk children, youth and families, and $556,000 to approved private service homes that care for people with intellectual disabilities and mental health issues.

The increase recognizes the critical role CBOs have in helping create positive outcomes and better quality of life for Saskatchewan’s vulnerable people.

The funding for Social Services providers is part of Government’s total $11.2 million, or 2 per cent, increase for community organizations which are also funded through the ministries of Education, Health, Justice and Attorney General and Corrections, Policing and Public Safety.

The increase will help CBOs address operational pressures and recruit and retain qualified staff to continue delivering high-quality services.

Protection of Persons and Property

The 2022-23 Budget includes $936.2 million for the protection of persons and property, an increase of $91.1 million or 10.8 per cent from last year.

Spending for protection of persons and property primarily includes the ministries of Corrections, Policing and Public Safety, Justice and Attorney General, Integrated Justice Services, Labour Relations and Workplace Safety and the Saskatchewan Provincial Safety Agency (SPSA).

Overall, $947.0 million for the justice system and related capital, an increase of $32.7 million or 3.6 per cent compared to last year, will help protect Saskatchewan people and strengthen communities.

An investment of $2.7 million in online access to justice will support self-service and remote options, such as online dispute resolution to ensure citizens have greater support to navigate the system.

An investment of $1.9 million will ensure fair and timely prosecutions through the establishment of a Major Case Assistance Unit, to support the most serious and complex prosecutions.

  14     Budget 2022-23  

Policing in the province will continue to evolve to meet the needs of Saskatchewan people. This Budget includes $50.7 million to create a Provincial Protective Services branch to unite provincial peace officers into a single organizational structure.

The 2022-23 Budget includes $1.6 million to establish a Warrant Enforcement and Suppression Team to target high-risk offenders with outstanding warrants. There is $6.4 million to establish the Saskatchewan Trafficking Response Team and $3.2 million to expand Crime Reduction Teams and $220,000 to expand the Internet Child Exploitation Unit.

The province will continue to invest in the Gang Violence Reduction Strategy, with $4.5 million in this Budget.

An additional $1.7 million in this Budget will enhance the investigative ability of those working with the Criminal Property Forfeiture Fund. An additional $244,000 will expand the services of the Aboriginal Courtworker Program to additional communities, to assist families, adults and youth in criminal and family courts.

The SPSA has a budget of $94.9 million, up $2.8 million or 2.9 per cent, from last year to protect the people of the province and create safe, strong communities. This Budget includes investment to modernize the province’s aerial wildfire suppression fleet, including a Turbo Commander Bird Dog and a CL215T Air Tanker that will be delivered in 2022.

Investing in the Economy

Government is committed to its Growth Plan goals of a strong economy, a growing province and new jobs over the next decade. As Saskatchewan

emerges from the pandemic, the province’s resurgent economy is strengthened further by key investments.

The 2022-23 Budget includes an increase of $8.0 million for the Creative Saskatchewan Production Grant Program for film and television, bringing the total funds available to $10.0 million.

The increase, through the Ministry of Parks, Culture and Sport, will draw more and larger projects to the province. The rise in streaming services means the time is right to attract new investment from the film and television industry to Saskatchewan.

It is estimated Saskatchewan will see $50.0 million of new investment in film and television production, as well as economic activity across the province. This will increase spending in sectors like the hospitality industry, which has been hard hit by the pandemic.

Only Saskatchewan labour, goods and services are eligible for support under the program, ensuring dollars stay in the province. The application window for the 2022-23 Creative Saskatchewan Production Grant for film and television will open this spring.

As Saskatchewan’s economy recovers and moves towards creating new jobs over the next decade, the province will focus on competitiveness, increasing trade, growing exports and ensuring that not only more markets are sought, but that value is added to Saskatchewan products sold around the world.

The 2022-23 Budget includes an increase of $3.1 million to fully fund the International Trade and Investment Strategy, managed by the Ministry of Trade and Export Development. The strategy advances the province’s economic interests abroad, collaborating with partners including the Saskatchewan Trade and Export Partnership, and operating the province’s international office network.

  Budget 2022-23     15  

Saskatchewan expanded its presence this year, establishing international trade offices in the United Kingdom, United Arab Emirates, Mexico and Vietnam, complementing existing offices in Japan, India, Singapore and China.

Officials in these offices will focus on diversifying markets, connecting Saskatchewan businesses with investors and customers. A key component of the overall strategy, they will encourage direct foreign investment and give our exporters an advantage with people who understand the business culture, rules and regulations in key markets.

The Ministry of Agriculture is at the centre of a number of Growth Plan goals including growing crop production to 45.0 million tonnes, increasing livestock receipts to $3.0 billion and growing agri-food exports to $20.0 billion by the year 2030.

Record agri-food exports of $17.5 billion in 2021 show we’re on track to meet our goals.

To continue to foster a strong agri-food sector, increase Saskatchewan’s competitiveness and attract investment, our Government has enhanced the Saskatchewan Value-added Agriculture Incentive. This incentive and others were key to our province’s competitiveness, attracting private investment from global agri-value businesses like Richardson International, Viterra, Ceres Global Ag, Cargill, Federated Co-operatives, AGT Foods and Red Leaf Pulp.

These companies and others are investing billions into Saskatchewan, into new and expanded canola crush facilities, a wheat-based pulp plant and renewable diesel facility – creating thousands of jobs both in the construction phase and in the operation of the plants.

The 2022-23 Budget includes $338.5 million to fund business risk management programs including

Crop Insurance, AgriStability, AgriInvest and Western Livestock Price Insurance to give the industry the tools needed to move through challenges like continued dry conditions, and position producers for long-term success.

This Budget includes an additional $2.5 million for irrigation development projects in various locations throughout Saskatchewan. Developing irrigated acres attracts large investors to our province, like those in the canola crush business, among others.

The 2022-23 Budget includes $112.0 million in Energy and Resources for the final year of the three-year Accelerated Site Closure Program (ASCP) to support Saskatchewan-based oil and gas service companies and more than 2,000 jobs in the sector. The program is federally-funded and cleans up abandoned oil and gas well sites.

The temporary small business tax rate reduction continues to help Saskatchewan small businesses through the pandemic.

The rate was reduced from two per cent to zero effective October 1, 2020 and will return to one per cent July 1, 2022, providing $51.5 million in savings to Saskatchewan’s small businesses. The rate will return to two per cent on July 1, 2023 as Saskatchewan recovers from the pandemic.

This Budget puts $6.7 million more in revenue from video lottery terminals (VLTs) into the pockets of bar and restaurant owners. Effective April 4, 2022, the VLT site commission rates will increase from 15 per cent to 18 per cent.

The commission is paid to recognize site operator space, electricity, paying out prizes, emptying cashboxes and cleaning the machines. Total commissions are forecast to rise from $33.3 million to nearly $40.0 million, with this increase.

  16     Budget 2022-23  

Saskatchewan’s parks and natural beauty attract visitors from around the world. The Growth Plan sets a goal of increasing tourist expenditures in Saskatchewan by 50 per cent by 2030.

In the 2022-23 Budget, through the Ministry of Parks, Culture and Sport, $10.7 million in capital upgrades will be added, to improve visitor experiences. This includes new campground service centres at Duck Mountain and Saskatchewan Landing Provincial Parks.

Water system upgrades are in the works for Candle Lake, Saskatchewan Landing, Meadow Lake, and Echo Valley Provincial Parks, landscape and accessibility improvements at Regina Beach Recreational Site and Buffalo Pound Provincial Park. Boat launch upgrades are coming to Douglas Provincial Park and major road upgrades will be made to Battlefords Provincial Park.

The Community Rink affordability grant, providing $2,500 per ice surface, is in place for 2022-23. The $1.7 million program addresses eligible operating costs and minor capital improvements for more than 600 ice surfaces in more than 350 communities.

The 2022-23 Budget helps the viability of service clubs providing support for veterans and their families and communities in Saskatchewan. Total funding through the Saskatchewan Veteran Service Club Support Program is $1.5 million in 2022-23.

These commitments enhance the quality of life in Saskatchewan, create jobs and help strengthen our economy.

Municipal Revenue Sharing of $262.6 million, an increase of over 106 per cent since 2007-08, will help keep the province’s urban, rural and northern communities strong in 2022-23. Revenue Sharing

provides stable, predictable funding for Saskatchewan’s municipalities.

The 2022-23 Budget includes $448.5 million of direct provincial support to municipalities. Support includes revenue sharing, the province’s portion of infrastructure funding and a number of grants and initiatives from multiple Government ministries and the Crowns through grants-in-lieu and municipal surcharge collections.

The 2022-23 Budget includes $233.2 million in targeted funding for First Nations and Métis people and organizations, representing an increase of more than 20 per cent from last year.

Saskatchewan has a growing number of Indigenous-owned companies, employing thousands of people and generating millions in revenue each year. This Budget includes $475,000 to create the Saskatchewan Indigenous Investment Finance Corporation (SIIFC), in the Ministry of Trade and Export Development.

The SIIFC will offer $75.0 million in loan guarantees for private sector lending to Indigenous communities and organizations for investments into natural resource and value-added agriculture projects.

Keeping life affordable for Saskatchewan families is a key part of the Growth Plan.

The Active Families Benefit continues to help keep life affordable for families by providing $150 per child enrolled in sport, recreation and cultural activities. The benefit provides an additional $50 per child to families of children with a disability.

The continuation of the Saskatchewan Home Renovation Tax credit provides a 10.5 per cent tax credit on up to $20,000 of eligible home

  Budget 2022-23     17  

renovations done between October 1, 2020 and December 31, 2022. It started with the 2021 tax year and continues with the 2022 tax year.

The tax credit is forecast to cover $44.7 million of costs in 2022-23, making life more affordable for Saskatchewan people while helping increase activity for those working in construction and skilled trades.

Saskatchewan has among the lowest personal taxes in the country.

Since 2007, Personal Income Tax (PIT) exemptions have removed 112,000 people from the province’s income tax roll. In total, PIT reductions introduced over the past 15 years are providing over $720.0 million in annual income tax savings to Saskatchewan people.

Government reintroduced annual indexation of the provincial income tax brackets in 2021, ensuring that these tax savings are not eroded by inflation.

A Saskatchewan family of four with $100,000 in total income pays $2,084 less in combined provincial income and sales tax in 2022, compared to 2007.

A family of four pays no provincial income tax on their first $53,435 of combined income. This is more than twice as much as in 2007, when a family of four began paying provincial income tax once their combined income reached just $26,150.

Investing to Build a Better Saskatchewan

With $3.2 billion included in the 2022-23 Budget, Saskatchewan has provided $40.0 billion in capital investment through its Crowns and Executive Government since 2008-09.

Over the next four years, Saskatchewan will invest nearly $12.0 billion into capital, on track with Growth Plan goals.

The 2022-23 Budget includes $156.6 million for health care capital.

Highlights include $15.2 million for urgent care centres in Regina and Saskatoon and $13.5 million for the Prince Albert Victoria Hospital. This Budget includes $6.0 million for the Weyburn General Hospital replacement and $6.5 million to continue design and procurement activities for specialized and standard long-term care beds in Regina, $3.0 million for the Grenfell long-term care facility and $2.0 million for the La Ronge long-term care facility.

Since 2008-09, nearly $2.1 billion in investment into health care facilities has built hospitals, including the Jim Pattison Children’s Hospital, Saskatchewan Hospital North Battleford, the Dr. F.H. Wigmore Hospital in Moose Jaw and 15 new long-term care facilities across the province.

In 2022-23, the Government of Saskatchewan will invest $846.0 million into operating, maintaining, building and improving the province’s roads and highways through the Ministry of Highways.

The 2022-23 Budget invests $479.5 million into transportation capital.

The Budget provides for over 1,100 kilometres of improvements on provincial highways, as well as bridge rehabilitation and replacements, on track to meet the Growth Plan commitments to upgrade and build 10,000 kilometres of the provincial highway network by 2030.

This Budget includes $452.6 million for significant planned upgrades including Highway 3 twinning west of Prince Albert, Highway 5 corridor improvements east of Saskatoon and planning and

  18     Budget 2022-23  

pre-construction for twinning projects on Highways 6 and 39 near Regina and Weyburn. Additionally, this Budget fully funds the five-year $65.0 million Enhanced Intersection Safety Program.

This Budget also includes $27.0 million in transfers related to municipal infrastructure for the Rural Integrated Roads for Growth program, the Urban Highway Connector Program and the Community Airport Partnership Program.

With this year’s Budget, more than $11.5 billion has been invested into transportation infrastructure since 2008, improving more than 18,400 kilometres of provincial highways.

The 2022-23 Budget includes $168.6 million for school infrastructure to support ongoing capital projects which will build and renovate schools and fund relocatable classrooms.

The Budget includes $95.2 million to support the ongoing planning and construction of 15 new schools and the renovation of five existing schools, as well as $55.9 million for preventative and emergency maintenance. An additional $12.0 million has been provided for relocatable classrooms.

This Budget also provides $4.5 million for a new minor capital renewal program that will allow school divisions to address structural repairs, renovations, and additions to prolong the life of schools across the province, including renovations at Kyle Composite School and École St. Margaret School in Moose Jaw.

Since 2008-09, approximately $2.3 billion has been invested to build 57 new schools and to undertake 28 major renovation projects.

The 2022-23 Budget includes $291.8 million in government services infrastructure. It includes $74.5 million for dams, water supply channels and

irrigation projects aligned with Growth Plan goals

to increase irrigation and water management in Saskatchewan.

The Budget includes $56.4 million for courts and correction capital, with continued construction of the Saskatoon Remand Centre representing roughly half of that amount.

The 2022-23 Budget includes $268.6 million for municipal infrastructure. This includes $162.6 million under the Canada Infrastructure Program, $69.1 million through the Canada Community-Building Fund, $35.4 million through the New Building Canada Fund and $1.5 million in other small programs.

Advanced Education will invest $31.0 million in 2022-23 into ongoing capital maintenance and planning and design work for upgrades to the University of Saskatchewan Dental College and the Saskatoon campus renewal project at Saskatchewan Polytechnic.

In 2022-23, Crown corporations will invest $1.8 billion into major capital, including $1.1 billion by SaskPower to improve the province’s electricity system to meet demand and maintain reliability.

SaskEnergy is investing $272.8 million in the province’s natural gas distribution system, including expansion of the transmission system to meet increased demand in a growing province. In this Budget, SaskTel is investing $377.0 million to improve its networks dedicated to being the best at connecting people to their world.

Saskatchewan’s Crown corporations have invested more than $22.0 billion into capital since 2008 to improve power generation, transmission and distribution, telecommunications networks and natural gas transportation and distribution, and water and wastewater systems among many other projects.

  Budget 2022-23     19  

The 2022-23 Budget includes a capital plan to build a better Saskatchewan, helping to put our economy back on track and moving the province forward.

(More information is available in the 2021-22 Saskatchewan Capital Plan which begins on page 22.)

Back on Track

The 2022-23 Budget puts Saskatchewan back on track.

The province’s finances are on track, with more than $2.0 billion of improvement in this Budget and an attainable path to balance with successively smaller deficits over the medium term.

The 2022-23 Budget gets back on track with protecting lives and livelihoods as we work through the pandemic, and it includes record investments in health care, education, social services and assistance and protection of persons and property.

Saskatchewan’s economy is back on track. Key initiatives in the 2022-23 Budget will help our economy continue to grow.

Our Government will work to increase trade and exports, encourage more private investment and create jobs.

Capital investment of $3.2 billion will also help ignite our economy – and build a better Saskatchewan.

Saskatchewan’s people are strong, resilient, optimistic and confident about the future.

The 2022-23 Budget protects and strengthens our province, ensuring investments made today are sustainable into the future.

Saskatchewan is back on track.

  20     Budget 2022-23  

2022-23 Saskatchewan Capital Plan

BACK ON TRACK

Capital Plan Highlights

The 2022-23 Saskatchewan Capital Plan helps put the province back on track to achieve the Growth Plan target of investing $30.0 billion in infrastructure by 2030 to support a growing province and a better quality of life for the people of Saskatchewan. The 2022-23 Capital Plan contributes to Saskatchewan’s economic recovery with capital spending of nearly $3.2 billion in 2022-23 and a projected spending of nearly $12.0 billion over the next four years through Executive Government and Saskatchewan’s commercial Crowns sector.

To ensure that Saskatchewan is back on track, Government will continue to invest in new and existing infrastructure. This plan provides funding

for new and ongoing projects to address infrastructure needs, supports private sector investment, encourages local job creation, and encourages Saskatchewan’s continued success. Since 2008-09, including the amounts provided in this Budget, Saskatchewan has committed almost $40.0 billion towards provincial infrastructure investments. This includes the construction and rehabilitation of health and educational facilities, transportation infrastructure, and municipal infrastructure across the province.

The 2022-23 Saskatchewan Capital Plan supports the Growth Plan target of investing $30.0 billion in infrastructure spending by 2030.

Chart 1: Capital Plan

  22     Budget 2022-23  

The Capital Plan outlines projects approved to date

and provides an estimate of projected future capital

investments. The plan is detailed as follows:

Saskatchewan Capital Plan – 2022-23 to 2025-26
(millions of dollars)	2021-22 Budget		2021-22 Forecast		2022-23 Budget		2023-24 Projected		2024-25 Projected		2025-26 Projected
Executive Government Ministries and Agencies
Transportation Infrastructure
Highways Capital		520.0		440.0		452.5		340.9		340.9		340.9
Highways Partnerships and Supporting Capital		33.1		32.0		27.0		19.5		19.5		19.5
Municipal Infrastructure
Municipal Programs		244.6		296.5		268.6		312.4		243.2		162.6
Education Capital
School Capital		113.3		54.0		108.2		127.6		86.9		21.3
Maintenance Capital		76.7		66.4		60.4		60.4		60.4		60.4
Advanced Education
Maintenance, Planning and Projects		29.4		29.4		31.0		33.2		32.1		24.6
Health Care
Health Facilities		21.1		10.2		53.9		196.8		236.5		102.3
Maintenance Capital		81.2		73.2		57.3		65.1		57.1		57.1
Health IT and Equipment Capital		59.8		81.1		45.3		30.0		30.0		30.0
Government Services
Dams and Water Supply Channels		70.1		59.5		74.5		175.9		174.9		139.9
Courts and Corrections Facilities and Equipment		82.2		20.4		56.4		90.2		46.0		7.8
Parks Capital		16.5		17.7		10.7		10.8		10.7		9.9
IT Capital		44.3		45.0		77.4		33.8		4.6		3.4
Equipment Capital		28.8		28.8		29.2		28.1		28.1		25.0
Government Buildings		23.7		23.1		9.8		8.2		8.2		8.4
Targeted and Other Capital		58.7		54.2		33.8		46.5		6.7		3.9
Total Executive Government Ministries and Agencies		1,503.3		1,331.5		1,396.0		1,579.2		1,385.7		1,017.0
Crowns
SaskPower		937.6		937.6		1,053.0		905.8		710.7		1,040.1
SaskEnergy		276.8		257.8		272.8		263.7		248.9		208.3
Others*		399.0		513.9		463.0		508.9		408.9		356.0
Total Crowns		1,613.4		1,709.3		1,788.8		1,678.4		1,368.5		1,604.4
Total Capital Plan		3,116.7		3,040.8		3,184.8		3,257.6		2,754.2		2,621.4

* Others include SaskTel, SGI CANADA and Auto Fund, SaskWater, SaskGaming and CIC.

  Budget 2022-23     23  

Capital Plan Details

Transportation Infrastructure

The Capital Plan provides an investment of nearly $1.6 billion in transportation infrastructure across Saskatchewan over the next four years, including $479.5 million in the 2022-23 Budget. Over 1,100 km of the provincial roads network will be improved, 15 bridges will be repaired or rebuilt, and 100 culverts will be replaced in 2022-23.

The 2022-23 Budget allows the province to continue construction and design of passing lanes and twinning projects to increase safety and improve traffic flow. This includes twinning Highway 3 west of Prince Albert, completing 10 sets of passing lanes on Highways 12 and 16, two sets of passing lanes to complete the multi-year corridor improvements on Highway 7 from Saskatoon to the Saskatchewan-Alberta border, two sets of passing lanes and widening on Highway 5 from Saskatoon to Humboldt, and planning and pre-construction for twinning projects on Highways 6 and 39 near Regina and Weyburn.

Enhancing road safety remains a priority for the Saskatchewan Government. The 2022-23 Budget provides funding for the implementation of road safety strategies to reduce fatalities and injuries from collisions. The strategy is focused on intersections, dark driving conditions, single vehicles running off the roads and collisions with wildlife. The Budget provides $19.2 million for the fourth year of a five-year $100.0 million commitment to improving intersection and road safety.

The 2022-23 Budget continues to support municipal and regional transportation infrastructure by providing approximately $27.0 million in capital grants. The grants support economic growth and safety on rural municipal

roads and bridges through the Rural Integrated Roads for Growth and construction and maintenance partnerships with urban municipalities through the Urban Highway Connector Program. The grants also support improvements to community airports and shortline railways.

Including this year’s budget, the Government of Saskatchewan has invested approximately $11.5 billion in highways infrastructure since 2008-09 to improve more than 18,400 kilometres of Saskatchewan highways.

Since 2008-09, approximately $11.5 billion has been invested in highways infrastructure and improved over 18,400 km of the provincial roads network.

Municipal Infrastructure

The 2022-23 Budget provides $268.6 million in transfers to municipalities through various programs such as the Investing in Canada Infrastructure Program, Canada Community-Building Fund, the New Building Canada Fund, and other small programs. Including the 2022-23 Budget, the four-year capital plan will invest over $980.0 million to support municipal infrastructure projects. In addition to the capital funding, the Government of Saskatchewan will provide $262.6 million through the Municipal Revenue Sharing program as part of the Growth Plan commitment to support communities through $2.5 billion in revenue sharing by 2030.

The projects funded through the Budget will continue to advance the government’s goal of building a better life for Saskatchewan families and communities. Examples include the Prairie North Regional potable water system from the City of

  24     Budget 2022-23  

Lloydminster to Town of Lashburn, and the watermain replacement and relocation of dangerous goods route in the Town of Kerrobert funded through the New Building Canada Fund. In addition, the Budget also provides funding for the Thunderchild First Nation Wellness Centre through the Investing in Canada Infrastructure Program.

Since 2008-09, approximately $2.5 billion has been invested in municipal infrastructure projects.

Education Capital

As part of the four-year capital planned investment of $585.6 million, the 2022-23 Budget provides $168.6 million for Saskatchewan’s K-12 schools to provide safe and inclusive learning environments for students through investments in school infrastructure.

The 2022-23 Budget provides $95.2 million to support 20 ongoing capital projects to build 15 new schools and renovate five existing schools in the following communities: Regina, Saskatoon, Moose Jaw, Lloydminster, Yorkton, Lanigan, Carrot River, La Loche, North Battleford, and Wilcox.

The 2022-23 Budget also includes $55.9 million for preventative maintenance, $4.5 million for a new minor capital program that allows school divisions to address structural repairs and renovations, and $12.0 million to buy or move relocatable classrooms.

The Government of Saskatchewan continues to support K-12 classrooms and child care by providing safe and inclusive learning environments for students.

Advanced Education

The four-year capital plan provides over $120.9 million to support infrastructure improvements in the post-secondary education sector including $31.0 million in 2022-23. The funding includes $4.0 million in design funding for the Saskatoon campus renewal project at Saskatchewan Polytechnic, and an increase of $2.2 million or 10 per cent for preventative maintenance. The Budget also provides funding for planning and design work for the dental clinic at the University of Saskatchewan and an auditorium renewal project at Great Plains College. The 2022-23 Budget supports major renovation and repair work that ensures that post-secondary facilities remain safe and continue to meet the needs of current and future students.

Since 2008-09, Government has invested over $715.0 million in post-secondary infrastructure across Saskatchewan.

Health Care

Protecting the health and safety of Saskatchewan people remains a priority for Government. The 2022-23 Budget provides $156.6 million to support infrastructure improvements in the health sector.

This includes over $52.9 million to support ongoing capital projects including the redevelopment of the Prince Albert Victoria Hospital, the Weyburn General Hospital replacement, new Urgent Care Centres in Regina and Saskatoon, and various long-term care projects throughout Saskatchewan. The Budget also provides for procurement and design of the Regina General Hospital Parkade as well as planning and assessment work for the Yorkton Regional Health Centre replacement.

  Budget 2022-23     25  

The 2022-23 Budget includes $57.3 million for the rehabilitation and maintenance of health care facilities and $45.3 million for information technology projects and medical equipment. Including the current year budget, the four-year capital plan projects approximately $962.0 million in infrastructure investments in the health care sector. Government remains focused on maintaining health care facilities and improving the capacity of our health care system to address the gaps revealed by the pandemic.

Since 2008-09, government has invested nearly $2.1 billion to support the maintenance and construction of new health care facilities. Over the next four years, Government plans to invest approximately $962.0 million in health care infrastructure.

Government Services

Government services supports infrastructure maintenance across government including required upgrades of buildings, provincial dam rehabilitation, courts and correctional facilities, parks and recreational facilities, IT management systems, and support for other government programs.

Over the next four years, Government is investing approximately $1.2 billion in these areas to support program and service delivery. This includes $291.8 million provided in the 2022-23 Budget.

Government is investing $74.5 million in various dams, water supply channel projects and irrigation projects. These investments support a Saskatchewan’s Growth Plan commitment to expand the number of irrigable acres in Saskatchewan by including new spending for

smaller irrigation projects. The Budget also provides for design work for the Grant Devine Spillway modification project.

To improve visitor experience, Government is investing over $10.7 million for capital improvements throughout the parks system. This includes funding for new campground service centres at Duck Mountain and Saskatchewan Landing Provincial Parks, water system upgrades at Candle Lake, Saskatchewan Landing and Meadow Lake Provincial Parks, wastewater system upgrades at Meadow Lake and Echo Valley Provincial Parks, boat launch upgrades at Douglas Provincial Park, and major road upgrades at Battlefords Provincial Park.

Government is also investing $56.4 million for various courts and correctional facilities projects including continued development of the remand expansion at the Saskatoon Correctional Centre. Furthermore, the 2022-23 Budget provides $18.1 million in capital funding to modernize the province’s aerial wildfire suppression fleet and replace obsolete aircraft, including a Turbo Commander Bird Dog and a CL215T Air Tanker that will be delivered in 2022.

Commercial Crowns

The Crown sector invests in capital to ensure the safety and integrity of aging infrastructure to serve customers while also meeting growth demands. Saskatchewan’s Crown sector will invest approximately $1.8 billion in 2022-23 to maintain and enhance utility infrastructure while supporting economic growth. Over the next five years, Government will invest over $8.0 billion to ensure safe, reliable, and high-quality services are available for the people of Saskatchewan.

Through SaskPower, the Government is forecasting a historic capital investment of approximately

  26     Budget 2022-23  

$1.1 billion in its electricity system to improve reliability, replace aging infrastructure, and meet customer demand. This includes continued construction of the new 350 MW natural gas-fired electrical plant in Moose Jaw, upgrades at the EB Campbell hydroelectric station to extend its operating life, and increase efficiencies while creating clean, reliable power, and beginning construction on the Logistic Warehouse Complex that will centralize regional services and support around the Regina area.

The 2022-23 Budget invests $272.8 million in the province’s natural gas transmission and distribution system through SaskEnergy. These investments ensure safe, reliable, and affordable services to customers. Planned investments include Regina East and West transmission system expansions, completing connection of the SaskPower natural gas plant in Moose Jaw, and expansion and maintenance of distribution systems to support a forecasted increase in new residential customers across the province.

The 2022-23 Budget supports SaskTel’s vision to be the best at connecting people to their world by investing $337.0 million in the province’s information and communications technology infrastructure. Capital investments will include sustainment projects that support quality networks, continued deployment of fibre to rural customers, and modernization of network infrastructure through the rollout of SaskTel’s 5G wireless network.

Through SaskWater, the Government is investing $52.7 million in 2022-23 to support significant industrial growth in the Regina region as well as continued investment in the sustainment of water and wastewater systems.

Capital Plan Financing

The Capital Plan balances the need for infrastructure investments to support a growing province and stimulate economic recovery while preserving the province’s long-term fiscal health. Saskatchewan continues to make strategic investments in capital required to support future growth opportunities while ensuring that the province is back on track.

Capital expenditures will continue to be funded through a disciplined financing strategy to meet the infrastructure needs of our province and ensure that Saskatchewan’s Growth Plan goals of investing over $30 billion in infrastructure by 2030 is fiscally sustainable and matches the benefits of the assets with the terms of payments.

Planning for and enabling the repayment of capital debt upon maturity continues to be a key principle of undertaking this capital financing plan. As a result, Government remains committed to having at least two per cent of the value of these borrowings set aside and invested each year to ensure that sufficient cash will be available to repay the debt as it comes due.

Current low interest rates, combined with the Province’s excellent credit rating, continue to make this a cost-effective time to finance capital.

  Budget 2022-23     27  

The Saskatchewan Economy

Saskatchewan’s economy is back on track. After a contraction of 4.9 per cent in 2020, the province’s GDP is estimated to expand by 3.5 per cent in 2021 and 3.7 per cent in 2022 with growth forecast across the medium term.

Saskatchewan’s economy is estimated to have grown by 3.5 per cent in 2021, despite a significant drop in crop production due to wide-spread drought. Increases in the price of agricultural commodities offset most of the loss from lower production. The lifting of pandemic restrictions, strength in potash, oil and gas prices, and growth in exports, housing starts and manufacturing sales are driving the resurgence of Saskatchewan’s economy. The Saskatchewan labour market rebound due to elevated consumer spending. Sectors highly impacted by pandemic-related public health restrictions, such as the service and tourism industries, continued to lag pre-pandemic growth due to ongoing supply chain challenges and labour shortages.

In 2022, Saskatchewan’s economy is expected to surpass pre-pandemic levels of growth with forecasted real and nominal GDP growth of 3.7 per cent and 9.0 per cent, respectively. Business and consumer confidence is expected to regain momentum, as restrictions are removed and supply chain issues gradually resolve. Significant drivers of growth are strengthening commodities markets. Potash is in an excellent position to support growth as price increases and increased demand drive production. The oil and gas sector will also experience growth as positive prices incentivize production into the medium term. Significant private sector investment in mining, canola crush, forestry and oil and gas are expected to drive growth across the medium term.

Canadian, U.S. Economic Assumptions and Commodity Prices – Calendar Year

	2020 Actual		2021 Actual		2022 Forecast		2023 Forecast		2024 Forecast		2025 Forecast		2026 Forecast
Can. Real GDP Growth (%)		-5.2		4.6		3.8		2.5		2.4		2.2		1.8
U.S. Real GDP Growth (%)		-3.4		5.7		4.3		2.6		2.5		2.5		2.5
Short-term Interest Rate (%)		0.4		0.1		0.5		1.2		1.6		1.9		2.0
10-year Government of Canada Bond (%)		0.7		1.4		1.9		2.3		2.5		2.7		2.9
Canadian Dollar (US cents)		74.6		79.8		80.2		79.4		79.5		78.9		78.2
WTI Oil (US$ per barrel)		39.4		68.0		79.0		73.0		68.0		70.0		71.0
Well-head Oil (C$ per barrel)		34.9		67.0		77.7		71.7		65.3		67.9		69.5
Natural Gas (C$ per GJ)		2.3		3.7		3.9		3.4		3.2		3.3		3.3
Potash (C$ per K2O tonne)1		387.3		567.8		838.1		819.8		795.7		777.3		758.8
Potash (US$ per KCl tonne)1		176.3		277.1		409.9		396.9		385.9		374.3		361.9
Wheat (C$ per tonne)		226.9		303.4		339.4		292.8		314.9		318.9		311.9
Canola (C$ per tonne)		464.8		747.5		723.6		651.8		714.7		703.7		696.9

¹ The potash industry quotes prices in U.S. dollars per KCl tonne. Provincial royalty calculations, however, are based on the Canadian dollar price per K₂O tonne. Sources: Statistics Canada, Ministry of Energy and Resources (February 2022), Ministry of Agriculture (January 2022), IHS Markit, CBOC, Federal Government Economic and Fiscal Fall Update 2021

  30     Budget 2022-23  

Global Economic Outlook

Global economic performance in 2021 improved significantly from the economic fallout of the pandemic in 2020. The global economy gained momentum, with demand and oil prices recovering, despite the spread of COVID-19 variants and resulting supply chain disruptions. This, in part, enhanced business and consumer confidence as the global economy saw improved spending compared to 2020.

Global economy rebounded from the pandemic

The global economy was estimated to have grown by 5.9 per cent in 2021, signalling a recovery from the 3.1 per cent contraction in 2020. Developed economies are estimated to have rebounded by an average of 5.0 per cent in 2021, while the emerging market and developing economies are estimated to have grown by 6.3 per cent in the same year.

Among global economies, China was less impacted by the spread of COVID-19 variants, which

translated to a robust growth rate of 8.1 per cent, slightly lower than the 8.4 per cent initially expected. Other economies rebounded from the contraction in 2020, but fell short of expectations due to supply chain shortages, inflationary pressures, and COVID-19 variants. The Canadian economy rebounded by 4.6 per cent, the Japanese economy by 1.7 per cent and the United States (U.S.) economy by 5.7 per cent, which returned the U.S. GDP to pre-pandemic levels (Chart 1).

Global economic recovery was supported by accommodative monetary policy, vaccine roll-outs, the surge in commodity prices and government fiscal stimulus.

Global economic outlook remains optimistic

Despite ongoing challenges, the forecast for the global economy is optimistic. The global economy is expected to grow by 4.4 per cent in 2022 and 3.8 per cent in 2023. China’s economy is expected to expand further by 4.8 per cent in 2022 and 5.2 per cent in 2023. Similarly, Canada, Japan and the U.S. will grow by 3.8 per cent, 3.3 per cent, and 4.3 per cent,

Chart 1: Global GDP Growth Assumptions

Source: Statistics Canada, International Monetary Fund (February 2022)

e-estimation, f-forecast

  Budget 2022-23     31  

respectively, in 2022 and by 2.5 per cent, 1.8 per cent and 2.6 per cent, respectively, in 2023 (Chart 1). The optimistic outlook creates a stable external environment for Saskatchewan’s economic growth, as these countries are among Saskatchewan’s largest trading partners.

In 2022, the Bank of Canada (BOC) and the U.S. Federal Reserve are predicted to increase interest rates, as both nations face strong inflationary pressures and are gradually getting closer to full employment. Output and investment are expected to return to pre-pandemic levels in the developed economies, while they may remain below pre-pandemic levels in the emerging market and developing economies.

Commodity prices to return to normal over the medium-term

Commodity prices are anticipated to remain strong through 2022 as the global economy continues to open and the demand for energy commodities is expected to rise. The potash price is forecast to increase by 48 per cent in 2022, contributing to Saskatchewan’s strong economic outlook. Also, geopolitical tensions, such as those in eastern Europe, could impact oil and gas prices, as well as the supply of commodities such as potash and grains. However, commodity prices are expected to moderate from 2023 onward as the global economy returns to long term norms.

Uncertainty remains despite strong outlook

While the current forecast illustrates encouraging post-pandemic strength in the global economy, uncertainty remains. Risks to the current global outlook include the emergence of new COVID-19 variants, inflationary pressure, climate change and escalating geopolitical tension.

The expected growth for the Canadian economy over the near and medium term is also not without potential risks. The Canadian labour market continues to struggle with skill mismatches and labour shortages, which are expected to reduce potential output. Large government debt accumulation is expected to be a long-term fiscal challenge. An aging population is expected to adversely affect economic and revenue growth, impact labour supply and increase demand for health care services.

As the economy returns to pre-pandemic levels, fiscal support from the government is planned to diminish. Supply bottlenecks are also expected to linger, as their resolution will require a combination of time, investment, and technology. These challenges may impact recovery both in the near and medium term.

Saskatchewan Economic Outlook

Saskatchewan’s economy is expected to continue along its track to recovery, with substantial growth forecast for 2022.

Saskatchewan’s economy has shown strong recovery with real GDP growth of 3.5 per cent since public health restrictions eased in summer 2021. Businesses remained open during the fourth wave of the pandemic, which helped to mitigate further economic impacts. Most key economic indicators saw significant increases, with some outperforming those in other provinces.

Lifting all public health measures in early 2022 is expected to pave the way for full economic recovery, especially in the service sector. Following strong growth in 2021, Saskatchewan’s economy is expected to return to pre-pandemic levels of 2019 with forecasted 3.7 per cent GDP growth in 2022. This is expected to be supported by robust growth in capital investment, strong commodity prices, and a revived labour market.

  32     Budget 2022-23  

Saskatchewan Forecast at a Glance

(Per Cent Change Unless Otherwise Noted)

	2020 Actual			2021 Actual			2022 Forecast			2023 Forecast		2024 Forecast		2025 Forecast		2026 Forecast
Real GDP		(4.9	)		3.5	*		3.7			2.5		2.2		2.2		1.7
Nominal GDP		(6.6	)		10.1	*		9.0			3.7		1.3		1.4		2.5
CPI		0.6			2.6			2.8			2.3		2.0		2.0		1.8
Employment growth (000s)		(26.8	)		14.1			14.8			12.6		13.3		11.7		10.3
Unemployment rate (%)		8.4			6.5			5.4			4.9		4.5		4.1		3.9
Housing starts		27.2			35.2			(16.1	)		5.7		8.1		12.5		33.3
Retail sales		(1.3	)		11.8			0.5			2.7		1.9		1.6		1.4

* Estimation

Sources: Statistics Canada (February 2022) and Ministry of Finance (February 2022)

In the medium term, Saskatchewan’s economy is expected to see real GDP grow an average of 2.1 per cent annually from 2023 to 2026. However, Saskatchewan’s nominal GDP is forecast to see growth of 2.5 per cent in 2026 with major projects.

Most economic indicators rebounded

In 2021, almost all key economic indicators experienced growth compared to 2020, with many returning to or exceeding pre-pandemic levels.

Saskatchewan had the highest growth in housing starts (35.2 per cent) in 2021 compared to 2020. Compared to the pre-pandemic level (2019), the province had the highest growth in housing starts (72.0 per cent) among the provinces, well above the national average growth rate of 30 per cent.

Similarly, Saskatchewan had the highest growth in manufacturing sales (43.0 per cent) among the provinces in 2021 compared to 2020, well above the national average. Compared to the pre-pandemic level, the province had the highest growth in manufacturing sales (20.3 per cent) among the provinces.

While restaurant sales, new motor vehicle sales and employment levels experienced growth in 2021, they have yet to fully recover to pre-pandemic levels due to ongoing COVID-19 and supply chain challenges that persisted through the year.

Business investment to soar in the near term

Residential investment showed significant growth in 2021 (29.3 per cent), following a strong rebound that started later in 2020 (Chart 2).

Business investment started showing strength in the last quarter of the year, driven by growth in commercial investment.

Looking ahead, investment in the mining, agriculture, oil and gas, and forestry sectors is expected to drive significant growth. These investments are also expected to positively impact employment, especially in the construction industry, and contribute other economic benefits.

  Budget 2022-23     33  

Chart 2: Saskatchewan Real Residential and Business Investment

Source: Statistics Canada, Ministry of Finance (February 2022) e–estimation, f–forecast

Real business investment is expected to grow by 15.2 per cent in 2022 and by 8.2 per cent in 2023. Real business investment is expected to grow significantly in the near term and slow in the medium term, as the BOC is expected to gradually hike the interest rates, which may slow down investment.

Real residential investment is expected to expand by 11.6 per cent in 2022, with interest rates still expected to be lower than pre-pandemic levels. The growth rate is expected to slow to 3.9 per cent in 2023. Over the medium term, it is expected to grow by 1.4 per cent annually.

Inflation a risk to the outlook

Saskatchewan’s annual Consumer Price Index (CPI) inflation rate averaged 2.6 per cent for 2021, the lowest among provinces and well below the national average of 3.4 per cent. The rise in prices, initially driven by the supply chain disruption, has become persistent inflation over the past few months.

The surge in inflation is not only particular to Canada or Saskatchewan, but a global phenomenon.

Inflation rose rapidly around the world in the second half of 2021, and was most notable in the U.S., where the annual inflation rate averaged 4.7 per cent.

To mitigate this, it is expected the BOC will introduce a series of interest rate increases over 2022. Coupled with further opening of the global economy, the inflation rate is expected to slow down in the second half of 2022. The downward trend in the inflation rate is expected to continue in 2023, as the BOC continues to increase the interest rate and ongoing supply chain shortages resolve.

Meanwhile, higher inflation in the near term is expected to alter household consumption behaviour as the cost of living rises. This could discourage spending and stimulate household saving and investing. Similarly, increased production costs are expected to make locally produced goods less affordable, which could potentially impact Saskatchewan exports.

The Saskatchewan CPI growth rate is forecast to average 2.8 per cent in 2022, 2.3 per cent in 2023, and to return to the BOC’s inflation target rate of 2 per cent over the medium term in 2024 (Chart 3).

  34     Budget 2022-23  

Chart 3: Saskatchewan and Canada Inflation

Source: Statistics Canada, Ministry of Finance, Federal Government Economic and Fiscal Fall Update 2021 (February 2022)

f–forecast

Labour market to fully recover

The Saskatchewan labour market has been one of the major strengths of the economy and has rebounded well in the aftermath of the economic fallout from the pandemic.

The labour force expanded by 0.5 per cent in 2021 and is forecast to further grow by 1.5 per cent in 2022. The participation rate increased to 67.1 per cent in 2021 (from 66.9 per cent in 2020) and is forecast to reach 68.3 per cent in 2022. It is expected to reach 70.3 per cent by 2026.

As a result, employment grew by 2.6 per cent in 2021, largely driven by employment in the retail industry. The increase in job numbers contributed to improved consumer spending in 2021.

New investments are expected to drive employment, especially in the construction industry. Employment is expected to grow further by 2.7 per cent in 2022, as broad-based

recovery is expected in the labour market. With expected growth in 2022, the employment level is expected to reach 573,000 jobs, 0.4 per cent more

than pre-pandemic levels (Chart 4). Employment is expected to grow by 2.2 per cent in 2023. Over the medium term, it is expected to moderate to an average of 2.0 per cent annually.

Chart 4: Labour Market Recovery

Source: Statistics Canada (February 2022) Ministry of Finance (February 2022)

f–forecast

In 2021, Saskatchewan’s employment rate averaged 62.7 per cent, well above the national average of 60.2 per cent. Additionally, the provincial unemployment rate averaged 6.5 per cent, well below the national average of 7.5 per cent. With strong employment recovery, Saskatchewan had the second-highest employment rate and the fourth-lowest unemployment rate among provinces.

The unemployment rate is expected to continue to decrease as the economy gains momentum over the medium term. Saskatchewan’s unemployment rate is forecast to decline to 5.4 per cent in 2022, and to 4.9 per cent in 2023. It is expected to average 4.2 per cent annually over the medium-term.

Notwithstanding the improvement, both labour shortages and skill mismatches contributed to the number of job vacancies in the province in 2021.

  Budget 2022-23     35  

The number of job vacancies more than doubled from about 10,625 (a vacancy rate of 2.3 per cent) in January 2021 to about 21,360 (a vacancy rate of 4.3 per cent) in December 2021. The high vacancy rate has been more pronounced in some industries such as accommodations and food services (11.7 per cent), transportation and warehousing (5.7 per cent) and construction (5.3 per cent), compared to other industries (based on available data up until 2021 Q3).

Population to steadily grow

Saskatchewan’s population experienced marginal growth in 2021, largely due to pandemic-induced decline in international migration and significant inter-provincial migration out of the province.

As the global and Saskatchewan economies return to normal, increased international travel is expected, and immigration processing delays related to the pandemic are anticipated to resolve in the near term. Saskatchewan’s population is forecast to increase by 0.5 per cent in 2022 and by 0.8 per cent in 2023. Over the medium term, it is expected to steadily grow by 0.8 per cent annually.

Oil prices to moderate

The West Texas Intermediate (WTI) oil price increased from an average of US$39.4 per barrel in 2020 to an average of US$68.0 per barrel in 2021 due to increasing global demand and shortage in oil supply.

So far in 2022, oil prices have risen due to increased demand and supply shortages, due in part to the removal of public health restrictions and geopolitical factors.

Increasing demand is anticipated to send the WTI oil price to an average of US$79 per barrel in 2022. Geopolitical tensions could drive up prices as there might be supply shortages.

Impacted by strong oil prices, drilling activity increased significantly from 1,057 wells in 2020

to 1,319 wells in 2021. In Saskatchewan, drilling activity is forecast to improve as oil prices remain strong, with a further increase to 1,500 wells in 2022 and up to a total of 2,700 wells by 2026.

While WTI prices will moderate over the near and medium-term, prices are expected to remain strong and be one of the key drivers to Saskatchewan’s robust economic growth outlook and positively impact government revenue.

Chart 5: Mining Oil and Gas Contribution to SK Real GDP and WTI Prices

Source: Statistics Canada, Ministry of Finance (February 2022)

e–estimation, f–forecast

  36     Budget 2022-23  

Outlook for other non-renewable resources remains strong

In 2021, potash prices rose by 47 per cent from 2020 as a result of demand outstripping supply as global supply chain challenges persisted. Improved fundamentals affecting the U.S. crop season, such as increased planted area and high prices, contributed to strong domestic sales.

Looking ahead, global demand for 2022 is expected to increase. This, along with supply disruption in Belarus, will result in increased production in Saskatchewan.

Realized potash prices for local producers are expected to average about $838.1 per KCI tonne in 2022, a 48 per cent increase from the 2021 level. Prices are expected to peak early in the year, while affordability concerns are expected to drive down prices in the later quarters of the year. From 2023 to 2026, prices are expected to average $787.9 per KCl tonne as new capacity coming out of Belarus and Russia is expected to absorb most of the consumption growth.

However, given geopolitical tension between Russia and Ukraine, supply constraints and demand growth could put pressure on prices as Russia and Belarus are the second and third largest suppliers of potash globally.

In terms of uranium, prices are published by independent market consultants and are expected to remain relatively flat over the medium term.

The planned restart of the McArthur River and Key Lake mining operations will have a significant impact on employment, doubling the workforce from about 470 employees and contractors at the end of 2021 to about 900 employees and contractors by 2025.

The impact that geopolitical tensions between Russia and Ukraine will have on Saskatchewan’s uranium industry is so far unclear. Combined, the two countries accounted for 17 per cent of global uranium production in 2020.

Over the long term, demand will be largely dependent on government energy policies, especially with the level of new development in Asia, as well as on how reactor operators approach fuel procurement. As a result, the Asian market is expected to dictate the future demand for uranium as China has the highest number of nuclear reactors under construction, planned, and/or proposed.

Agriculture sector anticipates increased production and strong prices for 2022

In 2021, Saskatchewan’s crop production fell by 47 per cent from the prior year, due to the significant impact of wide-spread drought. Crop production totaled 21.1 million tonnes in 2021, a substantial decline from the ten-year average of 35.0 million tonnes (Chart 6). This decline in production was one of Saskatchewan’s largest in history, as farmers across the province grappled with high temperatures and poor moisture conditions.

However, from a farm income perspective, higher commodity prices and program payments partially offset the impact of the drought. The price of canola and wheat reached their highest levels in ten years, with a 61 per cent and a 34 per cent price increase, respectively. As a result, total cash receipts, net cash income, and realized net income are estimated to have increased in 2021 by 23 per cent, 45 per cent and 62 per cent, respectively.

For 2022, Saskatchewan’s total crop production is forecast to return to normal levels of about 38.0 million tonnes and maintain that level over the forecast period, assuming typical weather conditions.

  Budget 2022-23     37  

Crop prices are expected to remain relatively strong in the near and medium term. With production expected to return to normal in 2022, crop receipts are expected to drop from the record level in 2021. Crop receipts are expected to decline by 19.6 per cent in 2022, due to anticipated lower sales value of canola (down $2.6 billion), durum (down $635.5 million), wheat (down $245.2 million) and lentils (down $219.2 million) as prices in these commodities decline slightly with increased supply.

While uncertainty remains with respect to the impact of geopolitical tension in eastern Europe on Saskatchewan’s agriculture sector, producers may face an increase in fuel and fertilizer costs, as well as increased prices and demand for commodities such as wheat.

Chart 6: Saskatchewan Crop Production

Sources: Statistics Canada (February 2022), Ministry of Agriculture (January 2022)

f–forecast

Trade to hold steady

Merchandise exports to other countries grew significantly (24.7 per cent) in 2021 to a record level of $37.1 billion, despite the global supply chain challenges. The growth was largely driven by energy products (73.1 per cent), metal ores and non-metallic

minerals (21.4 per cent) and farm and intermediate food products (6.8 per cent).

Looking forward, demand for energy and food products is expected to remain stable in the near term. International exports of goods and services are forecast to grow 0.4 per cent in 2022 and to expand by 1.4 per cent in 2023. Over the medium term, exports of goods and services are expected to grow at an annual average of 1.5 per cent.

Consumer spending to stabilize

Saskatchewan households boosted the economy through increased spending as many pandemic-related restrictions lifted in summer 2021.

Consumer spending remained relatively strong for most of the fall season. Saskatchewan’s retail sales increased significantly (11.8 per cent) in 2021 to reach $21.5 billion.

Retail sales are expected to stabilize in 2022 as consumer behaviour is likely to be responsive to persistent inflation. Households may adjust their budgets in response. As a result, retail sales are forecast to increase by 0.5 per cent in 2022 and 2.7 per cent in 2023. Over the medium term, retail sales are expected to grow by an average of 1.6 per cent annually.

  38     Budget 2022-23  

Comparison with Private-Sector Forecast

The Saskatchewan Ministry of Finance regularly consults with private-sector economists and tracks their outlook to inform the government’s planning assumptions. Private-sector economists expect Saskatchewan’s economy to grow over the budget planning period. On average, private-sector forecasters estimated 3.5 per cent growth for Saskatchewan’s real GDP in 2021, which is the same as the Saskatchewan Ministry of Finance’s estimation.

Looking ahead, private-sector economists forecast that Saskatchewan’s real GDP will grow 4.1 per cent in 2022 and 2.9 per cent in 2023, above the national average for both years.

Chart 7: Real GDP Outlook for Saskatchewan Compared to Private Sector

Source: Ministry of Finance, IHS Markit, CBOC, TD Bank, RBC, BMO, CIBC, Scotiabank, National Bank, Laurentian Bank (February 2022)

e–estimation, f– forecast

The Ministry’s forecast for Saskatchewan’s real GDP growth is lower than the outlook provided by the private-sector forecasters with the exception of 2024 (Chart 7). Production from major projects is anticipated to support growth during that time.

Risk to Economic Growth

Saskatchewan’s economy is set to be back on track in 2022, with a strong economic outlook over the medium-term. Risks to Saskatchewan’s economic outlook are as follows:

• COVID-19 variants could emerge.

• If the inflation rate continues to rise, it may lead to faster interest rate hikes by the BOC, which may dampen the housing market and capital investment in the province.

• A downturn in commodity prices, particularly oil, potash and agriculture products, can limit the growth potential over the medium-term.

• Trade tensions and economic challenges with Saskatchewan’s trading partners, such as the U.S. and China, could pose a significant risk to the outlook.

• Geopolitical tension between Russia and Ukraine could have impacts on global supply chains and worsen the supply chain bottlenecks. The conflict could also raise transportation costs and electricity prices and add extreme uncertainty to the global economy.

  Budget 2022-23     39  

Private Sector Real GDP Growth Forecasts for Saskatchewan

As of February 22, 2022

(Per Cent)

	2020 Actual			2021		2022		Release Date
IHS Global Insight		(4.9	)		3.7		5.5		Jan-22
Conference Board of Canada		(4.9	)		3.6		4.6		Feb-22
TD Bank		(4.9	)		2.9		3.4		Dec-21
RBC		(4.9	)		3.1		5.6		Dec-21
BMO		(4.9	)		2.8		3.4		Jan-22
CIBC		(4.9	)		3.9		3.2		Dec-21
Scotiabank		(4.9	)		4.1		4.4		Jan-22
National Bank		(4.9	)		4.3		3.6		Jan-22
Laurentian Bank		(4.9	)		3.3		3.6		Jan-22
Average of Private Sector Forecasts		(4.9	)		3.5		4.1
2022-23 Budget Forecast		(4.9	)		3.5		3.7

  40     Budget 2022-23  

2022-23 Fiscal Outlook

Overview

The Saskatchewan Provincial Budget includes the fiscal activity for all organizations within the control of the Government of Saskatchewan, including Government Service Organizations (GSOs), Government Business Enterprises (GBEs), and government partnerships.

The inclusion of these organizations is based on standards established by the Public Sector Accounting Board (PSAB) for senior Canadian governments, and the method of consolidating these entities in the Budget is consistent with the policies described in the Saskatchewan Public Accounts.

All organizations in the Budget, with the exception of GBEs, are defined as GSOs or – in situations where Government has entered into a contractual relationship with one or more parties and share risks and benefits – a government partnership. GSOs typically provide public services and receive Government grants to sustain their operations. Examples of GSOs include Government of Saskatchewan ministries, as well as entities such as Saskatchewan Health Authority, Boards of Education, Saskatchewan Polytechnic, and Saskatchewan Cancer Agency.

The revenue and expense budgets of GSOs (and Government’s proportionate share of partnership revenue and expense) are consolidated after adjusting for differences in accounting policies and eliminating inter-organizational transactions. Adjustments are made to account for differences in entity year-ends that do not align with the Government of Saskatchewan’s year-end of March 31.

GSO revenue is classified into four major categories (taxes, non-renewable resources, federal transfers and other own-source), while GSO expense is classified into eleven expense themes. In some cases, particularly with executive government ministries, an entity’s expense can be allocated across more than one theme depending on the purpose of the activity.

GBEs are self-sufficient and have the authority to sell goods and services to external parties as their principal activity. Budgets for GBEs are incorporated as a single amount in a fifth revenue category called “Net Income from Government Business Enterprises” using the modified-equity method, which includes the Government of Saskatchewan’s proportionate share of net earnings or losses.

The 2022-23 Budget estimates a deficit of $463 million.

Financial Overview

	2019-20		2020-21		2021-22		2021-22		2022-23
(millions of dollars)	Actual		Actual		Budget		Forecast		Budget
Revenue		14,887		14,524		14,478		17,496		17,158
Expense		15,206		15,651		17,089		19,681		17,621
Deficit		(319)		(1,127)		(2,611)		(2,185)		(463	)

  Budget 2022-23     41  

2022-23 Revenue Reconciliation

										Change from
	2019-20		2020-21		2021-22		2021-22		2022-23	2021-22 Forecast
(millions of dollars)	Actual		Actual		Budget		Forecast		Budget	Dollars			Per Cent
Taxation		7,553.3		6,882.0		7,238.0		8,148.7	8,092.8		(55.9	)	(0.7)
Non-Renewable Resources		1,750.3		1,107.8		1,328.5		2,437.0	2,910.1		473.1		19.4
Net Income from GBEs		855.4		1,278.1		899.2		973.5	742.5		(231.0	)	(23.7)
Other Own-Source Revenue		2,138.4		2,123.0		2,104.1		2,530.3	2,192.5		(337.8	)	(13.4)
Transfers from the Federal Government		2,589.8		3,133.1		2,908.5		3,406.3	3,219.7		(186.6	)	(5.5)
Total Revenue		14,887.1		14,523.9		14,478.3		17,495.8	17,157.6		(338.2	)	(1.9)

Totals may not add due to rounding.

Revenue

The revenue outlook included in the 2022-23 Budget includes all tax and other revenue measures presented in the Budget, as well as changes to provincial fees and charges announced in advance of the Budget.

Total revenue is forecast to be $17.2 billion in 2022-23, a decrease of $338.2 million (1.9 per cent) from the 2021-22 forecast. The decrease is due to lower revenue across all major categories except non-renewable resources.

Relative to the 2021-22 Budget, revenue is up $2.7 billion, or 18.5 per cent, reflecting increases across all categories except net income from GBEs.

Tax Revenue

Tax revenue is budgeted at $8.1 billion in 2022-23 and accounts for 47.2 per cent of total revenue. This is a slight decrease of $55.9 million, or 0.7 per cent, from the 2021-22 forecast.

Corporation Income Tax revenue is budgeted at $840.5 million, a decrease of $151.4 million from the 2021-22 forecast. The decrease primarily reflects stronger-than-expected 2020 taxpayer assessments resulting in a large positive prior-year adjustment in 2021-22 that is not expected to repeat in 2022-23. The decrease is partially offset by a higher federal forecast of corporate taxable income for 2022 due to improving economic conditions and the partial restoration of the small business corporate income tax rate from 0 per cent to 1 per cent, effective July 1, 2022.

Tax Revenue

										Change from
	2019-20		2020-21		2021-22		2021-22		2022-23	2021-22 Forecast
(millions of dollars)	Actual		Actual		Budget		Forecast		Budget	Dollars			Per Cent
Corporation Income Tax		787.5		440.1		754.6		991.9	840.5		(151.4	)	(15.3)
Fuel Tax		507.9		441.7		477.9		497.9	507.9		10.0		2.0
Individual Income Tax		2,629.1		2,463.3		2,420.8		2,875.5	2,796.9		(78.6	)	(2.7)
Property Tax		774.0		779.0		784.8		780.7	804.1		23.4		3.0
Provincial Sales Tax		2,205.8		2,100.5		2,144.0		2,339.8	2,444.1		104.3		4.5
Tobacco Tax		206.8		204.3		201.8		186.8	198.9		12.1		6.5
Other Taxes		442.2		453.1		454.1		476.1	500.4		24.3		5.1
Total		7,553.3		6,882.0		7,238.0		8,148.7	8,092.8		(55.9	)	(0.7)

  42     Budget 2022-23  

Chart 1: Composition of 2022-23 Revenue

Individual Income Tax revenue is forecast to decrease $78.6 million from the 2021-22 forecast, primarily due to stronger-than-expected 2020 assessments resulting in a large positive prior-year adjustment in 2021-22 that is not expected to repeat in 2022-23.

Provincial Sales Tax (PST) revenue is budgeted at $2.4 billion, an increase of $104.3 million from the 2021-22 forecast. The increase is consistent with the expected continuation of the post-pandemic recovery of the Saskatchewan economy, including growth in population, household spending and business investment, combined with the implementation of PST on admissions and entertainment.

All remaining taxes are budgeted to increase by a combined $69.8 million, including: a $24.3 million

increase in other taxes, mainly reflecting economic growth and the corresponding increases to Corporation Capital Tax, insurance premiums taxes and Liquor Consumption Tax; a $23.4 million increase in Property Tax, mainly due to slight increases to mill rates combined with forecast base growth; a $12.1 million increase in Tobacco Tax revenue, due to the tax rate increase; and a $10.0 million increase in Fuel Tax revenue as a result of a strengthening economy.

Non-Renewable Resource Revenue

Non-renewable resource revenue is budgeted at $2.9 billion, or 17.0 per cent of total revenue, in 2022-23. This is a $473.1 million, or 19.4 per cent, increase from the 2021-22 forecast.

Non-Renewable Resource Revenue

											Change from
	2019-20		2020-21		2021-22		2021-22		2022-23		2021-22 Forecast
(millions of dollars)	Actual		Actual		Budget		Forecast		Budget		Dollars			Per Cent
Crown Land Sales		17.1		6.7		9.2		22.5		19.3		(3.2	)	(14.2)
Oil and Natural Gas		667.8		378.2		505.1		888.8		867.5		(21.3	)	(2.4)
Potash		554.4		421.6		431.8		1,031.9		1,451.7		419.8		40.7
Resource Surcharge		413.3		263.1		302.6		416.5		493.1		76.6		18.4
Other		97.6		38.2		79.8		77.3		78.5		1.2		1.6
Total		1,750.3		1,107.8		1,328.5		2,437.0		2,910.1		473.1		19.4

  Budget 2022-23     43  

Potash revenue is budgeted at $1.5 billion in 2022-23, up $419.8 million from the 2021-22 forecast, primarily reflecting a higher average price forecast.

In 2022-23, average realized prices are forecast at US$407 per KCl tonne (C$833 per K₂O tonne), up from US$310 2 (C$635) in 2021-22. The potash forecast also incorporates a small decrease in sales in 2022-23, from 14.0 million K₂O tonnes in 2021-22 to 13.7 million K₂O tonnes.

Revenue from the Resource Surcharge is forecast to increase $76.6 million from the 2021-22 forecast, primarily reflecting continued strength in the resource sector, mainly higher average potash prices.

Oil and natural gas royalties are budgeted at $867.5 million in 2022-23, a decrease of $21.3 million from the 2021-22 forecast. The decrease is primarily due to a wider light-heavy oil price differential, partially offset by higher West Texas Intermediate (WTI) oil prices and a slight increase in oil production.

Revenue from Crown land sales and all other non-renewable resources (including uranium, coal and other minerals) is forecast to decrease by a net $2.0 million.

WTI Oil Prices and the Canadian Dollar

WTI oil prices are forecast to average US$75.75 per barrel in 2022-23, consistent with private-sector forecasts for the upcoming year. This is a US$0.75 per barrel increase from the 2021-22 average price forecast of US$75.00 and reflects current market optimism as the world continues to recover from the pandemic and its corresponding decline in demand.

While the current WTI forecast may appear low compared to recent market prices, and WTI has been increasing throughout the 2021-22 fiscal year (from daily prices below US$60 per barrel in April, to highs of over US$95 in February), the current forecast assumes

that these price spikes are temporary and reflect brief supply and demand imbalances. It is anticipated that if WTI oil prices remain elevated for an extended period, it will bring U.S. crude production back online and OPEC will look to retain market share and make production adjustments to prevent this from happening. The current major risk to world oil markets is the continued uncertainty surrounding the ongoing impacts of COVID-19 and the geopolitical tensions in eastern Europe.

WTI oil prices are an important benchmark for the oil market and provincial revenue. However, the majority of oil produced in Saskatchewan is heavier and more sour than WTI oil and requires further processing to become refined products. As a result, Saskatchewan oil typically trades at a discount to WTI oil.

The light-heavy oil price differential – a proxy for the price discount on oil produced in Saskatchewan – is expected to widen from 13.7 per cent (as a share of WTI prices) in 2021-22 to 14.5 per cent in 2022-23; however, this is still low based on historical trends.

The value of the Canadian dollar is projected to average almost 80.0 U.S. cents in 2022-23, essentially unchanged from 2021-22. As the price of Saskatchewan oil at the well-head is generally determined based on prevailing prices in the United States, a higher exchange rate translates to lower prices in Canadian dollars, all else being equal.

The result of these factors is a 2022-23 well-head oil price forecast, in Canadian dollars, of $74.19 per barrel, down from the 2021-22 average well-head price of $74.62.

Finally, oil production is forecast at 163.7 million barrels in 2022-23, essentially flat from the 2021-22 forecast of 163.5 million barrels. At present, new well drilling is still well below historical norms as industry focuses on paying down debt incurred in the 2020 downturn and returning capital to shareholders.

  44     Budget 2022-23  

Non-renewable Resource Forecast Assumptions (Fiscal Year)

	2019-20 Actual	2020-21 Actual	2021-22 Budget	2021-22 Forecast	2022-23   Budget
WTI Oil Price (US$/barrel)	54.80	42.32	54.33	75.00	75.75
Light-Heavy Differential (% of WTI)	20.9	16.9	19.7	13.7	14.5
Well-head Oil Price (C$/barrel)1	52.54	36.54	49.31	74.62	74.19
Oil Production (million barrels)	178.9	152.5	160.0	163.5	163.7
Potash Price (mine netback, US$/KCl tonne)2	223	180	191	310	407
Potash Price (mine netback, C$/K2O tonne)2	490	390	396	635	833
Potash Sales (million K2O tonnes)2	12.7	14.1	14.3	14.0	13.7
Canadian Dollar (US cents)	75.19	75.75	79.12	79.90	79.98

¹  The average price per barrel of Saskatchewan light, medium and heavy oil.

²  Ministry of Finance calculations derived from calendar-year forecasts.

The economic and fiscal forecasts in the 2022-23 Budget rely on a set of assumptions regarding Canadian, U.S. and global economic growth, commodity prices and the value of the Canadian dollar. These factors are beyond government’s control, yet they heavily influence Saskatchewan’s fiscal performance, particularly non-renewable resource revenue. The emergence of new COVID-19 variants, the evolving situation between Russia and Ukraine, along with interest rate levels, OPEC decisions and transportation disruptions have the potential to impact resource revenue.

In an attempt to minimize risk to the fiscal plan, the assumptions used to develop the non-renewable resource forecast are prudent and incorporate a number of private sector forecasts. Due to the volatile nature of these key external factors, the non-renewable resource revenue forecast will always be subject to risk. This risk is quantified throughout the year.

For 2022-23, the following sensitivities are estimated:

• a US$1 per barrel change in the fiscal-year average WTI oil price results in an estimated $14 million change in oil royalties;

• a US$10 per KCl tonne (C$20 per K₂O tonne) change in the fiscal-year average realized potash price results in an estimated $50 million change in potash royalties; and,

• a 1 U.S. cent change in the fiscal-year average exchange rate results in an estimated $39 million change (inverse relationship in non-renewable resource revenue).

Net Income from Government Business Enterprises

Government Business Enterprise (GBE) net income is forecast at $742.5 million in 2022-23 and accounts for 4.3 per cent of budgeted revenue. This is a $231.0 million decrease from the current 2021-22 forecast.

The decrease reflects a budgeted return to more normal levels of investment income following large gains in 2021-22. In addition, higher claims expenses (related to claims returning to pre-pandemic levels and customer growth) are projected to reduce Saskatchewan Government Insurance net income.

  Budget 2022-23     45  

Net Income from Government Business Enterprises

														Change from
	2019-20			2020-21			2021-22			2021-22		2022-23		2021-22 Forecast
(millions of dollars)	Actual			Actual			Budget			Forecast		Budget		Dollars			Per Cent
Saskatchewan Auto Fund		(46.7	)		283.4			192.1			147.2		(19.0)		(166.2	)	(112.9)
Saskatchewan Gaming Corporation		20.1			(13.4	)		11.5			7.0		11.7		4.7		67.1
SGI		49.9			172.1			40.0			108.1		15.8		(92.3	)	(85.4)
SLGA		470.3			359.7			423.4			430.0		444.4		14.4		3.3
SaskPower		205.8			160.2			16.7			10.3		48.3		38.0		368.9
SaskTel		119.8			130.8			100.0			100.0		106.5		6.5		6.5
SaskEnergy		43.5			80.8			49.7			51.6		64.5		12.9		25.0
Workers’ Compensation Board		(12.3	)		97.6			(1.3	)		72.6		13.1		(59.5	)	(82.0)
Other		5.1			6.9			67.1			46.7		57.2		10.5		22.5
Total		855.4			1,278.1			899.2			973.5		742.5		(231.0	)	(23.7)

These declines are partially offset by higher net income at SaskPower and SaskEnergy, driven by higher consumption, as well as increased net income at Saskatchewan Liquor and Gaming Authority from higher gaming revenue.

GBE net income in the 2022-23 Budget also includes $57.2 million in other GBE income, primarily to recognize federal and provincial revenue to be received by SaskPower and SaskWater for capital projects, for which there is an

offsetting expense as the funding will flow through SaskBuilds Corporation and the Ministry of Government Relations.

Other Own-Source Revenue

Other own-source revenue is budgeted at $2.2 billion in 2022-23 and accounts for about 12.8 per cent of total revenue. This is a $337.8 million, or 13.4 per cent, decrease from 2021-22 and reflects an anticipated return to more normal conditions following the drought and pandemic.

Other Own-Source Revenue

											Change from
	2019-20		2020-21		2021-22		2021-22		2022-23		2021-22 Forecast
(millions of dollars)	Actual		Actual		Budget		Forecast		Budget		Dollars			Per Cent
Fees		1,200.2		1,183.9		1,170.0		1,221.5		1,225.6		4.1		0.3
Insurance		279.3		273.7		282.7		724.7		400.9		(323.8	)	(44.7)
Investment Income		118.6		151.1		88.4		88.4		89.7		1.3		1.5
Transfers from Other Governments		77.5		82.0		73.2		73.2		65.9		(7.3	)	(10.0)
Miscellaneous		462.8		432.3		489.8		422.5		410.4		(12.1	)	(2.9)
Total		2,138.4		2,123.0		2,104.1		2,530.3		2,192.5		(337.8	)	(13.4)

  46     Budget 2022-23  

Other own-source revenue includes fees for services and licenses, proceeds from the sale of goods and services, investment income, fees collected by insurance entities and other miscellaneous sources of revenue. Most government organizations generate own-source revenue to finance additional spending not funded by government grants.

The 2022-23 Budget includes decreases in insurance and miscellaneous revenue, along with transfers from other governments, partially offset by higher fees and investment income.

Insurance revenue is forecast to decline $323.8 million from the 2021-22 forecast, primarily reflecting a reduction in private reinsurance recovery purchased by Saskatchewan Crop Insurance Corporation.

Revenue from fees, investment income, transfers from other governments and other miscellaneous sources are forecast to decline $14.0 million, primarily reflecting lower forestry fees and expected land sales.

Transfers from the Federal Government

Federal transfers are budgeted at $3.2 billion in 2022-23 and account for 18.8 per cent of total revenue. This is a $186.6 million, or 5.5 per cent, decrease from 2021-22.

The Canada Health Transfer and Canada Social Transfer will increase by $58.7 million and $12.4 million, respectively, in 2022-23 in accordance with the legislated funding formula.

Other federal transfers are budgeted to decline $257.7 million compared to the 2021-22 forecast, primarily due to one-time federal contributions in 2021-22 that are not budgeted to repeat, including:

• $176.4 million for the Canada-Saskatchewan Drought Response Initiative;

• $124.1 million for Saskatchewan’s share of the Helping Our Health Systems Recover program;

• $62.6 million in one-time top-up funding received for the Canada Community-Building Fund;

• $31.0 million for Saskatchewan’s share of Canada’s COVID-19 Immunization Plan; and,

• $25.8 million in top-up funding received for the Workforce Development Agreement at Immigration and Career Training.

These decreases are partially offset by the following funding increases:

• $140.5 million to increase access to high-quality, affordable child care;

• $58.4 million for the Saskatchewan Crop Insurance Corporation, due to higher federal crop insurance premiums;

• $29.5 million reflecting higher Investing in Canada Infrastructure Program funding; and,

• $17.1 million for the Accelerated Site Closure Program, consistent with expected activity under the program.

Transfers from the Federal Government

											Change from
	2019-20		2020-21		2021-22		2021-22		2022-23		2021-22 Forecast
(millions of dollars)	Actual		Actual		Budget		Forecast		Budget		Dollars			Per Cent
Canada Health Transfer		1,262.7		1,296.5		1,330.4		1,331.3		1,390.0		58.7		4.4
Canada Social Transfer		456.2		465.2		477.4		477.7		490.1		12.4		2.6
Other		870.9		1,371.4		1,100.7		1,597.3		1,339.6		(257.7	)	(16.1)
Total		2,589.8		3,133.1		2,908.5		3,406.3		3,219.7		(186.6	)	(5.5)

  Budget 2022-23     47  

Expense

Expense in the 2022-23 Budget is classified into eleven themes, consistent with the presentation in the Saskatchewan Public Accounts. Expenses are made up of all GSOs (and proportionate share of partnerships) within the Government of Saskatchewan, including the General Revenue Fund.

Total expense is budgeted at $17.6 billion in 2022-23, an increase of $531.3 million, or 3.1 per cent, from the 2021-22 Budget.

Health, Education, and Social Services and Assistance account for approximately 70 per cent of the 2022-23 Budget, in line with the historical average.

Health is budgeted at $6.8 billion, or 38.7 per cent of total expense.

The most significant components of the health theme are the Ministry of Health, the Saskatchewan Health Authority, eHealth, the Saskatchewan Cancer Agency, 3sHealth, Health Sector Affiliates, and Health Quality Council.

Chart 2: Composition of 2022-23 Expense

2022-23 Expense Reconciliation

				Change from
	2021-22		2022-23	2021-22 Budget
(millions of dollars)	Budget		Budget	Dollars			Per Cent
Health		6,535.3	6,823.5		288.2		4.4
Education		3,753.2	3,800.4		47.2		1.3
Social Services and Assistance		1,556.7	1,623.9		67.2		4.3
Agriculture		879.3	1,040.1		160.8		18.3
Protection of Persons and Property		845.1	936.2		91.1		10.8
Financing Charges		755.0	812.0		57.0		7.5
Community Development		690.4	729.9		39.5		5.7
Transportation		607.7	610.3		2.6		0.4
General Government		524.6	544.6		20.0		3.8
Environment and Natural Resources		414.9	371.9		(43.0	)	(10.4)
Economic Development		527.0	327.7		(199.3	)	(37.8)
Total Expense		17,089.2	17,620.5		531.3		3.1

  48     Budget 2022-23  

Health expense is up $288.2 million (4.4 per cent) from the previous budget, mostly reflecting:

• $115.7 million increase for general operating costs and high-priority initiatives across the sector, including investments in enhanced cancer services, information security, rural emergency medical services, and drugs and benefits;

• $95.5 million increase for compensation across the sector, for settled collective bargaining agreements and physician costs;

• $47.0 million increase for pandemic response and recovery, including funding to reduce wait times for surgeries and diagnostic imaging, and to expand intensive care unit and high-acuity bed capacity in hospitals;

• $17.0 million increase for initiatives targeted at seniors, including for the second year of the 2020 platform commitment to add 300 continuing care aides for long-term and home care;

• $8.0 million increase for mental health and addictions initiatives; and,

• $5.0 million increase for recruitment and retention initiatives, particularly for rural Saskatchewan.

Education is budgeted at $3.8 billion, or 21.6 per cent of total expense.

The most significant components of the education theme are the Ministries of Education, Advanced Education, and Immigration and Career Training, the Boards of Education, Saskatchewan Polytechnic, Regional Colleges, the Saskatchewan Student Aid Fund, and the Saskatchewan Apprenticeship and Trade Certification Commission.

Education expense is up $47.2 million (1.3 per cent) from the previous budget.

The majority of the increase is due to a $212.2 million increase to improve access to high-quality, affordable child care, partially offset by a decrease of $149.7 million for pension expense, largely due to changes in actuarial gains and losses.

This budget also includes $29.2 million of additional funding for the Boards of Education for school operating and hiring additional educational assistants, as well as $20.1 million of increased operational costs within the post-secondary sector as students return to in-person learning.

Offsetting these increases are the following decreases:

• $20.6 million in the Provincial Training Allowance as part of the wind down of the program, which accompanies the creation of a new training benefit in the Ministry of Social Services; and,

• $54.4 million for removal of targeted preventative maintenance funding for Boards of Education, and reflecting the end of education and workforce pandemic supports.

Social Services and Assistance is budgeted at $1.6 billion, or 9.2 per cent of total expense.

The most significant components of the social services theme are the Ministries of Social Services, Government Relations, Saskatchewan Housing Corporation, and the Saskatchewan Legal Aid Commission.

Social Services and Assistance expense is up $67.2 million (4.3 per cent) from the previous budget.

  Budget 2022-23     49  

The increase is primarily due to:

• $23.5 million increase to invest in housing repair, development, and affordability under the National Housing Strategy Agreement;

• $17.9 million increase for income assistance supports for low-income individuals, families, seniors, and people with significant and enduring disabilities;

• $8.7 million increase for community-based organizations;

• $7.7 million increase to support clients with intellectual disabilities and to improve services for deaf and hard of hearing persons; and,

• $6.5 million increase to ensure the safety and well-being of vulnerable children and youth.

Agriculture is budgeted at $1.0 billion, or 5.9 per cent of total expense.

The most significant components of the agriculture theme are Saskatchewan Crop Insurance Corporation, the Ministry of Agriculture, Saskatchewan Agricultural Stabilization Fund, Prairie Agricultural Machinery Institute, and Prairie Diagnostic Services Inc.

Agriculture expense is up $160.8 million from the previous budget (18.3 per cent), primarily due to higher projected crop insurance indemnities as a result of higher crop prices, as well as higher reinsurance premiums.

Protection of Persons and Property is budgeted at $936.2 million, or 5.3 per cent of total expense.

The most significant components of the protection of persons and property theme are the Ministries of Corrections, Policing and Public Safety, Justice and Attorney General, Integrated Justice Services, and Labour Relations and Workplace Safety, the Saskatchewan Public Safety Agency, Sask911, Victim’s Fund, Financial and Consumer Affairs Authority of Saskatchewan, as well as the Advocate for Children and Youth, Information and Privacy Commissioner, and Ombudsman and Public Interest Disclosure Commissioner.

Protection of Persons and Property expense is up $91.1 million (10.8 per cent) from the previous budget, primarily reflecting the consolidation of provincial enforcement services from the environment and transportation themes under the new provincial protective services branch within the Ministry of Corrections, Policing and Public Safety. The 2022-23 Budget also includes increases for the Royal Canadian Mounted Police and other areas across the justice system including inflationary adjustments, gang violence reduction, court support services, and judges’ salaries.

Financing Charges are budgeted at $812.0 million, or 4.6 per cent of total expense. This is an increase of $57.0 million (7.5 per cent) from the previous budget, largely reflecting an increase in debt-servicing costs as a result of growth in the Saskatchewan Capital Plan and operating debt.

Community Development is budgeted at $729.9 million, or 4.1 per cent of total expense.

The most significant components of the community development theme are the Ministries of Government Relations, Parks, Culture and Sport, and Education, the Saskatchewan Lotteries Trust Fund for Sport, Culture and Recreation, Northern Municipal Trust Account, Provincial Capital

  50     Budget 2022-23  

Commission Authority, Saskatchewan Arts Board, Saskatchewan Western Development Museum, Community Initiatives Fund, and Saskatchewan Centre of the Arts.

Community Development expense is up $39.5 million (5.7 per cent) from the previous budget, primarily due to increases for the Investing in Canada Infrastructure Program and an increase in funding for First Nations, Métis and Northern Affairs, partially offset by decreased requirements for the New Building Canada Fund as this program winds down.

Transportation is budgeted at $610.3 million, or 3.5 per cent of total expense.

The most significant components of this theme are the Ministry of Highways, portions of the Ministry of Government Relations, as well as the Transportation Partnerships Fund.

Transportation expense is up $2.6 million (0.4 per cent) from the previous budget, largely due to an $18.7 million increase in amortization expense for completed highway projects, as well as increases for winter maintenance, partially offset by decreased municipal transfers, stimulus fall off, and the transfer of the Saskatchewan Highway Patrol program to the protection of persons and property theme as a part of the consolidation of the provincial protective services.

General Government is budgeted at $544.6 million, or 3.1 per cent of total expense. This is an increase of $20.0 million (3.8 per cent) from the previous budget, primarily reflecting an increase for the Enterprise Business Modernization Project.

Environment and Natural Resources is budgeted at $371.9 million, or 2.1 per cent of total expense.

The theme is comprised of portions of the Ministries of Environment, and Parks, Culture and Sport, as well as the Water Security Agency, the Commercial Revolving Fund, and portions of the Saskatchewan Research Council.

Environment and Natural Resources expense is down $43.0 million (10.4 per cent) from the previous budget, primarily reflecting a decrease of $24.5 million for the transfer of compliance and field services to the protection of persons and property theme as a part of the consolidation of the provincial protective services, and a $24.4 million decrease for the Accelerated Site Closure Program.

Economic Development is budgeted at $327.7 million, or 1.9 per cent of total expense.

The most significant components of the economic development theme are the Ministries of Energy and Resources, Trade and Export Development, Saskbuilds and Procurement, Immigration and Career Training, Environment, and Finance, portions of the Saskatchewan Research Council, SaskBuilds Corporation, Innovation Saskatchewan, Tourism Saskatchewan, Saskatchewan Opportunities Corporation, Creative Saskatchewan, Global Transportation Hub Authority, and Saskatchewan Health Research Foundation.

Economic Development expense is down $199.3 million (37.8 per cent) from the previous budget, reflecting:

• $174.8 million decrease for the completion of the Saskatchewan Economic Recovery Rebate;

• $30.9 million due to an overall reduction of capital funding for SaskPower; and,

• $9.5 million decrease to the Vaccine for Infectious Disease Organization for the Centre for Pandemic Research;

  Budget 2022-23     51  

partially offset by,

• $8.0 million increase for Creative Saskatchewan film and television grants; and,

• $6.1 million increase for Tourism Saskatchewan to support expanded marketing and industry development.

Net Debt

Another measure of a province’s fiscal position is net debt. Net debt aggregates a province’s liabilities and subtracts the financial assets that it has at its disposal to repay its obligations. Net debt measures the province’s future requirement to generate revenue to fund past services and transactions.

Net-debt-to-GDP compares the province’s net debt to its economic output as an indicator of the province’s ability to generate future revenues to pay for past services and transactions.

Saskatchewan’s net debt position is prudent and sustainable. The table below shows that the Province of Saskatchewan’s net debt at March 31, 2022 is forecasted to be only 19.0 per cent of GDP, which is one of the best among provinces.

Chart 3: Projected net debt as a % of GDP

As at March 31

Sources: Net Debt: Jurisdictions most recent data (as of March 4, 2022).

GDP: SK: Saskatchewan Ministry of Finance; All others: Statistics Canada, IHS Markit.

Medium-Term Outlook

Saskatchewan’s plan to return to balance no later than 2026-27 remains unchanged. Despite deficits being forecast across the planning horizon, there has been a vast improvement to the fiscal outlook compared to Budget 2021-22. Saskatchewan’s outlook continues to be driven by sustainability anchors such as low net-debt-to-GDP compared to other provinces and returning to balanced annual budgets.

This prudent outlook allows the government to continue making key investments to support a vibrant economy and emerging priorities, while maintaining the fiscal capacity to provide sustainable, high-quality services to citizens, ensuring Saskatchewan remains the best place in Canada to work, live and raise a family.

Faster-than-expected economic recovery, coupled with increased commodity prices have led to significant improvements for all revenue streams across the medium-term. This improvement in revenues allows for an expense target that provides government the flexibility to address key priority areas of spending through to 2025-26 while taking into account factors such as inflationary and interest rate pressures, an aging population, and longer-term impacts from the pandemic on public services.

The medium-term fiscal outlook is consistent with the provincial economic forecast and its underlying assumptions. The outlook assumes that there will be no new public health measures as the province changes its approach from managing COVID-19 as a pandemic to endemic, and that there are no negative structural changes to the economy that alter the projected growth.

The province’s financial position is projected to improve over the medium-term, with forecast deficits of $463 million in 2022-23, $384 million in 2023-24, $321 million in 2024-25, and $165 million in 2025-26.

  52     Budget 2022-23  

After a decline in revenue of 1.9 per cent in 2022-23, total revenue is forecast to grow by 2.6 per cent per year, on average, over the medium-term.

Growth in base, or on-going, expense over the medium-term is targeted at 2.0 per cent per year.

Medium-Term Financial Outlook

	2019-20			2020-21			2021-22			2022-23	2023-24			2024-25			2025-26
(millions of dollars)	Actual			Actual			Forecast			Budget	Outlook			Outlook			Outlook
Revenue		14,887			14,524			17,496		17,158		17,589			18,011			18,534
Expense		15,207			15,651			19,681		17,621		17,973			18,332			18,699
Deficit		(319	)		(1,127	)		(2,185	)	(463)		(384	)		(321	)		(165	)

Medium-Term Revenue

Average annual revenue growth of 2.6 per cent is driven by Saskatchewan’s strengthening economy as nominal GDP growth for the same period is anticipated to average 2.1 per cent annually. Revenue as a per cent of GDP is expected to remain relatively stable throughout the medium-term.

Tax revenue is forecast to grow by 3.6 per cent per year, on average, over the forecast period. In addition, the wind-down of the Home Renovation Tax Credit and the small business income tax rate reduction in 2023 contribute to the robust growth outlook over the period.

Non-renewable resource revenue growth is forecast to decline by 2.0 per cent per year, on average, over the forecast period. Despite this slight decline, non-renewable revenue is still forecast to sustain highs not seen in the past decade.

WTI oil prices are forecast to be relatively flat over the forecast period and average US$70.25 in 2025-26. An increase in the light-heavy oil price differential over the same time period has a negative effect on well-head oil prices in Saskatchewan. As a result, well-head prices, in Canadian dollars, are expected to decline over the forecast horizon. Finally, oil production in 2025-26 is forecast at 179.2 million barrels, only slightly above 2019-20 levels, as industry focuses on paying down debt incurred in the 2020 downturn and returning capital to shareholders.

Key Medium-Term Non-Renewable Resource Forecast Assumptions

	2019-20		2020-21		2021-22		2021-22		2022-23		2023-24		2024-25		2025-26
	Actual		Actual		Budget		Forecast		Budget		Outlook		Outlook		Outlook
WTI Oil Price (US$/barrel)		54.80		42.32		54.33		75.00		75.75		71.25		68.50		70.25
Light-Heavy Differential (% of WTI)		20.9		16.9		19.7		13.7		14.5		14.7		15.5		15.5
Well-head Oil Price (C$/barrel)1		52.54		36.54		49.31		74.62		74.19		70.06		65.93		68.28
Oil Production (million barrels)	178.9		152.5		160.0		163.5		163.7		165.6		172.4		179.2
Potash Price (mine netback, US$/KCl tonne)2		223		180		191		310		407		394		383		371
Potash Price (mine netback, C$/K2 O tonne)2		490		390		396		635		833		814		791		773
Potash Sales (million K2 O tonnes)2		12.7		14.1		14.3		14.0		13.7		14.1		14.1		14.1
Canadian Dollar (US cents)		75.19		75.75		79.12		79.90		79.98		79.41		79.37		78.75

¹  The average price per barrel of Saskatchewan light, medium and heavy oil.

²  Ministry of Finance calculations derived from calendar-year forecasts.

  Budget 2022-23     53  

Chart 4: Non-Renewable Resource Revenues – 1990-91 to 2025-26

Source: Saskatchewan Ministry of Finance

Potash prices are forecast to decline over the forecast horizon, while sales remain flat, however both are expected to remain high compared to historical trends.

The Canadian dollar is expected to be relatively stable over the next four years.

In total, non-renewable resource revenue is projected to account for less than 15 per cent of total revenue by 2025-26, which is below the current 17 per cent share estimated for 2022-23.

Chart 5: Composition of Revenue – 1990-91 to 2025-26

Source: Saskatchewan Ministry of Finance

  54     Budget 2022-23  

GBE net income and other own-source revenue are projected to increase at a combined annual average rate of 6.7 per cent.

Finally, federal transfers are projected to remain relatively flat over the four-year horizon. The 2022-23 Budget includes $175.6 million of federal funding recognition for the Accelerated Site Closure Program, which is expected to wind down in 2022-23. This decline is offset by increases in the Canada Health Transfer and the Canada Social Transfer in the outlook, while all other federal cost-sharing programs are projected to remain relatively flat.

Medium-Term Net Debt

During the pandemic, the province’s net-debt-to-GDP ratio increased from 14.1 per cent to 19.0 per cent, due to a decline in revenue coupled with increased expense for COVID-19 health, safety and stimulus efforts. As the province emerges from the pandemic and the economy continues to gain momentum, Saskatchewan’s net-debt-to-GDP ratio is forecast to remain relatively stable before beginning to decline as the province returns to a surplus position.

Under the current set of planning assumptions, Saskatchewan’s net-debt-to-GDP ratio is estimated to decrease to 18.8 per cent in 2022-23, from an estimated 19.0 per cent in 2021-22, and peak at 20.4 per cent in 2025-26 after which point Saskatchewan’s net-debt-to-GDP ratio is expected to decline.

This outlook is a significant improvement from the prior year forecasts which anticipated a ratio of 26.0 per cent in 2025, 6.1 per cent higher than the current year projections.

Despite the slight increase in the net debt over the medium-term, Saskatchewan’s net-debt-to-GDP ratio is expected to remain one of the lowest in Canada.

Chart 6: Net debt as a % of GDP

As at March 14

Source: Ministry of Finance

e–estimation, f–forecast

  Budget 2022-23     55  

2022-23 Borrowing and Debt

The Province’s debt consists of:

• General Debt – all debt of government entities other than Government Business Enterprise (GBE) Specific Debt; and,

• GBE Specific Debt – amounts borrowed by, or specifically on behalf of self-sufficient government organizations.

GBEs have the financial and operating authority to sell goods and services to individuals and organizations outside government as their principal activity. Amounts borrowed by, or specifically for these entities are classified separately because they are expected to be repaid from cash flows generated by these business enterprises. In other words, this debt has been incurred to finance the business activities of Crown corporations, and it is supported by revenue from those Crown business activities.

Public debt as reported in this Budget paper is comprised of:

• Gross Debt – the amount of money owed to lenders; less

• Sinking Funds – the amount of money that has been set aside for the repayment of debt.

Public debt at March 31, 2022 is forecast to be $0.6 billion lower than estimated primarily due to the reduction in operating debt required to fund the 2021-22 deficit and decreases in Saskatchewan Capital Plan and GBE debt.

For 2022-23, public debt is expected to increase by $2.9 billion from the March 31, 2022 forecast. This is due to a $1.3 billion increase in debt for infrastructure assets under the Saskatchewan Capital Plan, $0.9 billion increase in operating debt to fund the deficit and increase liquidity and $0.7 billion of increased debt for GBEs.

Chart 1: Public Debt

As at March 31

  56     Budget 2022-23  

Debt

As at March 31

	General			GBE Specific
(millions of dollars)	Debt 2023			Debt 2023			Budget 2023			Forecast 2022			Budget 2022
Government Service Organizations
Gross Debt		20,917.8			–			20,917.8			18,705.7			19,230.2
Sinking Funds		(1,457.1	)		–			(1,457.1	)		(1,371.5	)		(1,374.8	)
Government Service Organization Debt		19,460.7			–			19,460.7			17,334.2			17,855.4
Government Business Enterprises
Gross Debt		275.0			11,416.2			11,691.2			10,922.0			10,983.2
Sinking Funds		(40.2	)		(1,067.2	)		(1,107.4	)		(1,068.8	)		(1,072.3	)
Government Business Enterprise Debt		234.8			10,349.0			10,583.8			9,853.2			9,910.9
Public Debt		19,695.5			10,349.0			30,044.5			27,187.4			27,766.3
Guaranteed Debt		35.1			–			35.1			0.2			0.1

Borrowing

Virtually all borrowing is done by the General Revenue Fund (GRF). Where the GRF borrows on behalf of a government entity, the entity is responsible for the principal and interest payments on this debt.

The GRF’s 2022-23 borrowing requirements are estimated to be $3,521.7 million. Of this amount, $664.6 million is for the purpose of refinancing maturing debt, $500.0 million is to improve operational flexibility through liquidity, and the remaining amount is to finance infrastructure assets and fund the deficit.

Borrowing Requirements

(millions of dollars)	Budget 2022-23		Forecast 2021-22
General Revenue Fund – Operating		1,070.0		1,925.0
Saskatchewan Capital Plan and Other Government Service Organizations		1,400.0		1,500.0
Government Service Organizations		2,470.0		3,425.0
Government Business Enterprises		1,051.7		827.7
Borrowing Requirements		3,521.7		4,252.7

  Budget 2022-23     57  

Sinking Funds

	Forecast	Contributions	Earnings	Redemptions	Budget
(millions of dollars)	2022	2023	2023	2023	2023
Government Service Organizations	1,371.5	231.2	29.0	(174.6)		1,457.1
Government Business Enterprises	1,068.8	98.7	21.8	(81.9)		1,107.4
Total Sinking Funds	2,440.3	329.9	50.8	(256.5)		2,564.5

Sinking Funds

Sinking funds are monies set aside for the orderly retirement of a portion of the government’s debt. Sinking funds at March 31, 2022 are forecast to be $2,440.3 million, which is $6.8 million lower than estimated. The variance is primarily due to lower than expected investment earnings during 2021-22.

For 2022-23, sinking funds are expected to increase by $124.2 million to $2,564.5 million.

Debt Charges

In addition to interest payments, debt charges include other costs related to general gross debt such as the amortization of premiums, discounts and commissions. Debt charges also include interest that is accrued on pension liabilities.

The 2022-23 debt charges assume interest rates of 0.5 per cent for short-term borrowing and 2.75 per cent for long-term borrowing. A pension valuation rate of 2.9 per cent has been assumed for pension liabilities. A one percentage point increase in interest rates from levels assumed in the Budget would increase debt charges in 2022-23 by approximately $32.2 million.

Debt Charges – General Debt

	Budget	Forecast
(millions of dollars)	2022-23	2021-22
General Revenue Fund	622.2	527.0
GRF Interest Paid to Other Government Entities	(16.4)	(12.0)
	605.8	515.0
Pension Liabilities	173.2	176.1
Other General Debt	33.0	33.7
Debt Charges – General Debt1	812.0	724.8

¹  Debt charges do not include amounts pertaining to Government Business Enterprise Specific Debt. These amounts are reflected in Net Income from Government Business Enterprises.

  58     Budget 2022-23  

Credit Ratings

Saskatchewan receives credit ratings from three major credit rating agencies: Moody’s Investors Service (Moody’s), S&P Global (S&P) and DBRS Morningstar (DBRS).

A credit rating is an important indication of a government’s fiscal health as it represents an assessment of a province’s ability to repay its debt. Overall, Saskatchewan’s credit rating ranks second strongest among Canadian provinces.

Credit Ratings of Canadian Provinces

As at March 14, 2022

JURISDICTION	MOODY’S	S&P	DBRS
British Columbia	Aaa	AA+	AA(high)
Saskatchewan	Aa11	AA2	AA(low)3
Quebec	Aa2	AA-	AA(low)
Nova Scotia	Aa2	AA-	A(high)
Manitoba	Aa2	A+	A(high)
New Brunswick	Aa2	A+	A(high)
Prince Edward Island	Aa2	A	A
Ontario	Aa3	A+	AA(low)
Alberta	Aa3	A	AA(low)
Newfoundland & Labrador	A1*	A*	A(low)

¹  Last rating change on March 21, 2021

²  Last rating change on June 21, 2017

³  Last rating change on June 18, 2020

* negative outlook

  Budget 2022-23     59  

2022-23 Revenue Initiatives

The 2022-23 Budget introduces a number of revenue initiatives to help get Saskatchewan back on track by continuing to drive sustained growth in the economy, while also ensuring fair and consistent application of taxes for Saskatchewan businesses and households.

This paper provides an overview of the tax and revenue measures announced in the Budget. It is strictly a summary, and for further details readers are encouraged to contact the responsible ministry or authority and/or consult the enacting legislation or regulation.

Back on Track to a Growing Economy

Saskatchewan’s tax system includes incentives that cover a broad range of economic sectors, including manufacturing, agriculture, non-renewable resources, and innovation and technology. These initiatives support competitiveness and encourage new investment in the provincial economy. As part of a commitment to a strong economic recovery and a strong Saskatchewan, many existing incentives will continue, and the 2022-23 Budget announces additional incentives that drive investment.

For further information on initiatives that improve Saskatchewan’s competitive business environment and encourage investment in the province, please visit www.saskatchewan.ca/business/investment- and-economic-development/business-incentives-and-tax-credits.

Enhancement of the Saskatchewan Value-added Agriculture Incentive (SVAI)

Saskatchewan is home to one of the world’s top value-added agriculture investment environments. The SVAI is part of that investment environment, as a tax rebate in respect of capital expenditures valued at $10.0 million or more for newly constructed or

expanded value-added agriculture facilities in Saskatchewan.

Qualifying projects may include canola crush facilities, pea protein processors, oat milling operations, malt producing operations, and cannabis oil facilities.

With the intent of making the SVAI even more attractive, the Government is increasing the 15 per cent tax credit rate for higher levels of investment, as follows:

• 15 per cent on the portion of a project up to $400.0 million;

• 30 per cent on the portion of a project between $400.0 million-$600.0 million; and,

• 40 per cent on the portion of a project in excess of $600.0 million in value.

This change will be effective retroactive to the origin of the program in 2018. The dollar value of the tax credit will be capped at $250.0 million, meaning no single project can be eligible for more than that amount of SVAI corporate tax relief.

For further information on the SVAI program, please contact the Ministry of Trade and Export Development at 306-798-1277.

Enhancement of the Saskatchewan Technology Start-up Incentive (STSI)

The STSI is designed to encourage business investment in early-stage technology start-ups. The program provides a non-refundable 45 per cent income tax credit for individual, corporate or venture capital corporations investing in Eligible Start-up Businesses (ESBs) that are developing new technologies, or applying existing technologies in a new way, to create proprietary new products, services or processes that are repeatable and scalable.

  60     Budget 2022-23  

Last year’s budget announced the following changes to the STSI:

• extended the STSI for an additional five years through 2025-26;

• doubled the amount that an ESB can raise under the program from $1.0 million to $2.0 million;

• increased the carry-forward period to claim unused tax credits from four years to seven years; and,

• established a cap of $2.5 million per year on the maximum value of tax credits that may be issued.

To further encourage investment and the growth of private capital in Saskatchewan, the STSI is again being enhanced by increasing the tax credit cap from $2.5 million to $3.5 million, effective April 1, 2022.

For further information on the STSI program, please contact Innovation Saskatchewan at 306-933-7222.

Temporary Reduction of the Small Business Tax Rate

In the fall of 2020, to support Saskatchewan small businesses through the pandemic and to help them recover, the Government temporarily reduced the small business corporate income tax rate to zero, effective October 1, 2020.

The small business corporate income tax rate will return to 1 per cent on July 1, 2022, and to 2 per cent on July 1, 2023. The amount which small businesses can earn at the small business tax rate will remain at $600,000, the highest threshold in Canada.

Lower taxes for Saskatchewan small businesses will continue to help bolster employment and keep Saskatchewan on the path to economic recovery.

Saskatchewan Home Renovation Tax Credit

In the fall of 2020, the Government introduced the Saskatchewan Home Renovation Tax Credit to help stimulate residential construction activity and improve housing affordability.

Saskatchewan homeowners may save up to $1,155 in provincial income tax for 2021 by claiming a tax credit on eligible home renovation expenses incurred between October 1, 2020 and December 31, 2021. A further $945 in savings may be claimed for 2022 in respect of eligible expenses incurred between January 1, 2022 and December 31, 2022.

Further information on this continuing initiative can be found at www.saskatchewan.ca/residents/taxes-and-investments/tax-credits.

Fair and Consistent Taxation

The 2022-23 Budget introduces several measures to improve the fair and consistent application of Saskatchewan’s taxes, including modest adjustments to Tobacco Tax rates, the Provincial Sales Tax (PST) base, and Education Property Tax (EPT) mill rates.

Taxation of Tobacco Products

To help maintain tax rate equity among western provinces on cigarette sticks and loose tobacco, Saskatchewan’s Tobacco Tax rates increase from 27 cents to 29 cents on cigarette sticks, from 27 cents to 35 cents per gram of loose tobacco (chew and roll-your-own tobacco), and from 20.5 cents to 21.8 cents on Heat-Not-Burn sticks, effective March 24, 2022.

While Saskatchewan has typically maintained an equivalent Tobacco Tax rate for cigarettes and loose tobacco, many other provinces have had higher

  Budget 2022-23     61  

rates on loose tobacco to account for its generally unhealthier nature. Overall, the higher tax rates will help shift consumption away from these products towards healthier alternatives.

For further information on the taxation of tobacco products, please refer to the Ministry of Finance website at www.sets.saskatchewan.ca/taxinfo or contact the Ministry at sasktaxinfo@gov.sk.ca.

Vapour Products Tax (VPT) Exemption in Lloydminster

The 2022-23 Budget announces that The Lloydminster Provincial Sales Tax Exemption Regulations are amended to add the recently introduced Saskatchewan VPT to the list of tax-exempt purchases within the City of Lloydminster, effective March 24, 2022.

Due to its unique geographic location, there are specific rules in place to facilitate tax exemptions for specified types of retail sales on the Saskatchewan side of Lloydminster.

For further information on the VPT, please refer to the Ministry of Finance website at www.sets.saskatchewan.ca/taxinfo or contact the Ministry at sasktaxinfo@gov.sk.ca.

PST on Admissions and Entertainment

Effective October 1, 2022, the PST base will be expanded to include admission and entertainment charges. For simplicity and ease of administration, these changes will follow the federal Goods and Services Tax base.

Examples of the types of charges that are currently exempt but will become taxable include, but are not limited to:

• admissions to sporting events, concerts and shows, movie theatres, museums, zoos and historical sites;

• admissions to fairs, rodeos, trade shows, arts and crafts shows;

• admissions to conferences and seminars;

• professional theatre tickets and subscriptions;

• gym, golf and curling fees and memberships; and,

• hunting and fishing guide fees and outfitter services.

There will be, however, exemptions for certain situations, including:

• admissions to school, university or minor league sports and amateur theatre productions where the events are put on by a public sector body and do not feature paid participants;

• fees for recreational programs such as hockey, dance or music where the activities are provided by school or non-profit organizations for those 14 years of age and under; and,

• fund-raising events where part of the cost of admission can reasonably be considered a donation to a charity.

For further information on the taxation of admissions and entertainment, please refer to the Ministry of Finance website at www.sets.saskatchewan.ca/taxinfo or contact the Ministry at sasktaxinfo@gov.sk.ca.

PST Exemption for Audiobooks

An eBook is an electronic version of a printed book that can be read on a computer or other electronic device, while an audiobook is a voice recording of

  62     Budget 2022-23  

the text of a book that is listened to rather than read. eBooks are currently exempt from the PST (similar to traditional books) while audiobooks are taxable, resulting in an inconsistency of tax application.

Audiobooks allow people to multi-task while “reading” a book, and they are also used extensively for educational purposes and by those in the visually impaired community.

Effective April 1, 2022, the Government will exempt sales of audiobooks from the PST to provide an equivalent treatment with eBooks.

For further information on the taxation of audiobooks, please refer to the Ministry of Finance website at www.sets.saskatchewan.ca/taxinfo or contact the Ministry at sasktaxinfo@gov.sk.ca.

Video Lottery Terminal (VLT) Site Commission Rate

VLT site operators currently receive 15 per cent of net sales as a commission, with the remaining 85 per cent going to the Province. The commission is paid in recognition of site operators providing space and electricity for VLTs, paying out prizes, emptying cashboxes, and cleaning the machines.

As part of the 2022-23 Budget, the Government is increasing the VLT site commission rate from 15 per cent to 18 per cent, effective April 4, 2022.

For further information on this change, please contact Saskatchewan Liquor and Gaming Authority at 306-787-5309.

EPT Mill Rates

The 2022-23 Budget is introducing changes to EPT mill rates. These changes will slightly increase 2022 mill rates for each property class in Saskatchewan, including a decrease to the

differential between the highest and lowest EPT mill rates, to improve overall tax fairness.

These EPT mill rate changes are expected to result in a revenue increase of about 1.8 per cent. When combined with normal assessment base growth, the total revenue increase is estimated to be 2.6 per cent.

The 2022 EPT mill rates for the various property classes will be: Agriculture 1.42; Residential 4.54; Commercial/Industrial 6.86; and Resource 9.88.

For further information on Saskatchewan’s EPT mill rates, please visit www.saskatchewan.ca/residents/ taxes-and-investments/property-taxes/education-property-tax-system.

Takeover of Federal Carbon Tax Backstop Fuel Charge

As part of the Government’s approach to increasing Saskatchewan’s autonomy within the Canadian federation, a proposal is being developed to take over administration of, and all revenues from, the federal carbon tax backstop fuel charge.

The Government believes that it is better to have full control of this tax and its associated revenues, rather than accept that the federal government will continue to make the decisions on how best to return the revenues within Saskatchewan.

If successful in the proposed approach, the Government will announce a plan in the fall of 2022 for how the fuel charge revenues are to be distributed back to households and businesses in Saskatchewan, according to our own unique priorities and needs.

  Budget 2022-23     63  

Saskatchewan’s Tax Expenditures

Introduction

Although the primary purpose of taxation is to raise revenue, governments also attain some of their social and economic goals by reducing the taxes paid by certain taxpayers. These reductions are commonly called “tax expenditures” and include such measures as exemptions, deductions, tax credits, preferential tax rates or deferrals. Taken together, they provide assistance to a variety of individuals and businesses, including families, farmers, senior citizens and small businesses.

While tax expenditures are usually absorbed in the overall revenue estimates and are not presented in the same way as direct spending programs, they reduce the amount of revenue generated by a government and they affect the fiscal position in the same way as direct expenditures. This paper provides estimates of the revenue impacts of several of Saskatchewan’s tax expenditures.

Rationale for Tax Expenditures

Tax expenditures can achieve a number of objectives, such as enhancing the fairness of the tax system or promoting certain types of economic activity. In pursuing these objectives, some tax expenditures have become fundamental elements of the tax system.

Saskatchewan’s Provincial Sales Tax (PST) does not apply to certain essential items such as basic groceries, residential natural gas and electricity, and reading materials, thereby reducing the taxes paid by families consuming these items.

Other exemptions from the PST are intended to support particular key sectors of the provincial economy, including manufacturing and farming.

To provide tax relief to key economic sectors and ensure tax competitiveness with other jurisdictions, Saskatchewan provides reduced Fuel Tax rates to farmers and primary producers. Saskatchewan also exempts heating fuels from the Fuel Tax to ensure consistent tax treatment with the PST exemption for natural gas used for heating.

Saskatchewan’s personal income tax system applies provincial marginal tax rates directly to taxable income as defined for federal income tax purposes. As a result, deductions that contribute to the federal determination of taxable income can be considered to be fundamental aspects of the provincial income tax system that reduce income tax revenue.

In addition, Saskatchewan’s personal income tax system has distinct provincial non-refundable income tax credits that recognize the personal circumstances of the taxpayer, including family-based credits and disability-related credits.

Saskatchewan’s income tax system also delivers several programs designed to encourage specific taxpayer behaviours, including investment and retention incentives.

To improve tax competitiveness, Saskatchewan levies a lower income tax rate on small businesses and a special income tax rate on manufacturing and processing (M&P) profits. In addition, Saskatchewan provides a refundable Investment Tax Credit (ITC) to assist M&P companies that invest in qualifying new or used M&P assets for use in the province. Saskatchewan also provides a Research and Development (R&D) Tax Credit in support of qualifying R&D activities.

The rationale for each tax expenditure is provided in the notes that follow the tables.

  64     Budget 2022-23  

Associated Costs

While tax expenditures serve important social and economic objectives, the introduction of any tax expenditure results in associated costs. These costs take several forms.

• First, there is the cost of forgone revenue. Tax expenditures result in the reduction of revenue collected and have a significant impact on a government’s financial position.

• Second, tax expenditures add to the complexity of the tax system, leading to increased administrative effort and compliance costs for businesses, consumers and governments.

• Third, tax expenditures create distortions in consumer and other economic behaviour by providing preferential treatment for certain categories of consumer expenditure.

Government of Canada Tax Expenditures

The federal government produces a detailed presentation on tax expenditures that are part of the federal tax system. Since Saskatchewan’s personal and corporate income taxes are based upon the federal definition of taxable income, many of the federal tax expenditures have an impact on Saskatchewan’s revenue. Readers interested in examining the federal government’s presentation of tax expenditures are invited to visit the Finance Canada website at www.canada.ca/en/department-finance/services/ publications/federal-tax-expenditures.

2022 Saskatchewan Tax Expenditure Accounts

The following tables provide estimates of the major tax expenditures of the Government of Saskatchewan. This year’s tables also provide updates to the 2019, 2020 and 2021 tax expenditure estimates that were reported last year.

Tax expenditure estimates for PST and Fuel Tax are derived from historical tax collection data and Statistics Canada data on personal and business consumption patterns, along with assumptions regarding expected changes in population, retail sales and investment intentions.

Tax expenditure estimates for personal and corporate income taxes are derived from the Ministry’s internal tax models, which use actual income tax assessment data for the 2019 taxation year, along with assumptions regarding trend analysis and expected changes in population, employment, income and investment intentions for subsequent taxation years.

The 2022-23 Saskatchewan tax expenditures also incorporate 2022 indexation amounts and models have been updated to reflect changes to Canada Pension Plan (CPP) and Employment Insurance (EI).

  Budget 2022-23     65  

2022 Government of Saskatchewan Tax Expenditure Accounts

(Value of Tax Expenditures in Millions of Dollars)

Provincial Sales Tax	2019 Actual		2020 Revised		2021 Revised		2022 Estimate		Notes
Exemptions
1.   Basic Groceries		180.1		194.3		205.9		218.2		1
2.   Prescription Drugs		49.3		50.2		55.2		60.2		1
3.   Reading Materials		11.0		11.8		12.5		13.1		1
4.   Personal Services		46.7		47.6		48.0		49.7		1
5.   Feminine Hygiene Products		2.2		2.3		2.4		2.4		1
6.   Used Goods and Vehicles – Exempt Amounts		11.3		13.9		12.8		13.6		1
7.   Electricity		72.0		70.6		68.3		69.4		1
8.   Natural Gas		36.6		35.0		35.5		29.5		1
9.   Farm Machinery and Repair Parts		100.7		100.8		106.5		107.4		2
10.   Fertilizer, Pesticide and Seed		237.9		238.0		278.5		312.9		2
11.   Direct Agents		28.4		27.2		28.3		29.4		2
12.   Agriculture, Life and Health Insurance		145.4		140.8		147.3		154.5		1
Other
1. Saskatchewan Low-Income Tax Credit		134.8		135.1		130.8		140.0		3
2. Rebate for New Residential Construction		–		2.0		5.2		5.4		1,2
Fuel Tax	2019 Actual		2020 Revised		2021 Revised		2022 Estimate		Notes
1.   Exemption for Farm Activity		83.7		93.7		77.9		80.4		2
2.   Exemption for Heating Fuels		37.9		35.3		54.4		57.5		1
3.   Exemption for Primary Producers		1.3		1.4		1.2		1.2		2
Personal Income Tax	2019 Actual		2020 Revised		2021 Revised		2022 Estimate		Notes
Deductions from Income
1.   Registered Pension Plan Contributions		102.5		106.7		112.7		116.5		4
2.   Registered Retirement Savings Plan Contributions		150.0		151.4		152.3		154.7		4
3.   Annual Union, Professional or Like Dues		17.0		17.7		18.7		19.4		4
4.   Child Care Expenses		14.6		15.2		16.1		16.6		4
5.   Moving Expenses		1.5		1.6		1.7		1.7		4
6.   Carrying Charges		22.9		23.9		25.2		26.0		4
7.   Allowable Employment Expenses		13.6		14.1		14.9		15.4		4
8.   Capital Gains Deduction		98.4		102.4		108.2		111.8		4

  66     Budget 2022-23  

Personal Income Tax	2019 Actual		2020 Revised		2021 Revised		2022 Estimate		Notes
Saskatchewan Non-Refundable Tax Credits
1.   Basic Personal Tax Credit		1,057.2		1,066.7		1,089.3		1,135.5		4
2.   Spousal Tax Credit		53.9		54.4		55.6		57.9		4
3.   Equivalent-to-Spouse Tax Credit		23.5		23.7		24.2		25.3		4
4.   Age Tax Credit		34.5		34.8		35.5		37.0		4
5.   Su pplement to the Age Tax Credit		14.7		14.8		15.1		15.8		5
6.   Dependent Child Tax Credit		107.6		108.6		110.9		115.6		5
7.   CPP Contributions Tax Credit		96.9		100.5		106.4		114.6		4
8.   EI Premiums Tax Credit		28.0		27.8		29.7		31.8		4
9.   Pension Income Tax Credit		13.2		13.3		13.4		13.7		4
10.   Student Loan Interest Tax Credit		1.1		1.1		1.2		1.3		4
11.   Disability Tax Credit		23.7		24.2		25.0		26.3		4
12.   Caregiver Tax Credit		3.3		3.3		3.4		3.6		4
13.   Medical Expenses Tax Credit		30.2		31.6		33.5		34.7		4
14.   Charitable Contributions Tax Credit		51.1		53.4		54.0		54.9		4
15.   First-time Homebuyers Tax Credit		4.6		4.6		4.7		4.7		4
16.   Volunteer Tax Credits		–		2.5		2.5		2.6		4
Other Saskatchewan Tax Measures
1.   Labour-Sponsored Venture Capital Tax Credit		10.5		9.6		12.0		12.0		4
2.   Mineral Exploration Tax Credit		0.2		0.1		0.5		0.5		4
3.   Political Contributions Tax Credit		1.4		2.1		1.2		1.3		4
4.   Graduate Retention Program Tax Credit		64.7		66.6		64.9		65.0		6
5.   Saskatchewan Technology Start-up Incentive		0.1		1.7		1.6		2.3		8
Corporation Income Tax	2019 Actual		2020 Revised		2021 Revised		2022 Estimate		Notes
1.   Lower Tax Rate for Small Business		387.1		369.3		475.1		463.8		2,7
2.   M&P Profits Tax Reduction		8.7		23.5		25.0		25.0		2,7
3.   ITC for M&P		28.2		28.8		45.0		60.0		2
4.   R&D Tax Credit		10.4		11.4		15.0		15.0		2,4

  Budget 2022-23     67  

Tax Expenditures – Notes

1. These measures provide tax relief for individuals and families (and in some cases, businesses) who purchase these particular essential items, thereby reducing the overall cost and contributing to affordability.

2. These measures provide tax relief to key sectors of the provincial economy and help ensure tax competitiveness with similar businesses in other jurisdictions.

3. This measure mitigates the impact of the PST for Saskatchewan residents with low and modest incomes.

4. Most of Saskatchewan’s tax expenditures related to personal and corporate income taxes are provided because they form part of the federal definition of taxable income; others parallel similar federal tax expenditures. Descriptions of these measures and their objectives can be found in the federal government’s report on tax expenditures, as previously noted.

5. Saskatchewan’s dependent child tax credit and supplement to the age tax credit provide tax relief to families with children and to seniors. The dependent child tax credit recognizes the non-discretionary expenses of families with children. The supplement to the age tax credit provides broad tax relief to all seniors, recognizing that the age tax credit is income-tested.

6. The Graduate Retention Program encourages students who have graduated from a post-secondary institution to live and work in Saskatchewan by providing an income tax credit of up to $20,000.

7. While there is only one statutory tax rate for corporations, these preferential tax rates for small businesses and M&P businesses create a de facto progressive tax rate structure for some corporations. These measures are designed to encourage or attract investment, support business activity in key economic sectors, and allow these businesses to retain more of their earnings to reinvest and create jobs.

8. The Saskatchewan Technology Start-up Incentive encourages investment in eligible early stage technology start-up businesses to help diversify the provincial economy and establish a robust technology ecosystem in Saskatchewan.

  68     Budget 2022-23  

2022 Intercity Comparison of Taxes and Utilities

Introduction

A number of factors contribute to the quality of life enjoyed by individuals and families in Saskatchewan and across Canada. For example, access to excellent health care, education and social services is a key part of the overall quality of life.

Other important factors that affect quality of life are the level of taxation and the cost of utilities and auto insurance. Calculating the combined cost of provincial taxes and utilities is a reliable way to compare the attractiveness of living in different parts of Canada.

For purposes of such a comparison, the total cost of these taxes and utilities for representative families living in Regina has been compared with the costs those families would face in other major cities across the country.

The provincial taxes and utilities costs associated with the following family characteristics and income levels have been calculated to provide a representative comparison:

• a single person, living in rental accommodation, with an annual income of $40,000;

• a family of two adults and two dependent children, owning its own home, with an annual family income of $75,000;

• a family of two adults and two dependent children, owning its own home, with an annual family income of $100,000; and,

• a family of two adults and two dependent children, owning its own home, with an annual family income of $125,000.

Saskatchewan’s Ranking for 2022

In 2022, Saskatchewan individuals and families will pay total provincial taxes that are very competitive with those paid in other Canadian cities, with a ranking among the lowest in Canada for all four representative family situations.

• A single person earning $40,000 will pay $3,023 in total provincial taxes.

• A two-income family earning $75,000 will pay $4,421 in total provincial taxes.

• A two-income family earning $100,000 will pay $7,415 in total provincial taxes.

• A two-income family earning $125,000 will pay $10,569 in total provincial taxes.

For the representative family situations, Regina also ranks among the lowest overall for combined taxes and utilities of the 10 cities surveyed.

  Budget 2022-23     69  

2022 Intercity Comparison of Taxes and Utilities

Single Person at $40,000 Total Income

(Values in Dollars)

	Vancouver			Calgary		Regina			Winnipeg		Toronto			Montreal			Saint John			Halifax		Charlotte- town			St. John’s
Provincial Taxes
Provincial Income Tax		1,315			1,792		2,171			3,040		1,320			2,617			2,475			3,173		2,872			2,441
Tax Credits and Rebates		(97	)		0		(171	)		0		(329	)		(779	)		(200	)		0		(160	)		(450)
Health Premiums		0			0		0			0		450			710			0			0		0			0
Sales Tax		746			0		873			893		1,192			1,487			1,490			1,490		1,490			1,490
Gasoline Tax		370			130		150			140		147			222			109			155		151			211
Total Provincial Taxes		2,334			1,922		3,023			4,073		2,780			4,257			3,874			4,818		4,353			3,692
Household Utility Costs
Electricity		506			966		795			518		705			431			687			864		910			759
Cellular		960			960		780			780		960			780			960			960		960			960
Auto Insurance		2,154			3,302		1,232			1,354		5,503			2,470			2,694			2,898		2,093			2,547
Total Household
Utility Costs		3,620			5,228		2,807			2,652		7,168			3,681			4,341			4,722		3,963			4,266
Total Taxes and Utilities		5,954			7,150		5,830			6,725		9,948			7,938			8,215			9,540		8,316			7,958
2022 Intercity Comparison of Taxes and Utilities Family at $75,000 Total Income (Values in Dollars)
	Vancouver			Calgary		Regina			Winnipeg		Toronto			Montreal			Saint John			Halifax		Charlotte- town			St. John’s
Provincial Taxes
Provincial Income Tax		2,012			2,820		2,216			4,865		1,452			4,288			4,265			5,342		4,876			4,457
Tax Credits and Rebates		(1,380	)		0		0			0		(1,290	)		(4,412	)		(60	)		0		0			0
Health Premiums		0			0		0			0		750			1,420			0			0		0			0
Sales Tax		1,755			0		1,905			2,003		2,808			3,502			3,511			3,511		3,511			3,511
Gasoline Tax		739			260		300			280		294			444			217			310		302			423
Total Provincial Taxes		3,126			3,080		4,421			7,148		4,014			5,242			7,933			9,163		8,689			8,391
Household Utility Costs
Home Heating		1,214			1,120		859			875		968			1,503			2,266			2,247		2,663			2,547
Electricity		836			1,450		1,347			834		997			647			1,053			1,426		1,383			1,193
Cellular		960			960		780			780		960			780			960			960		960			960
Auto Insurance		2,154			3,302		1,232			1,354		5,503			2,470			2,694			2,898		2,093			2,547
Total Household
Utility Costs		5,164			6,832		4,218			3,843		8,428			5,400			6,973			7,531		7,099			7,247
Total Taxes and Utilities		8,290			9,912		8,639			10,991		12,442			10,642			14,906			16,694		15,788			15,638

  70     Budget 2022-23  

2022 Intercity Comparison of Taxes and Utilities

Family at $100,000 Total Income

(Values in Dollars)

	Vancouver			Calgary		Regina		Winnipeg		Toronto			Montreal			Saint John		Halifax		Charlotte- town		St. John’s
Provincial Taxes
Provincial Income Tax		3,863			5,138		4,914		7,856		3,991			8,062			7,257		8,774		7,948		7,344
Tax Credits and Rebates		(735	)		0		0		0		(870	)		(3,412	)		0		0		0		0
Health Premiums		0			0		0		0		960			1,420			0		0		0		0
Sales Tax		2,025			0		2,201		2,326		3,274			4,082			4,092		4,092		4,092		4,092
Gasoline Tax		739			260		300		280		294			444			217		310		302		423
Total Provincial Taxes		5,892			5,398		7,415		10,462		7,649			10,596			11,566		13,176		12,342		11,859
Household Utility Costs
Home Heating		1,214			1,120		859		875		968			1,503			2,266		2,247		2,663		2,547
Electricity		836			1,450		1,347		834		997			647			1,053		1,426		1,383		1,193
Cellular		960			960		780		780		960			780			960		960		960		960
Auto Insurance		2,154			3,302		1,232		1,354		5,503			2,470			2,694		2,898		2,093		2,547
Total Household
Utility Costs		5,164			6,832		4,218		3,843		8,428			5,400			6,973		7,531		7,099		7,247
Total Taxes and Utilities		11,056			12,230		11,633		14,305		16,077			15,996			18,539		20,707		19,441		19,106
2022 Intercity Comparison of Taxes and Utilities Family at $125,000 Total Income (Values in Dollars)
	Vancouver			Calgary		Regina		Winnipeg		Toronto			Montreal			Saint John		Halifax		Charlotte- town		St. John’s
Provincial Taxes
Provincial Income Tax		5,577			7,537		7,738		11,108		5,849			11,959			10,439		12,681		11,619		10,757
Tax Credits and Rebates		0			0		0		0		(450	)		(2,412	)		0		0		0		0
Health Premiums		0			0		0		0		1,200			1,420			0		0		0		0
Sales Tax		2,329			0		2,531		2,675		3,765			4,694			4,706		4,706		4,706		4,706
Gasoline Tax		739			260		300		280		294			444			217		310		302		423
Total Provincial Taxes		8,645			7,797		10,569		14,063		10,658			16,105			15,362		17,697		16,627		15,886
Household Utility Costs
Home Heating		1,214			1,120		859		875		968			1,503			2,266		2,247		2,663		2,547
Electricity		836			1,450		1,347		834		997			647			1,053		1,426		1,383		1,193
Cellular		960			960		780		780		960			780			960		960		960		960
Auto Insurance		2,154			3,302		1,232		1,354		5,503			2,470			2,694		2,898		2,093		2,547
Total Household
Utility Costs		5,164			6,832		4,218		3,843		8,428			5,400			6,973		7,531		7,099		7,247
Total Taxes and Utilities		13,809			14,629		14,787		17,906		19,086			21,505			22,335		25,228		23,726		23,133

  Budget 2022-23     71  

Taxes and Utilities – Notes

Tax estimates are calculated for the 2022 calendar year using known changes as of March 4, 2022. Household charges for the basic utility services (electricity, home heating, cellular plans and auto insurance) represent a cost comparison of actual utility rates for the 2021 calendar year. This methodology has been chosen for the sake of certainty in citing utility costs. The utility figures exclude federal Goods and Services Tax, provincial sales taxes, and municipal taxes and surcharges.

Provincial Income Tax is calculated based on the income level for each representative family situation. It is assumed that family income is earned by both spouses at a 60 per cent to 40 per cent ratio and that the families each claim $3,000 in child care expenses for two dependent children (ages 6 and 12). Personal non-refundable credits used include the Canada Pension Plan/Québec Pension Plan and Employment Insurance contribution credits. Gross Québec personal income tax has been reduced by the Québec Child Care Expense Tax Credit and by the 16.5 per cent abatement from federal income tax.

Tax Credits and Rebates refer to refundable provincial income tax credits and rebates designed to reduce the impact of sales taxes.

Health Premiums are annual premiums for hospital insurance and medical services.

Sales Tax is based upon average family expenditure baskets at the total income levels from the Statistics Canada 2019 Survey of Household Spending. The sales tax base in each province is identified from the enacting legislation, with total expenditures adjusted to reflect Saskatchewan consumption patterns. The sales tax in each province is then estimated based on taxable expenditures.

Gasoline Tax is based on annual consumption of 1,000 litres by a single person, and 2,000 litres for families. Figures include charges levied by transit commissions as well as provincial carbon taxes applied to the purchase of gasoline.

Home Heating charges are based on an annual consumption level of 2,800 m³ of natural gas. For Charlottetown and St. John’s, the figures represent the BTU equivalent consumption of fuel oil.

Electricity charges are based on an annual consumption level of 4,584 kWh for renters and 8,100 kWh for homeowners.

Cellular Plan charges are the rates for a 15 – 20 GB wireless plan. Device purchases are not included.

Auto Insurance is based on a composite index developed by Saskatchewan Government Insurance (SGI) modelled after the index developed by the Consumers’ Association of Canada. The index is based on the actual insurance rates quoted for what drivers would pay in each jurisdiction if they had the same car, coverage (collision and comprehensive deductibles of $500 and a third-party liability limit of $2 million), claims history and driving record at a consistent point in time. The Consumers’ Association of Canada developed 34 profiles to create this index. The impacts of “Good Driver” discounts/rebates have been factored in for all applicable jurisdictions. SGI does not have access to directly compare auto insurance rate information for Montreal, Saint John, Halifax, Charlottetown and St. John’s. Therefore, SGI has used a secondary aggregator to calculate average auto insurance rates for these jurisdictions.

  72     Budget 2022-23  

2021-22 Budget Update Third Quarter

Overview

At third quarter, a deficit of $2.2 billion is forecast, a total improvement of $426.1 million from budget, and an improvement of $523.3 million since mid-year.

Revenue is forecast to increase $3.0 billion from budget and expense is forecast to increase $2.6 billion from budget.

2021-22 Budget Update – Third Quarter

(millions of dollars)	Budget			Mid-Year Projection			Third Quarter Forecast			Third Quarter Change from
										Budget			Mid-Year
Revenue
Taxation		7,238.0			7,854.7			8,148.7			910.7			294.0
Non-renewable resources		1,328.5			1,997.3			2,437.0			1,108.5			439.7
Net Income from GBEs		899.2			1,114.6			973.5			74.3			(141.1)
Other own-source revenue		2,104.1			2,451.2			2,530.3			426.2			79.1
Transfers from the Federal Government		2,908.5			3,451.1			3,406.3			497.8			(44.8)
Total Revenue		14,478.3			16,868.9			17,495.8			3,017.5			626.9
Expense
Agriculture		879.3			3,022.8			3,188.8			2,309.5			166.0
Community development		690.4			742.3			731.9			41.5			(10.4)
Economic development		527.0			541.2			529.0			2.0			(12.2)
Education		3,753.2			3,789.9			3,715.2			(38.0	)		(74.7)
Environment and natural resources		414.9			378.2			373.9			(41.0	)		(4.3)
Financing charges		755.0			755.0			724.8			(30.2	)		(30.2)
General government		524.6			500.6			496.5			(28.1	)		(4.1)
Health		6,535.3			6,785.3			6,820.0			284.7			34.7
Protection of persons and property		845.1			946.0			984.3			139.2			38.3
Social services and assistance		1,556.7			1,508.0			1,489.4			(67.3	)		(18.6)
Transportation		607.7			607.7			626.8			19.1			19.1
Total Expense		17,089.2			19,577.0			19,680.6			2,591.4			103.6
Deficit		(2,610.9	)		(2,708.1	)		(2,184.8	)		426.1			523.3

  Budget 2022-23     73  

Revenue Update

Revenue is now forecast to be $17.5 billion in 2021-22, an increase of $3.0 billion (20.8 per cent) from budget, and $626.9 million (3.7 per cent) higher than expected at mid-year.

The increase from budget is due to forecast increases across all major revenue categories, including significant increases in non-renewable resources and taxation.

Significant changes from budget are described below.

Taxation

Taxation revenue is forecast to increase $910.7 million from budget.

Personal income tax is up $454.7 million from budget, primarily due to stronger-than-expected 2020 assessments resulting in a large positive prior-year adjustment in 2021-22, combined with a higher household income forecast.

Corporate income tax is up $237.3 million from budget, primarily related to stronger-than-expected 2020 assessments resulting in a large positive prior- year

adjustment in 2021-22, and stronger-than-expected corporate profits in 2021.

Provincial Sales Tax is forecast to increase $195.8 million from budget, primarily reflecting better-than-expected economic performance, particularly in the construction, retail and services sectors.

Fuel Tax revenue is forecast to increase $20.0 million from budget, primarily as a result of higher-than-budgeted gasoline and diesel fuel consumption.

Finally, a $22.0 million increase in revenue from other taxes, mainly Corporation Capital Tax and Cannabis Excise Tax, is partly offset by a $15.0 million decrease in Tobacco Tax due to lower-than-budgeted consumption and a $4.1 million decrease in Property Tax revenue collections.

Non-Renewable Resources

Non-renewable resources revenue is forecast to increase $1.1 billion from budget.

At third quarter, potash royalties are expected to be $600.1 million higher than budget, primarily due to higher average realized prices in U.S. dollars (US$310 per KCl tonne, up US$119 from budget).

2021-22 Non-Renewable Resources Forecast Assumptions

	Budget		Mid-Year Projection		Third Quarter Forecast		Third Quarter Change from
							Budget			Mid-Year
WTI Oil Price (US$/barrel)		54.33		69.29		75.00		20.67			5.71
Light-Heavy Differential (% of WTI)		19.7		12.7		13.7		(6.0	)		1.0
Well-head Oil Price (C$/barrel)1		49.31		68.85		74.62		25.31			5.77
Oil Production (million barrels)		160.0		162.7		163.5		3.5			0.8
Potash Price (mine netback, US$/KCl tonne)2		191		272		310		119			38
Potash Price (mine netback, C$/K2O tonne)2		396		558		635		239			77
Potash Sales (million K2O tonnes)2		14.3		14.2		14.0		(0.3	)		(0.2)
Canadian Dollar (US cents)		79.12		80.13		79.90		0.78			(0.23)

¹ The average price per barrel of Saskatchewan light, medium and heavy oil.

² Ministry of Finance calculations derived from calendar-year forecasts.

  74     Budget 2022-23  

Oil and natural gas revenue is forecast to be $383.7 million higher than budget. The increase is primarily due to higher West Texas Intermediate (WTI) oil prices, a narrower light-heavy oil price differential and a forecast increase in oil production, partially offset by a higher exchange rate.

WTI oil prices have steadily recovered this fiscal year, increasing from a monthly average of US$61.70 in April to a daily high of over US$95 in February. As a result, WTI oil prices are now forecast to average US$75.00 per barrel in 2021-22, compared to the budget assumption of US$54.33 per barrel.

The light-heavy differential (as a per cent of WTI) is expected to average 13.7 per cent in 2021-22, a decrease of 6.0 percentage points from the budget assumption of 19.7 per cent, reflecting increased demand from U.S. refineries. A narrower light-heavy oil differential results in higher well-head prices in Saskatchewan and higher oil revenue, all else equal.

The value of the Canadian dollar has been relatively flat over the course of the fiscal year, from a monthly average of 80.0 U.S. cents in April to 78.6 U.S. cents in February. The exchange rate is now expected to average 79.9 U.S. cents in 2021-22, up 0.8 U.S. cents from the budget assumption of 79.1 U.S. cents. This increase offsets some of the gains from higher non-renewable resource prices, as a higher Canadian dollar results in lower prices in Canadian dollars and lower non-renewable resource revenue.

Overall, the result of these forecast changes is a well-head oil price forecast in Canadian dollars of $74.62 per barrel, up $25.31 from the budget forecast of $49.31.

In addition, oil production is forecast to increase from 160.0 million barrels at budget to 163.5 million barrels at third quarter.

Resource Surcharge revenue is forecast to increase $113.9 million from budget, mainly due to higher-than-budgeted sales values in the potash and oil sectors, reflecting increasing average prices.

Crown land sales are $13.3 million higher than budgeted, reflecting higher-than-expected actual sales in 2021-22.

Finally, other non-renewable resources revenue, including uranium, coal and other minerals, is forecast to decrease $2.5 million from budget, mainly due to lower coal revenue.

Key Assumptions

WTI

On a fiscal year basis, WTI is now forecast to average US$75.00 per barrel in 2021-22, up from US$54.33 at budget. WTI averaged US$71.27 through the third quarter of the fiscal year. A US$1 per barrel change in the fiscal-year average WTI oil price results in an estimated $15 million change in 2021-22 oil royalties (all else being equal).

Oil Differential

The light-heavy oil differential forecast at third quarter is 13.7 per cent, down from 19.7 per cent at budget, reflecting higher-than-expected Western Canadian heavy crude oil demand from U.S. refiners. A lower differential results in higher oil revenue for Saskatchewan (all else being equal).

Oil Production

Oil production is forecast to be 163.5 million barrels at third quarter, up from 160.0 million barrels at budget.

  Budget 2022-23     75  

Exchange Rate

The exchange rate is now forecast to average 79.9 U.S. cents in 2021-22, up from 79.1 U.S. cents at budget. Through the third quarter of the fiscal year, the Canadian dollar averaged 80.1 U.S. cents.

A 1 U.S. cent change in the fiscal-year average exchange rate results in an estimated $39 million change in 2021-22 non-renewable resource revenue (all else being equal).

A lower exchange rate results in higher revenue and a higher exchange rate results in lower revenue, as resource exports are priced in U.S. dollars.

Government Business Enterprises (GBE)

Net income from GBEs is forecast to increase $74.3 million from budget, primarily reflecting the following changes:

• $68.1 million increase in Saskatchewan Government Insurance net income, primarily due to strong investment earnings, as well as lower claims expense; and,

• $73.9 million increase in Workers’ Compensation Board net income, primarily due to higher investment income, partially offset by lower premium revenue;

partially offset by,

• $44.9 million decrease in Saskatchewan Auto Fund net income, primarily due to higher claims expenses as a result of assumptions related to future inflation and discount rates; and,

• $22.8 million net decrease across the GBE sector, primarily the result of a lower estimate for federal Investing in Canada Infrastructure Program funding.

Other Own-Source Revenue

Other own-source revenue is up $426.2 million from budget, largely due to:

• $442.0 million increase in insurance revenue, mainly due to recoveries from private reinsurance purchased by the Saskatchewan Crop Insurance Corporation along with higher crop insurance producer premiums as a result of an increase in insured acres and higher prices; and,

• $51.5 million increase in fees revenue, primarily reflecting higher forestry fee revenue;

partially offset by,

• $67.3 million decrease in miscellaneous revenue, primarily reflecting the impact of the pandemic on various sources of revenue in 2021-22.

Federal Transfers

Transfers from the federal government are forecast to increase $497.8 million from budget, largely due to:

• $176.4 million for the Canada-Saskatchewan Drought Response Initiative;

• $124.1 million for Saskatchewan’s share of the Helping Our Health Systems Recover program;

• $66.9 million for early learning and child care funding to increase access to high-quality, affordable child care;

• $62.6 million in one-time top-up funding for the Canada Community-Building Fund;

  76     Budget 2022-23  

• $45.8 million due to federal crop insurance premiums as a result of higher insured acres and higher prices; and,

• $31.0 million for Saskatchewan’s share of Canada’s COVID-19 Immunization Plan;

partially offset by,

• $41.5 million decrease for the Accelerated Site Closure Program, reflecting lower expected activity under the program.

Expense Update

At third quarter, expense is forecast to be $19.7 billion in 2021-22, an increase of $2.6 billion from budget and $103.6 million higher than mid-year. Major changes in expense themes from budget are described below.

Agriculture is up $2.3 billion, primarily due to higher crop insurance indemnities and AgriRecovery program costs stemming from the widespread drought.

Health is up $284.7 million from budget, primarily due to pressures across the system related to the response to COVID-19.

Protection of Persons and Property is up $139.2 million, mainly due to a high wildfire season as well as pandemic response activities such as the Safe Voluntary Isolation Sites Program, the establishment of a provincial COVID-19 emergency operations centre, and pandemic-related operational requirements within the courts, custody, supervision, and rehabilitation services.

Community Development is up $41.5 million, mainly due to continued investment in Saskatchewan communities through the top-up of the Canada Community-Building Fund, partially offset by delays in northern municipal landfill and sewer projects.

Transportation is up $19.1 million, largely due to higher-than-budgeted winter maintenance costs.

Economic Development is up $2.0 million, largely due to additional emergency COVID-19 support programs, partially offset by a change in the timing of payments scheduled for the new Centre for Pandemic Research.

Social Services and Assistance is down $67.3 million, primarily due to lower-than-budgeted caseloads in income assistance and housing programs.

Environment and Natural Resources is down $41.0 million, mainly due to lower activity in the Accelerated Site Closure Program as a result of lower than budgeted program uptake.

Education is down $38.0 million from budget, mainly due to operational savings across the K-12 sector and post-secondary program underutilization during the pandemic; partially offset by funding to increase access to high-quality, affordable child care.

Financing Charges expense is down $30.2 million, primarily due to lower borrowing requirements and favourable interest rates compared to budget.

General Government expense is down $28.1 million, primarily due to decreased pension expense as a result of changes in actuarial assumptions.

  Budget 2022-23     77  

Government of Saskatchewan

Budget

For the Year Ended March 31

(millions of dollars)
	Budget 2022-23			Forecast 2021-22			Budget 2021-22
Revenue
Taxation		8,092.8			8,148.7			7,238.0
Non-renewable resources		2,910.1			2,437.0			1,328.5
Net income from government business enterprises		742.5			973.5			899.2
Other own-source revenue		2,192.5			2,530.3			2,104.1
Transfers from the federal government		3,219.7			3,406.3			2,908.5
Total Revenue		17,157.6			17,495.8			14,478.3
Expense
Agriculture		1,040.1			3,188.8			879.3
Community development		729.9			731.9			690.4
Economic development		327.7			529.0			527.0
Education		3,800.4			3,715.2			3,753.2
Environment and natural resources		371.9			373.9			414.9
Financing charges		812.0			724.8			755.0
General government		544.6			496.5			524.6
Health		6,823.5			6,820.0			6,535.3
Protection of persons and property		936.2			984.3			845.1
Social services and assistance		1,623.9			1,489.4			1,556.7
Transportation		610.3			626.8			607.7
Total Expense		17,620.5			19,680.6			17,089.2
Deficit		(462.9	)		(2,184.8	)		(2,610.9	)

Totals may not add due to rounding.

  80     Budget 2022-23  

Government of Saskatchewan

Statement of Accumulated Deficit

For the Year Ended March 31

(millions of dollars)
	Budget 2022-23			Forecast 2021-22			Budget 2021-22
Accumulated deficit, beginning of year		(3,640.2	)		(1,367.6	)1		(2,094.6	)
Adjustment to accumulated deficit, beginning of year2		(157.6	)		(87.8	)		–
Deficit		(462.9	)		(2,184.8	)		(2,610.9	)
Accumulated Deficit, End of Year		(4,260.7	)		(3,640.2	)		(4,705.5	)

Totals may not add due to rounding.

¹  Accumulated deficit as at March 31, 2021, as reported in the 2020-21 Summary Financial Statements.

²  Adjustment to accumulated deficit, beginning of year is the result of changes in accounting standards.

Government of Saskatchewan

Statement of Change in Net Debt

For the Year Ended March 31

(millions of dollars)
	Budget 2022-23			Forecast 2021-22			Budget 2021-22
Deficit		(462.9	)		(2,184.8	)		(2,610.9	)
Acquisition of government service organization capital assets		(1,231.8	)		(977.3	)		(1,089.9	)
Amortization of government service organization capital assets1		592.6			652.8			628.1
Increase in Net Debt		(1,102.1	)		(2,509.3	)		(3,072.7	)
Net debt, beginning of year		(16,279.8	)		(13,682.7	)2		(14,512.3	)
Adjustment to net debt, beginning of year3		(157.6	)		(87.8	)		–
Net Debt, End of Year		(17,539.5	)		(16,279.8	)		(17,585.0	)

Totals may not add due to rounding.

¹  Includes disposals and adjustments.

²  Net debt as at March 31, 2021, as reported in the 2020-21 Summary Financial Statements.

³  Adjustment to net debt, beginning of year is the result of changes in accounting standards.

  Budget 2022-23     81  

Government of Saskatchewan

Schedule of Pension Liabilities

As at March 31

(millions of dollars)
	Budget 2022-23			Forecast 2021-22			Budget 2021-22
Pension liabilities, beginning of year		6,431.4			6,575.8	1		6,573.5
Adjustment to account for pension costs on an accrual basis		(268.6	)		(144.4	)		(99.8	)
Pension Liabilities, End of Year		6,162.8			6,431.4			6,473.7

Totals may not add due to rounding.

¹ Pension liabilities as at March  31, 2021, as reported in the 2020-21 Summary Financial Statements.

Government of Saskatchewan

Schedule of Capital Assets

As at March 31

(millions of dollars)
	Net Book Value March 31 20211		– 2021-22 Forecast –				Forecast Net Book Value March 31 2022		– 2022-23 Budget –				Budget Net Book Value March 31 2023
			Additions2		Amortization3				Additions2		Amortization3
Government service organizations		12,017.3		977.3		(652.8)		12,341.8		1,231.8		(592.6)4		12,981.0
Government business enterprises		15,914.7		1,564.7		(991.7)		16,487.7		1,767.7		(984.3)		17,271.1
Total Capital Assets		27,932.0		2,542.0		(1,644.5)		28,829.5		2,999.5		(1,576.9)		30,252.1

Totals may not add due to rounding.

¹ Net book value as at March 31, 2021, as reported in the 2020-21 Summary Financial Statements.

² Includes only capital assets acquired by government entities. Capital transfers provided to entities outside the government reporting entity are expensed.

³ Includes disposals and adjustments.

⁴ Includes a $31.4 million adjustment resulting from changes in accounting standards.

  82     Budget 2022-23  

Government of Saskatchewan

Schedule of Public Debt

As at March 31

(millions of dollars)
					Budget
	Budget General Debt1 2022-23			GBE Specific Debt 2022-23		Budget Public Debt2 2022-23		Forecast Public Debt2 2021-22		Budget Public Debt2 2021-22
Government Service Organization (GSO) Debt
General Revenue Fund
– Operating		9,925.0			–		9,925.0		9,000.0		9,400.0
– Saskatchewan Capital Plan3		9,269.3			–		9,269.3		8,042.3		8,142.0
Boards of Education		122.5			–		122.5		131.6		136.9
Global Transportation Hub Authority		24.1			–		24.1		27.0		40.2
Health Sector Affiliates		8.5			–		8.5		8.5		9.6
Saskatchewan Health Authority		53.8			–		53.8		60.5		59.7
Saskatchewan Opportunities Corporation		46.6			–		46.6		48.3		49.3
Water Security Agency		9.2			–		9.2		14.3		14.3
Other		1.7			–		1.7		1.7		3.4
Government Service Organization Debt		19,460.7			–		19,460.7		17,334.2		17,855.4
Government Business Enterprise (GBE) Debt
Municipal Financing Corporation of Saskatchewan		90.0			151.3		241.3		237.9		243.8
Saskatchewan Gaming Corporation		–			–		–		5.0		5.0
Saskatchewan Liquor and Gaming Authority		–			85.0		85.0		89.8		89.8
Saskatchewan Power Corporation		83.2			6,795.5		6,878.7		6,338.3		6,413.2
Saskatchewan Telecommunications Holding Corporation		–			1,460.3		1,460.3		1,379.1		1,335.3
Saskatchewan Water Corporation		–			96.1		96.1		75.0		80.9
SaskEnergy Incorporated		61.6			1,760.8		1,822.4		1,728.1		1,742.9
Government Business Enterprise Debt4		234.8			10,349.0		10,583.8		9,853.2		9,910.9
Total		19,695.5	5		10,349.0		30,044.5		27,187.4		27,766.3
Guaranteed Debt		35.1			–		35.1		0.2		0.1

Totals may not add due to rounding.

¹ General debt is issued by GSOs and includes issued amounts subsequently transferred to GBEs.

² Public debt is shown net of sinking funds.

³  General Revenue Fund – Saskatchewan Capital Plan consists of amounts borrowed by the General Revenue Fund to finance investment in infrastructure assets.

⁴  GBE debt includes both general debt and GBE-specific debt. General debt of GBEs is the amount transferred from the General Revenue Fund to a GBE and recorded as a loan receivable in the Summary Financial Statements. GBE-specific debt is debt issued by, or specifically on behalf of, GBEs. GBE-specific debt is included in “Investment in government business enterprises” in the Summary Financial Statements.

⁵  In the 2022-23 Summary Financial Statements, general debt will be presented in the Statement of Financial Position on a gross basis, with related sinking funds presented as assets. An exception to this is sinking fund holdings of Saskatchewan debentures, which will be netted against gross debt. As at March 31, 2023, general debt is budgeted to be $21.2 billion, with sinking funds on general debt expected to be $1.5 billion.

  Budget 2022-23     83  

Government of Saskatchewan

Schedule of Revenue

For the Year Ended March 31

(millions of dollars)
	Budget 2022-23			Forecast 2021-22		Budget  2021-22
Own-Source
Taxation
Corporation income		840.5			991.9		754.6
Fuel		507.9			497.9		477.9
Individual income		2,796.9			2,875.5		2,420.8
Property		804.1			780.7		784.8
Provincial sales		2,444.1			2,339.8		2,144.0
Tobacco		198.9			186.8		201.8
Other		500.4			476.1		454.1
Total Taxation		8,092.8			8,148.7		7,238.0
Non-Renewable Resources
Crown land sales		19.3			22.5		9.2
Oil and natural gas		867.5			888.8		505.1
Potash		1,451.7			1,031.9		431.8
Resource surcharge		493.1			416.5		302.6
Other		78.5			77.3		79.8
Total Non-Renewable Resources		2,910.1			2,437.0		1,328.5
Net Income from Government Business Enterprises
Municipal Financing Corporation of Saskatchewan		1.1			1.2		1.1
Saskatchewan Auto Fund		(19.0	)		147.2		192.1
Saskatchewan Gaming Corporation		11.7			7.0		11.5
Saskatchewan Government Insurance		15.8			108.1		40.0
Saskatchewan Liquor and Gaming Authority		444.4			430.0		423.4
Saskatchewan Power Corporation		48.3			10.3		16.7
Saskatchewan Telecommunications Holding Corporation		106.5			100.0		100.0
Saskatchewan Water Corporation		7.4			8.0		7.0
SaskEnergy Incorporated		64.5			51.6		49.7
Saskatchewan Workers’ Compensation Board		13.1			72.6		(1.3)
Consolidation adjustments		48.7			37.5		59.0
Total Net Income from Government Business Enterprises		742.5			973.5		899.2
Other Own-Source Revenue
Fees		1,225.6			1,221.5		1,170.0
Insurance		400.9			724.7		282.7
Investment Income		89.7			88.4		88.4
Transfers from other governments		65.9			73.2		73.2
Miscellaneous		410.4			422.5		489.8
Total Other Own-Source Revenue		2,192.5			2,530.3		2,104.1
Total Own-Source		13,937.9			14,089.5		11,569.8
Transfers from the Federal Government
Canada Health Transfer		1,390.0			1,331.3		1,330.4
Canada Social Transfer		490.1			477.7		477.4
Other		1,339.6			1,597.3		1,100.7
Total Transfers from the Federal Government		3,219.7			3,406.3		2,908.5
Total Revenue		17,157.6			17,495.8		14,478.3

Totals may not add due to rounding.

  84     Budget 2022-23  

Government of Saskatchewan

GLOSSARY OF FINANCIAL TERMS

Accumulated Deficit

The amount by which expense has exceeded revenue from the beginning of provincial incorporation (1905), plus any adjustments that were charged directly to the accumulated deficit. It is calculated as the difference between total assets and liabilities.

Amortization

A systematic process of allocating an amount to revenue or expense over a period of time. Capital assets are amortized to expense over their expected remaining economic life. Actuarial gains and losses, such as those experienced by pension plans, are also amortized.

Budget

Government’s main financial plan that accounts for the full nature and extent of the planned financial activities of all entities in the government reporting entity.

Capital Asset

An asset with physical substance held by the Government that has an economic life extending beyond one year, to be used on a continuing basis and is not for sale in the ordinary course of operations.

Consolidation

The method used to account for government service organizations (GSOs). Financial accounts of the GSOs are adjusted to the basis of accounting described in note 1 of the Summary Financial Statements and the adjusted amounts are combined with amounts for other GSOs and partnerships. Inter-entity balances and transactions are eliminated.

Debt

Obligations incurred through the issuance of debt instruments. Debt does not include other liabilities such as accounts payable or pension obligations. Terms used to describe debt include:

• Gross Debt: borrowings through the issuance of debt instruments such as promissory notes and debentures.

• Sinking Funds: funds set aside for the repayment of debt.

• Public Debt: gross debt net of sinking funds.

• General Debt: public debt net of loans to Crown corporations for Government Business Enterprise (GBE) specific debt.

• GBE-Specific Debt:

– Debt issued by GBEs; and

– Debt issued by the General Revenue Fund (GRF) specifically on behalf of a GBE where the government expects to realize the receivable from the GBE and settle the external debt simultaneously.

• Guaranteed Debt: debt of others that the government has agreed to repay if the others default.

Deficit

The amount by which expense exceeds revenue for a fiscal period.

  Budget 2022-23     85  

Financing Charges

Costs associated with general debt, pension liabilities, obligations under long-term financing arrangements such as public-private partnerships (P3s) and capital lease obligations. Financing charges include interest, foreign exchange gains and losses, discounts, fees and commissions.

General Revenue Fund (GRF)

The primary operational account for the Government through which all provincial monies under the direct authority of the Legislative Assembly are collected and disbursed. The GRF is a GSO and is included in the government reporting entity.

Government Business Enterprise (GBE)

An entity that is controlled by the Government, is self-sufficient and has the financial and operating authority to sell goods and services to individuals and organizations outside the government reporting entity as its principal activity. GBEs are recorded in the Budget using the modified equity method.

Government Reporting Entity

A set of entities that are either controlled by the Government (government service organizations and government business enterprises) or subject to shared control (partnerships). Trusts administered by the Government are excluded from the government reporting entity.

Government Service Organization (GSO)

An entity that is controlled by the Government, except those designated as GBEs or partnerships. GSOs are consolidated in the Budget.

Gross Domestic Product (GDP)

The standard measure of the overall size of an economy, the value of all goods and services produced during a given period.

Modified Equity

The method used to account for GBEs in the Budget. The Government’s share of GBE net earnings or losses is included in budgeted revenue. The government’s investment, which is originally recorded at cost, is adjusted annually to include the net earnings (losses) and other net equity changes of the GBE.

Net Debt

The difference between liabilities and financial assets. Net debt represents the future revenue required to pay for past transactions or events.

Partnership

A contractual arrangement between the Government and one or more partners outside the government reporting entity where the partners share, on an equitable basis, the risks and benefits of the arrangement. Partnerships are proportionately consolidated in the Budget.

Pension Liability

An actuarial estimate of discounted future payments to be made to retirees under government pension plans, net of plan assets.

Proportionate Consolidation

The method used to account for partnerships. Financial accounts of the partnership are adjusted to the basis of accounting described in note 1 of the Summary Financial Statements and the Government’s proportionate share of the adjusted amounts is combined with amounts for GSOs and other partnerships. Inter-entity balances and transactions are eliminated.

Public Private Partnership (P3)

A partnership arrangement in the form of a long-term performance-based agreement between the public sector and the private sector to deliver public infrastructure. The liabilities arising from P3 arrangements are classified as obligations under long-term financing arrangements.

  86     Budget 2022-23  

Prospectus

Province of Saskatchewan

(Canada)

US$2,000,000,000

Debt Securities

We may, from time to time, offer up to US$2,000,000,000 aggregate principal amount of debt securities, consisting of any combination of debentures, notes and bonds, or the equivalent in other currencies (plus such additional principal amount as may be necessary such that, if the debt securities are issued at an original issue discount, the aggregate initial offering price will not exceed US$2,000,000,000), to purchase debt securities. We will provide the specific terms of these debt securities in supplements to this prospectus. You should read this prospectus and the related prospectus supplements carefully before you invest.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

This prospectus is dated February 1, 2022

TABLE OF CONTENTS

Page

About This Prospectus	1
Where You Can Find More Information	1
Forward-Looking Statements	1
Province of Saskatchewan	2
Overview	3
Constitutional Framework	4
Provincial Government	5
Description of the Economy and Gross Domestic Product	5
Key Drivers of the Economy	6
Economic Outlook	13
Debt of the Province	14
Exports and Imports	14
Additional Information	17
Use of Proceeds	18
Description of Debt Securities	18
General	18
Prescription	19
Form, Exchange and Transfer	19
Registered Global Securities	20
Payment of Interest and Principal	21
Canadian Income Tax Considerations	21
United States Income Tax Considerations	22
Enforceability and Governing Law	24
Plan of Distribution	25
Debt Record	26
Authorized Agent	26
Experts and Public Official Documents	26
Legal Matters	26
Annex A— Public Accounts 2020-21 Volume 1	A-1
Annex B—2021-22 First Quarter Financial Report	B-1
Annex C—Provincial Budget 2021-22	C-1
Annex D—Debt Summary and Term Debt Outstanding	D-1
Annex E—Mid-Year Report	E-1

The prospectus supplement that relates to your debt securities may update or supersede any of the information in this prospectus.

The words “the Province”, “we”, “our”, “ours” and “us” refer to the Province of Saskatchewan.

i

ABOUT THIS PROSPECTUS

This prospectus is part of a Registration Statement that we have filed with the Securities and Exchange Commission (the “SEC”), under a “shelf” registration process. Under this shelf process, we may offer, from time to time, the debt securities described in this prospectus in one or more offerings for a total aggregate principal amount of up to US$2,000,000,000 (plus such additional principal amount as may be necessary such that, if the debt securities are issued at an original issue discount, the aggregate initial offering price will not exceed US$2,000,000,000). This prospectus provides you with a general description of the debt securities we may offer. Each time we use this prospectus to offer debt securities we will provide a supplement to this prospectus that will contain specific information about the terms of that offering. The prospectus supplement may also add to, update or change the information this prospectus contains. Before you invest, you should carefully read this prospectus and any prospectus supplement together with the additional information contained in the documents we refer to under the heading “Where You Can Find More Information” below.

References in this prospectus to “$” or “Cdn$” are to lawful money of Canada and “US$” are to lawful money of the United States of America. The noon exchange rate between the U.S. dollar and the Canadian dollar published by the Bank of Canada on January 10, 2022 was approximately Cdn$1.00 = US$0.7887.

WHERE YOU CAN FIND MORE INFORMATION

The Province has filed with the SEC under the Securities Act a registration statement, of which this prospectus forms a part, covering the debt securities. This prospectus does not contain all of the information included in the registration statement. Any statement made in this prospectus concerning the contents of any contract, agreement or other document is not necessarily complete. If the Province has filed any contract, agreement or other document as an exhibit to the registration statement, you should read the exhibit for a more complete understanding of the document or matter involved. Each statement regarding a contract, agreement or other document is qualified in its entirety by reference to the actual document.

The registration statement, including its various exhibits, and any reports, statements or other information that the Province has filed with the SEC are available to the public from the SEC’s Electronic Document Gathering and Retrieval System website at http://www.sec.gov, which is commonly known by the acronym EDGAR.

We have not authorized anyone to provide any information other than that contained in this prospectus or any prospectus supplement or free writing prospectus. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are not making an offer of these debt securities in any state where the offer is not permitted by law. You should not assume that the information in this prospectus or any prospectus supplement or free writing prospectus is accurate as of any date other than the date on the front of those documents. Accordingly, we urge you to review each document we subsequently file with the SEC for updated information.

FORWARD-LOOKING STATEMENTS

The following documents relating to the Province’s debt securities offered by this prospectus may contain forward-looking statements:

• this prospectus; and

• any prospectus supplement.

Forward-looking statements are statements that are not historical facts, including statements about our beliefs and expectations. These statements are based on current plans, estimates and projections, which may change, and therefore you should not place undue reliance on them. Forward-looking statements speak only as of the date

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they are made, and we undertake no obligation to update any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. We caution you that actual results may differ materially from those contained in any forward-looking statements.

PROVINCE OF SASKATCHEWAN

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Overview

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-kilometer southern border with the American states of North Dakota and Montana and its 450-kilometer northern border with the Northwest Territories of Canada. With a 1,250 kilometer distance from north to south, Saskatchewan covers an area of 652,330 square kilometers.

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 1,178,681 on July 1, 2020, compared with approximately 1,172,302 on July 1, 2019, and 1,051,443 on July 1, 2010. The Province’s two largest urban areas are the cities of Regina, the capital of Saskatchewan, with a population of approximately 263,184 on July 1, 2020, and Saskatoon, with a population of approximately 336,614 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.

Population	Area
1,178,681 (July 1, 2020)	Land:
	•  570,700 square kilometers
Major Urban Centres	220,350 square miles
Regina	Fresh Water:
•  Capital of Saskatchewan	•  81,630 square kilometers
•  263,184 (July 1, 2020)*	31,520 square miles
Saskatoon	Total:
•  Centre of Saskatchewan’s resource-based and advanced technology industries	•  652,330 square kilometers
•  336,614 (July 1, 2020)*	251,870 square miles
	Farm Land:
Population Density	•  268,655 square kilometers
1 person per 0.55 square kilometer (per 0.21 square mile)	103,730 square miles
	Cultivated Farm Land:
Mean Temperatures Range (Regina)	•  202,470 square kilometers
January                     -11 to -22 degrees Celsius	78,170 square miles
July                           26 to 12 degrees Celsius	Commercial Forests:
Mean Precipitation (Regina)	•  126,300 square kilometers
January                     15 millimeters	48,760 square miles
July                           59 millimeters
Year                          364 millimeters

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Constitutional Framework

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.

Saskatchewan residents are required to pay both a provincial and federal income tax. While a change in federal income tax rates does not necessitate the adjustment of provincial tax rates, changes in overall effective tax rates for Saskatchewan residents may affect taxes collected by the province. Provincial taxes are also calculated based on federally calculated taxable income. Therefore, a change in the method of calculating this income would directly affect Saskatchewan’s income tax base.

Transfers from the Federal Government

The Canada Health Transfer (CHT) and the Canada Social Transfer (CST) are the Federal Government’s contribution to Saskatchewan in respect of its health care, post-secondary education, childcare, early childhood development and social service programs. The amount of federal assistance does not bear a direct relationship to actual program costs.

The CHT and CST programs were renewed by the Federal Government in 2014-2015 for a 10-year period. For the first three years, a 6.0% annual escalator mechanism was in place for the CHT. Commencing in 2017-18, the CHT was legislated to grow by the three-year average growth rate of national nominal Gross Domestic Product with a floor of 3.0%. In 2020-21 the three-year average growth rate of national nominal Gross Domestic Product is 3.71%, which will be the growth rate for CHT in that year The provincial entitlement is based on an equal per capita cash provincial allocation of a fixed national entitlement, which stands at $1,330.4 million for CHT and $477.4 million for CST for 2021-22.

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Equalization: Equalization is a federal expenditure program that provides unconditional payments to provinces with below average revenue-raising capacities (fiscal capacities), according to a federal formula. The Constitution states that “Parliament and the Government of Canada are committed to the principle of making Equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation”.

Saskatchewan had historically been a province that received an Equalization payment, receiving a payment in all but seven years from the first year of the program in 1957-58 through to 2007-08. Due primarily to a strong economy relative to other Canadian jurisdictions combined with reforms to the Equalization program introduced in the 2007 federal budget, Saskatchewan has not qualified for an Equalization payment since 2007-08.

Stabilization. The Federal Government provides to provinces a realization formula under the Federal-Provincial Fiscal Arrangements Act. This legislation provides for Federal grants and interest-free loans to a province if revenue from the province’s own sources plus equalization falls below 95 per cent of the previous year’s level, excluding variations of natural resource revenue. The Federal-Provincial Fiscal Arrangements Act also provides a limited guarantee arrangement to compensate provinces for certain losses incurred during the calendar year in which a national personal income tax change results in provincial income tax reductions.

There are two ways in which a province can qualify for a stabilization payment from the federal Government: (1) a 50% year-over-year decline in resource revenues, net of any offsetting year-over-year increase in non-resource revenues; or, (2) a 5% year-over-year decline in non-resource revenues, net of any offsetting year-over-year increase in resource revenues.

Qualifying revenues are calculated in detail according to the provisions of the Federal-Provincial Fiscal Arrangements Regulations, 2007. The payment limit under the Federal Stabilization Program has recently been increased to $170 per capita (for 2019-20 and 2020-21 claims) and will be indexed to GDP growth thereafter.

It is expected that several provinces (including Saskatchewan) may qualify for the program in respect of their large revenue declines in 2020-21. Pending qualification, program payments for 2020-21 claims would be made in 2023-24 and would be recognized for financial statement purposes at such time as the transfer is authorized by the Federal government.

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 Cabinet Ministers 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 61 seats and is elected for a term of four 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 October 26, 2020, and resulted in a majority for the Saskatchewan Party as the Government of Saskatchewan. The representation in the Legislative Assembly as of October 31, 2020, was as follows: Saskatchewan Party, 48 seats; and, New Democratic Party, 13 seats.

Description of the Economy and Gross Domestic Product

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

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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. Saskatchewan’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. The provincial government also operates crown-owned businesses, operating in electricity generation, transmission, and distribution, natural gas transmission and distribution, auto insurance and telecommunications.

	2016		2017		2018		2019		2020		Share of 2020 Total			Compound Annual Growth Rate 2016-2020			% Change from 2019
(millions of $ unless otherwise indicated)
Goods-Producing Industries
Agriculture, forestry, fishing and hunting	$	7,177	$	6,990	$	7,032	$	7,103	$	7,232		9.4	%		0.2	%		1.8	%
Mining		20,187		22,024		22,710		21,930		19,919		25.8	%		(0.3	%)		(9.2	%)
Utilities		1,664		1,771		1,828		1,811		1,763		2.3	%		1.4	%		(2.7	%)
Construction		6,211		6,094		5,776		5,519		4,919		6.4	%		(5.7	%)		(10.9	%)
Manufacturing		4,707		4,751		4,866		4,587		4,213		5.5	%		(2.7	%)		(8.1	%)
Subtotal		39,946		41,630		42,211		40,949		38,045		49.3	%		(1.2	%)		(7.1	%)
Services Industries
Transportation and Warehousing		3,511		3,847		3,944		3,901		3492.3		4.5	%		(0.1	%)		(10.5	%)
Finance, Insurance & Real Estates		9,774		10,097		10,266		10,358		10496.6		13.6	%		1.8	%		1.3	%
Wholesale & Retail Trade		6,943		7,057		7,145		7,081		6951.4		9.0	%		0.0	%		(1.8	%)
Business Services		6,861		6,662		6,577		6,589		5757.6		7.5	%		(4.3	%)		(12.6	%)
Institutions		7,801		7,923		8,129		8,377		7945.9		10.3	%		0.5	%		(5.1	%)
Public Administration		3,903		3,963		4,066		4,133		4,146		5.4	%		1.5	%		0.3	%
Subtotal		38,793		39,548		40,127		40,438		38,790		50.3	%		(0.0	%)		(4.1	%)
Real GDP at Basic Prices*		79,318		81,121		82,092		81,384		77,190		100.0	%		(0.7	%)		(5.2	%)

Notes: (1) Components may not add due to the use of chained fisher price methodology.

Source:  Statistics Canada. Table 36-10-0402-01 Gross domestic product (GDP) at basic prices, by industry, provinces and territories (x1,000,000)

Key Drivers of the Economy

Agriculture

Based on the 2016 Census of Agriculture, Saskatchewan has 34,523 farms. With slightly less than half of the total land area of the Province utilized for farming, Saskatchewan 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. From 2016 to 2020, wheat accounted for 26.7 per cent of all crops grown in the Province and represented 37.5 per cent of wheat grown in Canada. In 2020, wheat’s share accounted for 27.6 per cent of the total Saskatchewan crop

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harvest. Canola and durum have constituted 42.3 per cent of Saskatchewan’s crop harvest from 2016 to 2020 but reflect 54.5 per cent and 80.6 per cent of Canada’s average durum and canola production for that same time period.

CROP PRODUCTION

Crop	2016		2017		2018		2019		2020		Average (2016-2020)
	(metric tonnes)
Barley		3,374,700		3,135,200		3,439,200		4,449,200		4,385,100		3,756,680
Canola		10,682,100		11,311,000		11,308,000		11,089,000		10,202,900		10,918,600
Durum		6,177,900		3,879,000		4,636,100		4,342,400		5,211,200		4,849,320
Flaxseed		473,700		447,600		404,200		359,200		453,100		427,560
Oats		1,653,300		1,989,000		1,689,100		2,215,400		2,296,400		1,968,640
Pulse1		5,163,300		4,417,900		4,103,500		4,818,600		5,241,700		4,749,000
Specialty Crops2		302,600		239,500		280,300		259,200		218,200		259,960
Wheat		8,370,600		9,306,300		10,241,000		11,018,400		10,773,000		9,941,860
Other3		388,500		605,500		357,500		265,800		282,700		380,000
Total4		36,586,700		35,331,000		36,458,900		38,817,200		39,064,300		37,251,620

Crop	% of Total		% of Total		% of Total		% of Total
	Sask 2020		Sask 2016-2020		Canada 2020		Canada 2016-2020
	(percentage)
Barley		11.2%		10.1%		47.4%		40.6%
Canola		26.1%		29.3%		51.0%		54.5%
Durum		13.3%		13.0%		86.6%		80.6%
Flaxseed		1.2%		1.1%		83.8%		79.1%
Oats		5.9%		5.3%		59.8%		51.3%
Pulse1		13.4%		12.7%		69.5%		63.0%
Specialty Crops2		0.6%		0.7%		70.7%		84.3%
Wheat		27.6%		26.7%		40.6%		37.5%
Other3		0.7%		1.0%		1.3%		1.7%
Total4		100.0%		100.0%		40.6%		38.7%

¹ Includes dry beans, chick peas, faba beans, lentils and peas.

² Includes canary seed and mustard seed.

³ Includes buckwheat, corn for grain, hemp, mixed grains, rye, soybeans and triticale.

⁴ Tame hay and silage have not been included. Components may not add due to rounding.

Sources: Statistics Canada. Table 32-10-0359-01 Estimate areas, yield, production, ave farm price and total farm value of principal field crops

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.

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The following table sets forth Saskatchewan’s farm cash receipts for the five years ended December 31, 2020.

FARM CASH RECEIPTS

	2016		2017		2018		2019		2020		Compound Annual Growth Rate 2016-2020		Share of Total 2020		% Change 2019 to 2020
Crop Cash Receipts	(millions)
Wheat & Durum	$	2,607	$	2,793	$	3,241	$	3,272	$	3,850		10.2%		28.2%		17.7%
Canola		5,003		5,436		5,293		4,810		5,894		4.2%		43.1%		22.5%
Barley		309		352		465		520		628		19.4%		4.6%		20.8%
Other Crop1		3,565		2,542		2,225		2,514		3,301		(1.9%)		24.1%		31.3%
Total Crop Receipts		11,485		11,122		11,225		11,117		13,673		4.5%		100.0%		23.0%
Livestock Cash Receipts
Cattle & Calves	$	1,340	$	1,545	$	1,517	$	1,490	$	1,374		0.6%		61.2%		(7.8%)
Hogs		280		336		308		358		355		6.1%		15.8%		(0.9%)
Other2		436		460		484		514		516		4.3%		23.0%		0.4%
Total Livestock		2,057		2,341		2,309		2,362		2,245		2.2%		100.0%		(4.9%)
Supplementary, Deficiency, Stabilization	$	667	$	749	$	511	$	614	$	645		1.0%				5.0%
Total Farm Cash Receipts	$	14,208	$	14,213	$	14,045	$	14,093	$	16,563		3.9%				17.5%
Realized Net Farm Income	$	2,878	$	2,581	$	2,136	$	1,726	$	4,455		11.5%				158.1%

¹ Includes net deferments.

² Includes sheep, lambs, dairy products, poultry, eggs and other livestock products.

Sources: Statistics Canada. Table 32-10-0045-01 Farm cash receipts, annual (x 1,000); and Table 32-10-0052-01 Net farm income (x 1,000)

Total farm cash receipts reached $16.6 billion in 2020, up 17.5 per cent from 2019.

Total farm revenue is made up of three components: crop receipts, livestock receipts and government program payments. Crop receipts amounted to $13.7 billion in 2020, up 23.0 per cent from 2019 due to higher production and prices. Wheat, durum and canola accounted for $9.7 billion, or 71.3 per cent, of the year’s total cash receipts from crop sales Farm cash receipts from livestock sales amounted to $2.2 billion in the same year, down 4.9 per cent from 2019. Cattle and calves accounted for $1.4 billion, or 61.2 per cent, of the year’s total cash receipts from livestock sales. Government payments in 2020 amounted to $645 million, up 5.0 per cent from the amount provided by both the federal and provincial governments to farmers in 2019.

Saskatchewan’s 2020 realized net farm income amounted to $4.5 billion, compared with $1.7 billion in 2019. Realized net farm income is the result of deducting farm operating expenses and depreciation cost from farm cash receipts.

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Mining and Petroleum/Natural Gas

In 2020, the total value of mineral sales amounted to $11.9 billion, a decrease of 33.5 per cent from the prior year due to weak oil prices. Crude oil, natural gas and potash accounted for 95.1 per cent of the total value of mineral sales in 2020.

In the first three months of 2021, the value of oil production increased by 36.0 per cent while the value of natural gas sales rose by 24.2 per cent. The value of potash sales increased by 4.8 per cent in the first three months of 2021.

The following table sets forth Saskatchewan’s value and volume of mineral sales for the five years ended December 31, 2020.

MINERAL SALES

	2016		2017		2018		2019		2020		Compound Annual Growth Rate 2016-2020			Share of Total 2020			% Change 2019 to 2020
Value of Sales	(millions of dollars unless otherwise indicated)
Oil1	$	6,627	$	8,894	$	9,563	$	10,299	$	5,548		(4.3	%)		46.6	%		(46.1	%)
Natural Gas		320		346		228		244		314		(0.5	%)		2.6	%		28.8	%
Potash		4,182		4,763		5,713		6,287		5,467		6.9	%		45.9	%		(13.0	%)
Uranium		1,880		1,413		659		711		317		(35.9	%)		2.7	%		(55.4	%)
Other2		373		373		360		364		264		(8.3	%)		2.2	%		(27.5	%)
Total		13,382		15,789		16,524		17,904		11,910		(2.9	%)		100.0	%		(33.5	%)
Volume of Production
Oil (millions of barrels)		168		177		178		178		159		(1.4	%)					(10.5	%)
Natural Gas (millions of cubic metres)		5,333		5,298		5,178		5,050		4,464		(4.3	%)					(11.6	%)
Potash (thousands of tonnes		10,966		12,407		13,143		12,559		13,618		5.6	%					8.4	%

¹ The value of oil sales is not available for 2020 so the amount reflects the value of oil production.

² Includes uranium, gold, sodium sulphate, salt, coal, and base metals and bentonite.

Sources: Saskatchewan Bureau of Statistics (historical data); Ministry of Energy and Resources (current year data).

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.

In 2020, the value of Saskatchewan oil production decreased by 46.1 per cent and the volume of oil production decreased by 10.5 per cent.

Saskatchewan crude oil production is of light, medium and heavy gravity. The major market for Saskatchewan’s oil is the upper Midwest of the United States (approximately 65 to 75 per cent).

Currently, Saskatchewan has two facilities capable of upgrading heavy oil: The Husky Energy Lloydminster Upgrader in Lloydminster and the Co-op Refinery Complex in Regina. Husky’s upgrader currently has a throughput capacity of 82,000 barrels of heavy crude oil per day while the Co-op Refinery Complex has the ability to process 135,000 barrels of crude oil per day. The Moose Jaw Refinery, an affiliate of Gibson Energy Ltd., currently processes about 22,000 barrels per day for use as roofing flux and high quality road asphalt.

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In addition to local companies, a large number of multinational oil and natural 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, new waterflood and enhanced oil recovery (EOR) techniques. The oil industry in the Province invested approximately $18.1 billion in the period from 2016 to 2020 exploring for and developing oil reserves. From 2016 to the end of 2020, 9,641 oil wells were drilled in Saskatchewan. In 2020, 1,057 oil wells were drilled in the Province.

Natural Gas. The volume of Saskatchewan natural gas produced decreased by 11.6 per cent in 2020, while the value of natural gas production available for use or sale increased by 28.8 per cent. The natural gas industry in the Province invested approximately $2 million in the period from 2016 to 2020 exploring for and developing natural gas reserves. During this period, 3 natural gas wells were drilled. In 2020, one natural gas well was 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, the Saskatchewan potash industry has accounted for about 30 per cent of the world’s production and world trade. Saskatchewan’s largest potash market is the United States, followed by Brazil, China and India. The Saskatchewan government implemented changes in 2003 and 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 has spent over $20 billion since 2005, expanding existing mines and developing new mines in the Province, including the K+S solution mine at Bethune, Saskatchewan, the first new potash mine built in the Province since the 1970s. There is also potential for the development of additional new potash mines, such as the BHP Billiton conventional shaft mine at Jansen, which will cost US$5.3 to US$5.7 billion to complete. 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. Saskatchewan is typically the world’s second largest producer of uranium behind Kazakhstan. Saskatchewan is the sole producer of uranium in Canada and has been producing uranium continuously since 1953. Uranium production is from the Athabasca Basin in northern Saskatchewan, which contains the largest, high-grade uranium deposits in the world and has significant potential for the discovery of additional deposits. Saskatchewan is recognized as a long-term and stable source of uranium.

Cigar Lake began commercial production in 2015. Uranium production in 2020 was solely from the Cigar Lake uranium mine and milled at the McClean Lake uranium mill located in northern Saskatchewan. Construction of the McClean Lake operation began in 1994. The mining and milling of uranium ore from five open-pit mines have been completed and no conventional mining has been carried out at McClean Lake since 2008. Uranium ore mined at Cigar Lake is processed at the McClean Lake mill.

Future uranium production is forecast from several other deposits, including the restart of the McArthur River uranium mine. The McArthur River project began production in 1999 with the ore being processed at the Key Lake mill. Operations at the McArthur River and Key Lake facilities were suspended indefinitely in 2018 due to continued weakness in the uranium market. The operations remain in a safe state of care and maintenance.

Multiple exploration companies are working towards developing new uranium mines in Saskatchewan. The most advanced projects are NexGen Energy’s Rook 1 project, Denison Mines’ Wheeler River project, and Fission Uranium’s Patterson Lake South project.

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The Rabbit Lake mine opened in 1975 was the longest operating uranium mine in North America. Rabbit Lake was transitioned into a safe state of care and maintenance in 2016.

Service Sector

Overview. 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 75.4 per cent of total employment in the Province in 2020.

This sector is comprised of six industries: 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 13.6 per cent of the entire Saskatchewan economy in 2020. This segment includes banks and other institutions delivering financial services, insurance carriers and agencies and real estate companies.

SERVICE INDUSTRY INDICATORS

	2016		2017		2018		2019		2020		Compound Annual Growth Rate 2016-2020			% Change from 2019
	(millions)
Retail Sales (dollars)	$	18,804	$	19,577	$	19,479	$	19,529	$	19,274		0.6	%		(1.3	%)
Wholesale Trade (dollars)		25,754		25,911		26,567		26,352		27,783		1.9	%		5.4	%
Value of Building Permits (dollars)		1,971		2,196		1,834		1,588		1,392		(8.3	%)		(12.3	%)
Manufacturing Sales (dollars)		13,654		15,181		17,211		15,554		13,368		(0.5	%)		(14.0	%)
	$	60,182	$	62,865	$	65,092	$	63,023	$	61,817		0.7	%		(1.9	%)
New Housing Starts (units)		4,775		4,904		3,610		2,427		3,087		(10.3	%)		27.2	%
New Motor Vehicle Sales (units)		52,099		56,292		50,224		48,669		41,817		(5.3	%)		(14.1	%)

Sources: Statistics Canada. Table 20-10-0008-02 Retail trade sales by industry (x 1,000); Table 20-10-0074-01 Wholesale trade, sales (x 1,000); Table 34-10-0066-01 Building permits, by type of structure and type of work (x 1,000); Table 16-10-0048-01 Manufacturing sales by industry and province, monthly (dollars unless otherwise noted) (x 1,000); Table 34-10-0135-01 Canada Mortgage and Housing Corporation, housing starts, under construction and completions, all areas, quarterly; and Table 20-10-0001-01 New motor vehicle sales

Crown Corporations

Saskatchewan’s Crown corporations are involved in a broad range of activities including providing electricity, natural gas, telecommunications, insurance and other goods and services. Crown corporations are almost exclusively commercial enterprises intended to be self-sustaining.

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CIC is a provincial Crown corporation without share capital, established and operating under the authority of The Crown Corporations Act, 1993. CIC as a legal entity does not carry debt. CIC is wholly owned by the Government of Saskatchewan. CIC is responsible for certain government investments including Crown corporations and financial and operating investments.

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

SGI CANADA

SGI CANADA is the trade name of the property and casualty insurance division of Saskatchewan Government Insurance (SGI) which offers products in five Canadian provinces. It operates as SGI CANADA in Saskatchewan, SGI CANADA Insurance Services Ltd. (SCISL) in Alberta, Manitoba, British Columbia, and Ontario. SCISL also has a wholly-owned subsidiary, Coachman Insurance Company, that operates in Ontario. Products are sold through a network of 158 independent brokers throughout Saskatchewan and 202 brokers operating in Manitoba, Alberta, British Columbia, and Ontario.

Saskatchewan Auto Fund

As the compulsory automobile insurance program for Saskatchewan residents, the Auto Fund provides vehicle registrations, driver’s licences, basic minimum liability insurance required to operate a vehicle and coverage for damage to or loss of an insured’s vehicle, subject to a deductible. The Auto Fund is administered by SGI. SGI’s role is to oversee the operations of the Auto Fund for the Province of Saskatchewan based on the legislative requirements contained in The Automobile Accident Insurance Act.

The Auto Fund does not receive money from, nor pay dividends to, the Province of Saskatchewan, SGI, or CIC. The Auto Fund is operated on a self-sustaining basis viewed over a long-term time frame. Any annual financial excess or deficiencies of the Auto Fund are recorded in its Rate Stabilization Reserve (RSR). The RSR is held on behalf of Saskatchewan’s motoring public and cannot be used for any other purpose by the government or the administrator.

The Saskatchewan Auto Fund is not a Crown corporation and is not included in CIC’s consolidated results. However, it is administered by Saskatchewan Government Insurance (SGI).

SaskPower

SaskPower is Saskatchewan’s leading energy supplier. It generates, purchases, transmits, distributes, and sells electricity and related products and services. SaskPower uses a wide range of fuels including natural gas, coal, hydro, and wind.

SaskTel

SaskTel provides competitive wireless, voice, entertainment, internet, data, equipment, marketing, security, software and consulting products and services. 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. SaskTel’s operations are regulated by the Canadian Radio-television and Telecommunications Commission.

SaskEnergy

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.

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Fiscal Year 2020-21 Highlights - Consolidated Basis

(millions of dollars)	2016-17			2017-18			2018-19			2019-20			2020-21
SGI CANADA	$	65.2		$	59.4		$	48.0		$	49.9		$	172.1
SaskPower		56.3			145.5			197.0			205.8			160.2
SaskTel		134.8			121.0			127.4			119.8			130.8
SaskEnergy		145.6			143.5			165.7			43.5			80.8
CIC Asset Management Inc.		(3.0	)		(2.6	)		(6.0	)		2.2			17.1
SaskWater		6.5			8.1			7.5			8.4			8.3
Saskatchewan Immigrant Investor Fund		(1.4	)		(1.1	)		(2.2	)		7.1			2.4
Saskatchewan Opportunities Corporation		0.5			5.6			3.5			3.0			0.6
Saskatchewan Transportation Company		(5.3	)		26.6			—			—			—
Saskatchewan Gaming Corporation		24.4			23.2			22.5			20.1			(13.4	)
CIC (Separate)		132.1			213.1			235.3			212.5			272.4
Other1		(157.1	)		(239.3	)		(258.1	)		(236.9	)		(245.9	)
CIC Consolidated net earnings	$	398.6		$	503.0		$	540.6		$	435.4		$	585.4
Saskatchewan Auto Fund	$	188.7		$	210.1		$	77.5		($	46.7	)	$	283.4

¹  Includes First Nations and Métis Fund Inc., CIC Economic Holdco Ltd., and consolidation adjustments. Consolidation adjustments reflect the elimination of all inter-entity transactions, such as grants from CIC to Crown corporations, revenues and expenses between Crown corporations, and dividends paid by Crown corporations to CIC.

Economic Outlook

COVID-19 Health Emergency and Oil Prices

Saskatchewan faces challenges as a result of the unprecedented impact of the COVID-19 health emergency and weak oil prices in 2020. Saskatchewan fourth-wave case numbers peaked in late September but began a sharp decline in the middle of October. The 7-day average of new cases was 50.9 cases per day (4.3 per 100,000) and COVID hospitalizations were down to 105 in total (8.9 per 100,000). The Province introduced measures to combat the fourth wave, including a vaccine passport and mask mandate, which remain in effect and will continue for the foreseeable future.

Most recently, as in most jurisdictions in North America, Saskatchewan experienced a material increase in COVID cases in late December 2021 and early January 2022 as a result of the Omicron variant. The number of daily new cases increased during the last week of December 2021, primarily due to the new variant. The average daily new cases rose from approximately 50 per day in mid-December to around 500 at the beginning of 2022. When compared with the previous wave, which was dominated by the Delta variant, hospitalizations as a percentage of active cases appear to be notably lower; on September 16, 2021, there were 4,064 active cases, including 218 hospitalized cases; on January 4, 2022, there were 4,062 active cases, including 95 hospitalized cases. This trend of more daily cases accompanied by fewer hospitalizations has continued.

As of January 11, 2022, the Government of Saskatchewan has not imposed further economic or social restrictions on the Province. The ultimate impact of the Omicron variant on the Province is not known at this time.

The Province does not anticipate a material change in its expectations for employment or consumer spending as a result of its most recent wave of COVID-19. In November 2021, Saskatchewan’s seasonally-adjusted unemployment rate declined to 5.2 per cent during the fourth wave.

Most economic indicators suggest the impact of these factors appears to have been less than initially forecast for 2020. In 2021, Saskatchewan’s economy is expected to continue on a path of recovery as global demand and oil prices recover, and business and consumer confidence is expected to regain momentum.

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As of September 30, 2021, Saskatchewan’s real GDP is expected to grow by 3.6 per cent in 2021 and 3.8 per cent in 2022.

Employment is currently forecast to increase by 15,900 jobs in 2021 and by another 12,000 jobs in 2022. Unemployment is forecast to average 7.0 percent in 2021. Retail and whole trade account for 10,170 of the total 13,730 jobs from January to October 2021.

Challenges facing the agriculture sector

Saskatchewan Crop Insurance Corporation “SCIC” is jointly funded by producers and the federal and provincial governments to provide production insurance to Saskatchewan producers.

As of the Province’s Mid-Year Report, crop production fell by approximately 40.6 per cent due to widespread drought conditions. This year’s crop size of approximately 22.3 million tonnes is well below the 10-year average of approximately 33.0 million tonnes. The Province forecasts total Crop insurance indemnities for the year to be $2.4 billion, which will be partially offset by private reinsurance revenues of approximately $400 million.

Increase in Oil Prices

The increase in oil prices since Saskatchewan issued its 2021-22 Budget in April of 2021 improved forecasted revenue from non-renewable resources as reflected in the Province’s Mid-Year Report.

Risks to the Outlook

• Changes in economic factors such as economic growth or decline, commodity and non-renewable resource prices, inflation, interest rates, marketplace competition, trade barriers, population change, personal income and retail sales present risks to the outlook for Saskatchewan’s economy.

Saskatchewan is reliant on the revenue from non-renewable resources and, thus, the Province’s financial results can be influenced by other external factors, most notably the price of oil and of potash. The fiscal impact of these changes in economic assumptions is estimated on a regular basis to quantify the risk associated with each assumption.

As of the Province’s Mid-Year Report, underlying assumption sensitivities included the following:

	Change		Net Impact
Oil Price (WTI US$/barrel)	$	1	$	14M
Exchange Rate		1 cent	$	33M
Potash Prices (US$/KCI tonne)	$	1	$	6M

• Factors affecting agricultural production (crop and livestock) including weather and moisture conditions, as well as market prices for both commodities and the related inputs cost (such as fertilizer, fuel, etc.).

• Risk and uncertainties regarding future effects of the COVID-19 pandemic.

Debt of the Province

For information regarding the Province’s outstanding debt, refer to Annex A—Public Accounts 2020-21 Volume 1 and Annex D—Term Debt Outstanding and Debt Summary.

Exports and Imports

Based on Statistics Canada’s Provincial Economic Accounts, Saskatchewan’s international exports were $33.9 billion in 2019 and accounted for 64.0 per cent of total exports. The other 36.0 per cent of exports consisted of trade with other Canadian provinces. International exports increased at a compound average annual rate of 4.0 per cent over the period from 2016 to 2019. Total exports to other provinces were $19.1 billion in 2019 and increased by 2.8 per cent from 2016 to 2019.

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The trade balance was $5.4 billion in 2019, an increase of 25.7 per cent since 2016.

The following table sets forth details of Saskatchewan’s exports and imports at current market prices for the five years ended December 31, 2020.

	2016		2017		2018		2019		Compound Annual Growth Rate 2016-2019			Share of Total 2019
	(millions of dollars)
Exports
To other countries	$	28,959	$	32,186	$	34,516	$	33,892		5.4	%		64.0	%
Goods		27,399		30,589		32,880		32,227		5.6	%		60.8	%
Services		1,560		1,597		1,636		1,665		2.2	%		3.2	%
To other provinces		17,081		18,005		18,855		19,095		3.8	%		36.0	%
Goods		9,993		10,819		11,415		11,483		4.7	%		21.7	%
Services		7,088		7,186		7,440		7,612		2.4	%		14.4	%
Total exports of goods and services	$	46,040	$	50,191	$	53,371	$	52,987		4.8	%		100.0	%
Imports
From other countries	$	19,002	$	20,244	$	20,640	$	20,898		3.2	%		43.9	%
Goods		16,161		17,352		17,626		17,748		3.2	%		37.3	%
Services		2,841		2,892		3,014		3,150		3.5	%		6.6	%
From other provinces		24,885		26,006		26,638		26,719		2.4	%		56.1	%
Goods		10,413		10,833		11,017		11,111		2.2	%		23.3	%
Services		14,472		15,173		15,621		15,608		2.6	%		32.8	%
Total imports of goods and services	$	43,887	$	46,250	$	47,278	$	47,617		2.8	%		100.0	%
Balance of Trade	$	2,153	$	3,941	$	6,093	$	5,370		35.6	%

Sources: Statistics Canada. Table 36-10-0222-01 Gross domestic product, expenditure-based, provincial and territorial, annual (x 1,000,000)

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Farm and intermediate food products, energy products (crude oil) and non-metallic minerals (potash) are Saskatchewan’s principal exports, accounting for 55.5 per cent, 17.0 per cent and 20.0 per cent, respectively, of total international exports in 2020. For the five years ended December 31, 2020, total international exports increased by 3.4 per cent per year while imports increased by an average of 2.6 per cent per year.

	2016		2017		2018		2019		2020		Compound Annual Growth Rate 2016-2020			Share of Total 2020
	(millions of dollars)
Exports
Farm, fishing and intermediate food products	$	14,364	$	13,276	$	13,355	$	12,831	$	16,788		4.0	%		55.5	%
Energy products		5,424		7,990		8,082		7,737		5,132		(1.4	%)		17.0	%
Metal ores and non-metallic minerals		4,695		5,087		6,424		6,560		6,046		6.5	%		20.0	%
Other		1,954		2,304		2,773		2,481		2,287		4.0	%		7.6	%
Total Exports	$	26,437	$	28,657	$	30,634	$	29,609	$	30,254		3.4	%		100.0	%
Imports
Chemical, plastic and rubber products	$	1,413	$	1,748	$	1,846	$	1,775	$	1,734		5.3	%		17.4	%
Machinery, equipment and parts		3,110		3,893		4,172		4,112		3,050		(0.5	%)		30.6	%
Motor vehicles and parts		854		1,368		1,560		1,382		955		2.8	%		9.6	%
Others		3,614		4,586		3,592		3,620		4,237		4.1	%		42.5	%
Total	$	8,991	$	11,594	$	11,170	$	10,889	$	9,975		2.6	%		100.0	%
Balance of Trade	$	17,446	$	17,063	$	19,464	$	18,719	$	20,279		3.8	%

Sources:    Statistics Canada. Table 12-10-0119-01 Int merchandise trade by province, commodity, and Principal Trading Partners (x 1,000)

The United States is Saskatchewan’s largest trading partner, followed by China. In 2020, Saskatchewan sold $13.1 billion of goods to the United States, which accounted for 43.3 per cent of total international exports. Approximately $4.1 billion of goods were sold to China which accounted for 13.6 per cent of total international exports.

During the 2016 to 2020 period, total international exports grew by 3.4 per cent compound average annual rate from $26.5 billion to $30.3 billion.

In 2020, about 82.0 per cent of goods were imported from the Unites States. Imports from China grew substantially by 12.0 per cent from $261 million to $411 million during the 2019 to 2020 period.

Total international imports grew by 2.6 per cent compound average annual rate from $9.0 billion to $10.0 billion over the 2016 to 2020 period.

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	2016		2017		2018		2019		2020		Compound Annual Growth Rate 2016-2020			Share of Total 2020
	(millions of dollars)
International Exports
United States	$	12,560	$	16,052	$	16,847	$	16,076	$	13,130		1.1	%		43.3	%
China		3,386		3,376		4,602		3,124		4,134		5.1	%		13.6	%
Japan		979		1,125		1,123		1,081		1,240		6.1	%		4.1	%
India		1,454		1,040		629		775		1,204		(4.6	%)		4.0	%
Brazil		686		551		931		1,049		978		9.2	%		3.2	%
Mexico		696		776		820		596		711		0.5	%		2.3	%
Indonesia		548		585		792		658		677		5.4	%		2.2	%
Bangladesh		441		294		292		636		629		9.3	%		2.1	%
United Arab Emirates		466		492		293		412		627		7.7	%		2.1	%
Italy (incl. Vatican City State)		324		191		133		303		543		13.8	%		1.8	%
Sub-total		21,541		24,483		26,463		24,710		23,874		2.6	%		78.8	%
Others		4,989		4,242		4,211		4,941		6,428		6.5	%		21.2	%
Total All Countries	$	26,530	$	28,725	$	30,674	$	29,652	$	30,302		3.4	%		100.0	%
International Imports
United States	$	7,489	$	9,851	$	9,274	$	8,685	$	8,178		2.2	%		82.0	%
China		261		378		438		502		411		12.0	%		4.1	%
Germany		231		271		365		359		255		2.5	%		2.6	%
Mexico		204		230		241		410		207		0.4	%		2.1	%
Italy (incl. Vatican City State)		66		67		68		70		150		23.0	%		1.5	%
Japan		105		116		123		122		103		(0.6	%)		1.0	%
United Kingdom		96		105		113		102		67		(8.7	%)		0.7	%
Re-Imports (Canada)		68		64		62		53		55		(5.0	%)		0.6	%
India		46		40		46		48		53		3.8	%		0.5	%
Korea, South		32		36		33		35		40		6.2	%		0.4	%
Sub-total		8,597		11,158		10,761		10,387		9,520		2.6	%		95.4	%
Others		394		436		409		503		455		3.7	%		4.6	%
Total All Countries	$	8,991	$	11,594	$	11,170	$	10,889	$	9,975		2.6	%		100.0	%

Sources:    Innovation, Science, and Economic Development Canada

Additional Information

For additional information regarding the Province’s economy, fiscal condition and budget, refer to Annex A—Public Accounts 2020-21 Volume 1, Annex B—2021-22 First Quarter Financial Report, Annex C—Provincial Budget 2021-22 and Annex E—Mid-Year Report, included elsewhere in this prospectus.

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USE OF PROCEEDS

Unless otherwise indicated in the applicable prospectus supplement, the net proceeds to the Province from the sale of the debt securities by the Province will be used for general government purposes.

DESCRIPTION OF DEBT SECURITIES

The Province may issue debt securities in distinct series at various times. This section summarizes the terms of the debt securities that are common to all series. The particular terms and provisions of a series of debt securities, and how the general terms and provisions described below may apply to that series, will be described in a supplement to this prospectus.

If the terms described in the prospectus supplement that relates to your series differ from the terms described in this prospectus, you should rely on the terms described in the prospectus supplement. The prospectus supplement that relates to your debt securities may update or supersede any of the information in this section.

General

The Province has duly authorized the issuance of debt securities and they may be issued by one or more Orders of the Lieutenant Governor in Council of the Province of Saskatchewan made pursuant to The Financial Administration Act, 1993 from time to time. The Order(s) of the Lieutenant Governor in Council of the Province of Saskatchewan applicable to any tranche of debt securities (including any new Orders) will be specified in the applicable prospectus supplement. The debt securities will be our direct unsecured obligations and among themselves will rank pari passu and be payable without preference or priority. The debt securities will rank equally with all of our other unsecured and unsubordinated indebtedness and obligations from time to time outstanding. Payments of principal and interest on the debt securities will be payable out of the General Revenue Fund of the Province.

The prospectus supplement that relates to your debt securities will specify the following terms:

• the price and aggregate principal amount of the debt securities;

• the title of the debt securities;

• the stated maturity date of the debt securities, which is the date on which the Province must repay the principal amount of the debt securities;

• the interest rate which the debt securities will bear and, if variable, the method by which the interest rate will be calculated;

• the issue date and the date from which interest will accrue, the dates on which the Province must pay interest, and the record dates for payment of interest;

• where and how the Province will pay principal and interest;

• whether and in what circumstances the debt securities may be redeemed or repaid before maturity;

• whether and in what circumstances the debt securities may be convertible into debt securities of a different series or other indebtedness of the Province;

• whether and in what circumstances sinking fund payments will be made;

• whether any amount payable in respect of the debt securities will be determined based on an index or formula, and how any such amount will be determined;

• whether the debt securities will be issued as discounted debt securities (bearing no interest or interest at a rate which at the time of issue is below market rates) to be sold at a substantial discount below their stated principal amount;

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• whether the debt securities will be issued with original issue discount for U.S. federal income tax purposes;

• any foreign currency in which the Province may denominate or pay interest or principal on the debt securities;

• whether any part or all of the debt securities will be in the form of a global security and the circumstances in which a global security will be exchangeable for definitive (physical) securities;

• the exchange or exchanges, if any, on which application for listing of the debt securities may be made; and

• any other material terms of the debt securities.

If applicable, the prospectus supplement will also describe any material United States or Canadian federal income tax considerations applicable to the debt securities other than those described in this prospectus.

Prescription

The debt securities will become void unless presented for payment within a period of the lesser of 2 years, or the period that may otherwise be prescribed by law, from the date on which payment in respect of such debt securities become due and payable or if the full amount of the moneys payable on such date in respect of the debt securities has not been received by the fiscal agent on or prior to such date, the date on which notice is duly given to the holders of the debt securities that such moneys have been so received.

Form, Exchange and Transfer

The debt securities will be issued:

• only in fully registered form;

• without interest coupons; and

• in minimum aggregate principal amounts of US$5,000 and integral multiples of US$1,000 for amounts in excess of US$5,000, or as described in the prospectus supplement.

The Province may, but is not required to, appoint a fiscal agent or agents to act on its behalf in connection with the debt securities. If appointed, the duties of the fiscal agent for any series of debt securities will be governed by a fiscal agency agreement for that particular series. The Province may appoint different fiscal agents for different series of debt securities and may vary or terminate the appointment of any fiscal agent at any time. The Province may maintain deposit accounts and conduct other banking and financial transactions with the fiscal agent. The fiscal agent, if any, will be the agent of the Province, will not be trustee for the holders of debt securities and will not have the same responsibilities or duties to act for such holders as would a trustee.

Unless otherwise specified in the prospectus supplement relating to the debt securities, the Province will maintain at an office in the Borough of Manhattan, The City of New York, a register for the registration of transfers of debt securities issued in registered form.

If debt securities are issued in definitive registered form, you may exchange debt securities registered in your name for other authorized denominations of the same series of equal aggregate principal amount. You may arrange to exchange or transfer debt securities registered in your name at the office of the fiscal agent or other person identified in the prospectus supplement. You will not be required to pay a service charge to transfer or exchange debt securities, but you may be required to pay for any tax or other governmental charge associated with the transfer or exchange. The transfer or exchange will be made after the fiscal agent or other person authorized by the Province is satisfied with your evidence of title.

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Registered Global Securities

The prospectus supplement that relates to your debt securities will indicate whether any of the debt securities you purchase will be represented by one or more fully registered global debt securities. The aggregate principal amount of any global security equals the sum of the principal amount of all the debt securities it represents. The global security will be registered in the name of a depositary or its nominee identified in the prospectus supplement, and will be deposited with the depositary, its nominee or a custodian (the “depositary”). The specific terms of the depositary arrangement in respect of registered global securities will be described in the prospectus supplement relating to the global securities. Beneficial interests in the debt securities will be represented through book-entry accounts of financial institutions acting on behalf of beneficial owners as direct and indirect participants of the depositary. The debt securities represented by a global security may not be transferred to the name of any other direct holder unless the special circumstances described below occur. Any investor wishing to beneficially own a debt security represented by a global security must do so indirectly through brokers, banks or other financial institutions who are participants in the depositary.

Special Investor Considerations for Global Securities

Our obligations, as well as the obligations of the fiscal agent and those of any agents retained by us or the fiscal agent, are owed only to persons who are registered as holders of debt securities. For example, once we make payment to the registered holder, we have no further responsibility for the payment even if that holder is legally required to pass the payment along to you but does not do so. As an indirect holder, an investor’s rights relating to a global security will be governed by the account rules of the investor’s financial institution and of the depositary, as well as general laws relating to these types of arrangements.

An investor should be aware that when debt securities are issued in the form of global securities:

• the investor cannot get debt securities registered in its own name;

• the investor cannot receive physical certificates for its interest in the debt securities;

• the investor must look to its own bank, brokerage firm or financial institution for payments on the debt securities and protection of its legal rights relating to the debt securities;

• the investor may not be able to sell or pledge interests in the debt securities to some insurance companies and other institutions that are required by law to hold the physical certificates of debt securities that they own;

• the depositary’s policies will govern payments, transfers, exchanges and other matters relating to the investor’s interest in the global security;

• the Province and the fiscal agent have no responsibility for any aspect of the depositary’s actions or for its records of ownership interests in the global security;

• the Province and the fiscal agent do not supervise or review the records of the depositary in any way; and

• the depositary will usually require that interests in a global security be purchased or sold within its system using same-day funds.

Special Situations When the Global Security Will be Terminated

In a few special situations described below, a global security will terminate and interests in it will be exchanged for physical certificates representing debt securities. After that exchange, an investor may choose whether to hold debt securities directly in its own name or indirectly through an account at its bank, brokerage firm or financial institution. Investors must consult their own banks or brokers to find out how to have their beneficial interests in debt securities transferred into their own names, so that they will be direct registered holders.

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The special situations for termination of a global security are:

• when the depositary notifies us that it is unwilling, unable or no longer qualified to continue as depositary (unless a replacement depositary is named); and

• when and if we decide to terminate a global security.

The prospectus supplement may list situations for terminating a global security that would apply only to the particular series of debt securities covered by the prospectus supplement. When a global security terminates, the depositary (and not the Province or the fiscal agent) is responsible for deciding the names of the institutions that will be the registered holders after the exchange and also for advising the Province and the fiscal agent what the names will be.

Payment of Interest and Principal

On every interest payment date specified in the prospectus supplement, the Province will pay the interest due on a debt security to the person in whose name the debt security is registered at the close of business on the related “record date”. The record date will be specified in the prospectus supplement.

We, our registrar and any of our paying agents appointed through a fiscal agency agreement shall treat the registered holders of the debt securities as the absolute owners thereof for all purposes whatsoever and all payments to or on the order of the registered holders shall be valid and shall discharge our liability and that of the registrar and any paying agent of the debt securities to the extent of the sum or sums so paid.

Unless otherwise specified in the prospectus supplement relating to the debt securities, the Province will make all payments of principal and interest on the debt securities available to the fiscal agent, if any, on the designated dates in immediately available funds. The fiscal agent, if any, will in turn make payments to the registered holders of the debt securities (or, in the case of a global security, to the depositary) as soon as possible. Any payments of principal and interest on the debt securities are subject to local laws and regulations, including any applicable withholding or other taxes.

Canadian Income Tax Considerations

The following summary (the “Canadian Tax Summary”) describes the principal income tax consequences which arise generally in Canada under the Income Tax Act (Canada) (the “Federal Act”) and in Saskatchewan under The Income Tax Act, 2000 (the “Saskatchewan Act”) and which are applicable to a holder of the debt securities who, at all relevant times, for the purposes of the Federal Act and any applicable income tax convention, is not a resident of Canada and is not deemed to be a resident of Canada and who does not use or hold and is not deemed to use or hold the debt securities in or in the course of carrying on a business in Canada and is not an insurer carrying on an insurance business in Canada and elsewhere and is not an authorized foreign bank carrying on a banking business in Canada within the meaning of the Federal Act (a “Non-Resident Holder”). This Canadian Tax Summary is based on the provisions of the Federal Act, the Saskatchewan Act and regulations under those Acts as they exist on the date of this prospectus, proposed amendments thereto and the current administrative practices and policies published by the Canada Revenue Agency.

This Canadian Tax Summary includes Canadian and Saskatchewan income tax considerations only. It does not include United States, provincial (other than Saskatchewan), territorial or other income tax considerations nor does it include income tax considerations arising under any income tax convention or treaty between Canada and another country. It is not applicable to Canadian residents. No assurances can be given that changes in the law or administrative practices or future court decisions will not affect the tax treatment of a holder.

Neither principal nor interest paid or credited by the Province to a Non-Resident Holder in respect of the debt securities is subject to withholding tax under the Federal Act or the Saskatchewan Act.

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No other tax on income or capital gains is payable by a Non-Resident Holder under the Federal Act or the Saskatchewan Act in respect of the debt securities, whether as a result of interest or principal being paid or credited by the Province to the Non-Resident Holder, a purchase by the Province from, or repayment by the Province to, the Non-Resident Holder, a redemption or other disposition.

In certain circumstances described under the heading “Description of Debt Securities— Registered Global Securities—Special Situations When the Global Security Will be Terminated”, a global security representing debt securities will terminate and interests in it will be exchanged for physical certificates representing debt securities. No tax on income or capital gains is payable under the Federal Act or the Saskatchewan Act as a result of any such exchange.

Canada and Saskatchewan do not levy estate or inheritance taxes or succession duties. Saskatchewan requires a probate fee to be paid upon estates probated in Saskatchewan, calculated on the value of the estate. The estate of a person who was not ordinarily resident or domiciled in Saskatchewan on death would not, by virtue only of the holding of debt securities by the estate, be required by law to be probated in Saskatchewan.

The above summary does not discuss all aspects of Canadian income taxation that may be relevant to you in light of your particular circumstances and income tax situation. You should consult with your own tax advisor as to the specific tax consequences that would result from your ownership and disposition of the debt securities, including the application and effect of provincial, local, foreign and other tax laws and the possible effects of changes in federal or other tax laws.

United States Income Tax Considerations

The following is a summary of the material United States federal income tax consequences of the ownership and disposition of U.S. dollar denominated debt securities to U.S. Holders (as defined below) that acquire debt securities at original issuance at their “issue price” and hold such debt securities as capital assets within the meaning of section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This discussion is limited to debt securities whose “stated redemption price at maturity” does not, within the meaning of section 1273 of the Code, exceed their “issue price” by more than a de minimis amount. Tax consequences of debt securities with different terms will be addressed in the prospectus supplement. This summary is based on the Code, existing and proposed Treasury regulations promulgated under the Code, and administrative and judicial interpretations of the Code and those regulations (all as of the date of this prospectus and all of which are subject to change, possibly with retroactive effect). We have not requested, and will not request, a ruling from the United States Internal Revenue Service (the “IRS”) with respect to any of the United States federal income tax consequences described below, and as a result there can be no assurance that the IRS will not disagree with or challenge any of the conclusions described herein.

This summary does not discuss all of the tax consequences that may be relevant to prospective purchasers in light of their particular circumstances or to prospective purchasers subject to special rules, such as banks, financial institutions, insurance companies, tax-exempt organizations, dealers in securities or foreign currencies, persons who will hold debt securities as part of a hedging transaction, “straddle,” conversion transaction, or other integrated transaction, persons who use or are required to use mark-to-market accounting, persons who are subject to the alternative minimum tax, certain former citizens or residents of the United States, or persons whose functional currency (as defined in section 985 of the Code) is not the U.S. dollar. You should consult with your own tax advisors about the application of United States federal income tax law to your particular situation as well as any tax consequences arising under the federal estate and gift tax laws and the tax laws of any state, local or foreign jurisdiction.

For purposes of this summary, you are a U.S. Holder if, for United States federal income tax purposes, you are a beneficial owner of a debt security and either:

• You are a citizen of the United States or a resident of the United States who is a natural person;

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• You are a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States or of any political subdivision of the United States;

• You are an estate, and your income is subject to United States federal income taxation regardless of its source; or

• You are a trust, and (i) both a United States court is able to exercise primary supervision over your administration, and one or more United States persons have the authority to control all of your substantial decisions, or (ii) you have a valid election in effect under applicable Treasury regulations to be treated as a United States person.

If a partnership or other pass-through entity holds a debt security, the United States federal income tax treatment of a partner (or other owner) generally will depend upon the status of the partner (or other owner) and upon the activities of the partnership (or other pass-through entity). Partners or owners of partnerships or other pass-through entities holding a debt security should consult their tax advisors.

Interest

In general, you will be required to include payments of stated interest on the debt securities in your gross income as ordinary income at the time the interest is accrued or received in accordance with your method of accounting for United States federal income tax purposes. In general, any Canadian withholding tax imposed on interest payments in respect of the debt securities will be treated as a foreign income tax eligible for credit against a U.S. Holder’s United States federal income tax liability (or, at a U.S. Holder’s election, may, in certain circumstances, be deducted in computing taxable income). This interest will be foreign source income for foreign tax credit purposes and generally will be “passive category” income, but could, in certain circumstances, be “general category” income. The Code applies various complex limitations on the amount of foreign taxes that may be claimed as a credit. U.S. Holders are urged to consult their own tax advisors with respect to the amount of foreign taxes that can be claimed as a credit.

Sale, Exchange, Retirement or Other Taxable Disposition

Upon the sale, exchange, retirement or other taxable disposition of a debt security, you generally will recognize capital gain or loss equal to the difference between the amount realized on the sale, exchange, retirement or other taxable disposition (not including any amounts attributable to accrued but unpaid interest, which, unless you have previously included the interest in income, will be taxable to you as such) and your adjusted tax basis in the debt security. Your adjusted basis in a debt security generally will be the amount you paid to purchase the debt security. Your gain or loss will generally be a long-term capital gain or loss if you have held the debt security for more than one year. Non-corporate U.S. Holders, including individuals, generally are eligible for a reduced rate of taxation on long-term capital gain. The deduction of capital losses is subject to limitations under the Code. Your gain or loss generally will be U.S. source for foreign tax credit purposes.

Medicare Tax

Certain U.S. Holders that are individuals, estates or trusts are subject to a 3.8% tax on the lesser of (1) the U.S. Holder’s “net investment income” for the relevant taxable year and (2) the excess of the U.S. Holder’s modified adjusted gross income for the taxable year over a certain threshold. A U.S. Holder’s net investment income will generally include its interest income and its net gains from the disposition of debt securities, unless such interest income or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). If you are a U.S. Holder that is an individual, estate or trust, you are urged to consult your tax advisor regarding the applicability of the Medicare tax to your income and gains in respect of your investment in the debt securities.

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Backup Withholding and Information Reporting

Certain backup withholding and information reporting requirements may apply to payments on the debt securities and to proceeds of the sale, exchange, retirement or other taxable disposition of the debt securities. In general, information reporting will apply to payments made through a U.S. paying agent or U.S. intermediary to a U.S. Holder. In the event that a U.S. Holder fails to file any such required form, the U.S. Holder could be subject to significant penalties. The Province, its agent, a broker, the relevant trustee or any paying agent, as the case may be, may withhold amounts from any of the payments to you if you do not furnish your taxpayer identification number (social security number or employer identification number), if you do not certify that you are not subject to backup withholding, or if you otherwise do not comply with the applicable requirements of the backup withholding rules. Certain U.S. Holders (including, among others, corporations) generally are not subject to the foregoing backup withholding and information reporting requirements.

Any amounts withheld under the backup withholding rules from a payment to you would be allowed as a credit against your United States federal income tax liability, and may entitle you to a refund, provided that the required information is furnished to the IRS. U.S. Holders are urged to consult their own tax advisors regarding the information reporting and backup withholding tax rules.

Certain U.S. Holders who are individuals that hold certain “specified foreign financial assets” (which may include the debt securities) with an aggregate value in excess of certain thresholds are required to report information relating to such assets, subject to certain exceptions. U.S. Holders should consult their tax advisors regarding the effect, if any, of these requirements on their ownership and disposition of the debt securities.

The above summary does not discuss all aspects of United States federal income taxation that may be relevant to you in light of your particular circumstances and income tax situation. You should consult with your own tax advisor as to the specific tax consequences that would result from your ownership and disposition of the debt securities, including the application and effect of state, local, foreign and other tax laws and the possible effects of changes in federal or other tax laws.

Enforceability and Governing Law

We have not agreed to waive any immunity from the jurisdiction of the courts of the United States nor have we appointed an agent in the United States upon which process may be served. As a result, you may not be able to sue us in a United States court or enforce a judgment against us if granted by a United States court.

However, you may bring proceedings against us in the Saskatchewan courts for matters arising under the debt securities. You may do so whether or not you are a resident of Saskatchewan or a citizen of Canada and without any need to obtain the consent of any public official or authority. A lawsuit against us in the Saskatchewan courts will be governed by The Proceedings Against the Crown Act, 2019 (Saskatchewan), which, for example, makes the remedies of specific performance and injunctions unavailable against us and prohibits jury trials in proceedings against us. Proceedings against us in the Saskatchewan courts must be brought prior to the expiry of the applicable limitation period (generally two years).

Although any order obtained in an action brought in the Saskatchewan courts against the Province may not be enforced by execution, seizure or attachment, The Proceedings Against the Crown Act, 2019 further provides that upon receipt of a certificate of the proper officer of the court, in the event of a judgment against Saskatchewan from which no appeal is taken, the Minister of Finance shall pay out of the General Revenue Fund to the person entitled, or to his order, the amount due including costs, if any, together with interest, if any, lawfully due thereon.

Further, in the absence of a waiver of immunity by the Province, it would be possible to obtain a United States judgment in an action against the Province only if a court were to determine that the United States Foreign Sovereign Immunity Act of 1976 (the “Foreign Sovereign Immunity Act”) precludes the granting of sovereign immunity.

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However, even if a United States judgment could be obtained in any such action under the Foreign Sovereign Immunity Act, it may not be possible to obtain in Canada a judgment based on such a United States judgment. Moreover, execution upon property of the Province located in the United States to enforce a judgment obtained under the Foreign Sovereign Immunity Act may not be possible except under limited specified circumstances.

Unless otherwise provided in the applicable prospectus supplement, the debt securities and the fiscal agency agreement, if any, will be governed by the laws of Saskatchewan and the laws of Canada applicable in Saskatchewan.

PLAN OF DISTRIBUTION

The Province may sell debt securities to the public:

• through underwriters or dealers;

• directly to purchasers; or

• through agents.

The prospectus supplement with respect to each series of debt securities will set forth the terms of the offering of that series of debt securities, including the name or names of any underwriters, dealers or agents, the purchase price or prices of the debt securities, the proceeds to the Province from the sale of the debt securities, any underwriting discounts and other items constituting underwriters’ or agents’ compensation, any initial public offering price and any discounts, concessions or commissions allowed or reallowed or paid by any underwriter to other dealers. Any initial public offering price and any discounts, concessions or commissions allowed or reallowed or paid to dealers may be changed from time to time.

We may distribute debt securities from time to time in one or more transactions:

• at a fixed price or prices, which may change;

• at market prices prevailing at the time of sale;

• at prices related to such prevailing market prices; or

• at prices to be negotiated with purchasers.

Debt securities may be sold through agents designated by us. The agents will solicit offers by institutions to purchase the offered debt securities directly from the Province, pursuant to contracts providing for payment and delivery on a future date. The applicable prospectus supplement will set forth the commission we will pay to the agents and any conditions to the contracts. Unless otherwise indicated in the applicable prospectus supplement, any such agent will be acting on a best efforts basis for the period of its appointment and will not be acquiring such debt securities for its own account. The applicable prospectus supplement will also set forth whether underwriters will be obligated to purchase all of the debt securities offered thereby if any are purchased.

In connection with the sale of debt securities, the Province, or purchasers of debt securities for whom the underwriters may act as agents, may compensate the underwriters in the form of discounts, concessions or commissions. Underwriters, dealers and agents that participate in the distribution of debt securities may be deemed to be underwriters and any discount or commissions received by them from the Province, and any profit on the resale of debt securities by them, may be deemed to be underwriting discounts and commissions under the Securities Act of 1933, as amended (the “Securities Act”). The prospectus supplement will identify any underwriters with respect to the debt securities.

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We may enter into agreements to indemnify underwriters, dealers and agents who participate in the distribution of debt securities against certain liabilities, including liabilities under the Securities Act, or to provide contribution with respect to payments which the underwriters, dealers or agents may be required to make in respect thereof.

DEBT RECORD

In the last 20 years, the Province has not defaulted on any of its direct or guaranteed debt obligations. During such period, payments have been made when due.

AUTHORIZED AGENT

The authorized agent of the Province in the United States is Khawar Nasim, whose address is:

Consulate General of Canada

466 Lexington Avenue, 20th Floor

New York, New York 10017

EXPERTS AND PUBLIC OFFICIAL DOCUMENTS

Information included in this prospectus, which is designated as being taken from a publication of the Province of Saskatchewan, or any agency or instrumentality of either, is included herein upon the authority of such publication as a public official document.

All financial and statistical information of the Province included in this prospectus has been taken or derived from records and publications of the Province, and is included in this prospectus on the authority of Rodney N. Balkwill, Executive Director, Treasury Management Branch.

LEGAL MATTERS

Unless otherwise indicated in the prospectus supplement, the legality of each series of debt securities offered by this prospectus, and certain other matters of Canadian and Saskatchewan law, will be passed upon by McDougall Gauley LLP.

Certain matters of United States law in connection with the offering of the debt securities will be passed upon by Paul, Weiss, Rifkind, Wharton & Garrison LLP, United States counsel to the Province.

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ANNEX A— PUBLIC ACCOUNTS 2020-21 VOLUME 1

See attached.

A-1

Public Accounts 2020-21 Volume 1 Summary Financial Statements

Contents

3	Letters of Transmittal
4	Introduction to the Public Accounts
Financial Statement Discussion and Analysis
7	Highlights
13	Assessment of Fiscal Health
18	Details
37	Risks and Uncertainties
Summary Financial Statements
41	Responsibility for the Summary Financial Statements
43	Independent Auditor’s Report
45	Statement of Financial Position
46	Statement of Operations
47	Statement of Accumulated Deficit
47	Statement of Change in Net Debt
48	Statement of Cash Flow
49	Notes to the Financial Statements
	Schedules to the Financial Statements
63	Accounts Receivable
63	Loans Receivable
64	Investment in Government Business Enterprises
67	Other Investments
68	Accounts Payable and Accrued Liabilities
68	Unearned Revenue
69	Pension Liabilities
70	Public Debt
72	Sinking Funds
73	Obligations Under Long-Term Financing Arrangements
74	Other Liabilities
75	Tangible Capital Assets
76	Revenue
77	Expense by Object
77	Financing Charges
78	Segmented Reporting
80	Supplemental Cash Flow Information
81	Government Reporting Entity
84	Glossary of Terms

Letters of Transmittal

Regina, Saskatchewan

June 2021

To His Honour

The Honourable Russell B. Mirasty

Lieutenant Governor of Saskatchewan

Your Honour:

I have the honour to submit Volume 1 of the Public Accounts of the Government of Saskatchewan for the fiscal year ended March 31, 2021.

Respectfully submitted,

DONNA HARPAUER

Deputy Premier and

Minister of Finance

Regina, Saskatchewan

June 2021

The Honourable Donna Harpauer

Deputy Premier and

Minister of Finance

We have the honour to present Volume 1 of the Public Accounts of the Government of Saskatchewan for the fiscal year ended March 31, 2021.

Respectfully submitted,

RUPEN PANDYA	TERRY PATON
Deputy Minister of Finance	Provincial Comptroller

Government of Saskatchewan Public Accounts 2020-21  3

Introduction to the Public Accounts

Introduction to the Public Accounts

The 2020-21 Public Accounts of the Government of Saskatchewan (the Government) are prepared in accordance with the Financial Administration Act, 1993 and consist of two volumes. The Government is responsible for the integrity and objectivity of the information presented in these two volumes.

Volume 1

Financial Statement Discussion and Analysis provides users of the Government’s Summary Financial Statements with an overview of the Government’s performance by presenting comparative financial highlights and variance analysis. The information in the financial statement discussion and analysis should be read in conjunction with the Summary Financial Statements.

Summary Financial Statements provide an accounting of the full nature and extent of the financial affairs and resources of the Government. This includes the financial results of the General Revenue Fund, Crown corporations, boards and other entities controlled by the Government. A listing of all entities controlled by the Government, collectively referred to as the government reporting entity, is provided in schedule 18 of the Summary Financial Statements.

Volume 2

Volume 2 contains the following unaudited financial information:

• General Revenue Fund schedules and details;

• General Revenue Fund capital asset acquisitions schedule and details;

• revolving fund expenditure details;

• summary listing of payees who provided goods and services and capital assets of $50,000 or more to the General Revenue Fund and revolving funds during the fiscal year;

• assets, liabilities and residual balances of pension plans and trust funds administered by the Government;

• remissions of taxes and fees; and

• road-use fuel tax accountability revenues and expenditures.

The Public Accounts, including the Compendiums, are available on the Government of Saskatchewan’s website.

The Compendium of Financial Statements contains the financial statements of various government agencies, boards, commissions, pension plans, special purpose funds and institutions, as well as Crown corporations which are accountable to Treasury Board.

The Compendium of Payee Details contains the payee details of all Summary Financial Statement entities, except Crown Investments Corporation of Saskatchewan and its subsidiaries.

In addition, the financial statements and payee details of Crown corporations and wholly-owned subsidiaries that are accountable to the Crown Investments Corporation of Saskatchewan (CIC) Board can be found on CIC’s website.

4  Government of Saskatchewan Public Accounts 2020-21

Financial Statement Discussion and Analysis

Financial Statement Discussion and Analysis

Financial Statement Discussion and Analysis

Highlights

Introduction

The Financial Statement Discussion and Analysis (FSD&A) provides an overview of the Government’s financial performance and information to report on the Government’s accountability for the resources entrusted to it. The FSD&A is intended to assist users of the Summary Financial Statements (SFS) in their assessment of the Government’s fiscal health. The Government is responsible for the integrity and objectivity of this discussion and analysis.

This information should be read in conjunction with the SFS which include the financial activities of all government-controlled entities, collectively referred to as the government reporting entity. A complete listing of the public sector entities included in the government reporting entity is provided in schedule 18 of the SFS.

Financial Results

The COVID-19 pandemic has significantly impacted the Government’s fiscal results for the year ended March 31, 2021, the first full year operating in a COVID-19 environment since the global pandemic was declared. This impact is attributed to the negative impact that the pandemic has had on the economy, the cost of health and safety measures taken and the provision of financial support. The Government reported a deficit of $1.13 billion, $808 million greater than the prior-year deficit but $1.30 billion less than budgeted.

Revenue was $363 million less than the prior year, largely due to significant decreases in taxation and non-renewable resources revenue as a result of the COVID-19 pandemic. A decline in economic activity and the public health restrictions caused a deterioration in consumption, corporation income and individual income taxes. Decreases in global commodity prices resulted in lower non-renewable resource revenue. These decreases were partially offset by an increase in net income from Government Business Enterprises (GBEs) and COVID-related increases in transfers from the federal government. Compared to budget, revenue was $875 million greater than expected due to favorable variances in net income from GBEs and transfers from the federal government. There was also higher-than-budgeted consumption tax revenue, oil and natural gas revenue and forestry fees, primarily due to higher-than-expected prices and demand. These favorable variances were partially offset by lower-than-expected corporate and individual income tax revenue and declines in potash and other non-renewable resource revenue.

Expenses for the year were $444 million greater than the prior year, primarily due to COVID-related health and safety spending and financial support programs provided by the Government. These increases were partially offset by a decrease in pension expense, primarily due to changes in actuarial assumptions, and decreases in crop insurance claims resulting from favorable crop conditions. Expenses were $424 million lower than budget, largely due to lower-than-budgeted crop insurance claims, partially offset by unbudgeted COVID-related expenses.

The Government continued to invest in the Province’s infrastructure, with significant investment in electricity generation, transmission and distribution assets, in communication networks as well as in investments through the Saskatchewan Capital Plan. The $2.47 billion capital investment during 2020-21 will provide stimulus funding to strengthen the economy, help the Government meet the challenges of a growing province and improve safety.

The Government’s overall financial position as at March 31, 2021 is an accumulated deficit of $1.37 billion.

Government of Saskatchewan Public Accounts 2020-21  7

Financial Statement Discussion and Analysis

Highlights

At a Glance

Financial Results

(millions of dollars)

										Increase (Decrease)
	2021						2020			from
													2020
	Budget			Actual			Actual			Budget			Actual
Revenue		13,649			14,524			14,887			875			(363	)
Expense		16,075			15,651			15,206			(424	)		444
Deficit		(2,426	)		(1,127	)		(319	)		(1,299	)		808
Net Debt		(15,122	)		(13,683	)		(12,289	)		(1,439	)		1,394
Accumulated Deficit		(2,617	)		(1,368	)		(191	)		(1,250	)		1,176

Totals may not add due to rounding.

8  Government of Saskatchewan Public Accounts 2020-21

Financial Statement Discussion and Analysis

Highlights

(Deficit) Surplus

The (deficit) surplus represents the amount by which (expense exceeds revenue) revenue exceeds expense for the fiscal period.

The 2020-21 SFS report a deficit of $1.13 billion, a $808 million increase over the $319 million deficit reported in the previous year. The year-over-year increase in deficit is mainly attributable to an overall increase in expenses and an overall decrease in revenues. Notable increases in expenses were experienced in the health, economic development and community development themes, partially offset by decreases in the education, general government and agriculture themes. Notable decreases in revenue include taxation and non-renewable resources revenue partially offset by increases in transfers from the federal government and net income from government business enterprises (GBEs).   Compared to the budget, the deficit is $1.30 billion lower than expected. The improvement over budget is mainly attributable to higher-than-budgeted revenue and lower-than-budgeted expenses. All revenue categories were greater-than-budgeted except for taxation. Lower-than-budgeted agriculture, environment and natural resources and education expenses were partially offset by greater-than-budgeted health expenses.

Accumulated (Deficit) Surplus

An accumulated (deficit) surplus represents the government’s reported net economic (shortfall) resources. An accumulated (deficit) surplus indicates that a government (requires) has additional resources to provide future services.

  At March 31, 2021, the Government reported an accumulated deficit of $1.37 billion, a $1.18 billion increase from the previous year’s accumulated deficit. The accumulated deficit is $1.25 billion lower than budgeted. The increase over the prior year was mainly due to the $1.13 billion deficit. The decrease from budget was mainly the result of the lower-than-budgeted deficit.

Government of Saskatchewan Public Accounts 2020-21  9

Financial Statement Discussion and Analysis

Highlights

Net Debt

Net debt provides a measure of the future revenue that is required to pay for past transactions and events.

The net debt reported in the SFS at March 31, 2021 is $13.68 billion, an increase of $1.39 billion over the prior year. The year-over-year increase in net debt is primarily due to the deficit reported in the current year.   Net debt is $1.44 billion less than budgeted, primarily due to the lower-than-expected deficit reported in the current year.

The net debt of the SFS is:

• the accumulated (deficit) surplus, representing the extent to which past (expenses) revenues have exceeded past (revenue) expenses; and

• the investment in non-financial assets, primarily representing the Government’s investment in highways and educational and health care facilities.

 Net Debt Components

(millions of dollars)
	2012			2013			2014			2015			2016			2017			2018			2019			2020			2021
Accumulated (deficit) surplus		2,617			2,449			3,469			3,074			1,495			372			176			155			(191	)		(1,368	)
Investment in non-financial assets		(7,161	)		(7,558	)		(8,085	)		(8,626	)		(9,394	)		(10,564	)		(11,464	)		(11,984	)		(12,098	)		(12,315	)
Net Debt		(4,543	)		(5,109	)		(4,615	)		(5,552	)		(7,899	)		(10,192	)		(11,288	)		(11,829	)		(12,289	)		(13,683	)

Totals may not add due to rounding.

10  Government of Saskatchewan Public Accounts 2020-21

Financial Statement Discussion and Analysis

Highlights

Investment in Infrastructure

The Government invests in infrastructure by:

• investing in government-owned capital; and

• providing transfers to third parties, including municipalities and universities, for capital purposes.

  During 2020-21, the Government invested $2.04 billion in government-owned infrastructure: $1.20 billion for government business enterprises (GBEs) to build new and maintain existing infrastructure; and $837 million to meet the capital requirements of government service organizations (GSOs). In addition, $426 million was provided to third parties to fund their capital needs.   Investment in government-owned infrastructure was down from the average of the previous nine years of $2.83 billion and was $725 million less than budgeted.

Impact of COVID-19 Pandemic

The COVID-19 pandemic has significantly impacted the Government’s fiscal results for the year ended March 31, 2021, the first full year operating in a COVID-19 environment since the global pandemic was declared. This impact is attributed to the negative impact that the pandemic has had on the economy, the cost of health and safety measures taken and the provision of financial support.

The negative impact the pandemic has had on the economy had the greatest impact on the Province’s fiscal results and includes:

• a decline in revenue, notably taxation and non-renewable resources; and

• stimulus spending in the form of infrastructure funding, rebates and tax credits to aid economic recovery.

Health and safety measures, with assistance from the federal government, were implemented. The measures taken:

• provided testing and contact tracing;

• supplied personal protective equipment;

• delivered vaccines;

• addressed health care system capacity shortages;

• provided support for a safe return to classrooms;

• controlled and prevented infections in vulnerable populations;

• supported municipalities in their response to COVID-19; and

• imposed public health orders and closures.

Financial support programs were delivered to sectors most impacted by pandemic-related public health orders and closures, including the:

• Saskatchewan small business emergency payment program;

• emergency pandemic response gaming partner grants;

• small business tax rate reduction;

• Saskatchewan tourism sector support program;

• oil and gas sector tax relief; and

• self-isolation support program.

Government of Saskatchewan Public Accounts 2020-21  11

Financial Statement Discussion and Analysis

Highlights

Impact of COVID-19 Pandemic (continued)

Financial support programs, with assistance from the federal government, were delivered including the:

• Saskatchewan temporary wage supplement program; and

• Canada emergency commercial rent assistance.

The unprecedented and evolving nature of the COVID-19 pandemic continues to provide a level of uncertainty in the Government’s financial position and operating results.

Credit Rating

Credit Ratings – March 2021				The Province obtains a credit rating from the three major credit rating agencies: Moody’s Investors Service Inc.; Standard & Poor’s; and the DBRS Morningstar. Overall, Saskatchewan’s credit rating from the three major credit rating agencies ranks second highest among the Canadian provinces.
	Rating Agency1
Jurisdiction	Moody’s Investors Service Inc.	Standard & Poor’s	DBRS Morningstar
British Columbia	Aaa	AAA (neg)	AA (high)
Alberta	Aa3	A+ (neg)	AA (low) (neg)
Saskatchewan	Aaa (neg)	AA	AA (low)
Manitoba	Aa2	A+	A (high)
Ontario	Aa3	A+	AA (low)
Quebec	Aa2	AA-	AA (low)
New Brunswick	Aa2	A+	A (high)
Nova Scotia	Aa2	AA-	A (high)
Prince Edward Island	Aa2	A	A
Newfoundland & Labrador	A1 (neg)	A (neg)	A (low) (neg)
Ratings reflect the latest credit ratings available at March 31, 2021.

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

12  Government of Saskatchewan Public Accounts 2020-21

Financial Statement Discussion and Analysis

Assessment of Fiscal Health

A government’s fiscal management can be gauged through an assessment of its fiscal health in the context of the overall economic and financial environment. Fiscal health describes a government’s ability to meet its existing financial obligations, both with respect to its service commitments to the public and its financial commitments to creditors, employees and others. The assessment of the Government’s fiscal health considers the three elements of sustainability, flexibility and vulnerability on the basis of the following indicators:

Sustainability

• Accumulated (deficit) surplus to the Province’s GDP

• Net debt to the Province’s GDP

• Net debt to total revenue

• Net debt per capita

Flexibility

• Financing charges to total revenue

• Own-source revenue to the Province’s GDP

Vulnerability

• Non-renewable resources revenue to total expense

• Transfers from the federal government to total revenue

• Foreign currency debt to net debt

Sustainability

Sustainability is the degree to which a government can maintain its existing level of spending and meet its existing debt obligations.

The relatively stable ratio from 2011-12 to 2014-15 indicates the Government’s overall fiscal policies over this period matched the rate of economic growth in the Province. The decrease in this ratio in 2015-16 and 2016-17 is mainly a result of market-driven variables, such as low oil prices. The return to relatively stable ratios from 2017-18 to 2019-20 reflects the revenue stability and cost control measures introduced in the 2017-18 budget. A decline in this ratio in 2020-21 is primarily due to the adverse effect of the COVID-19 pandemic on government operations and the economy, negatively impacting both the accumulated deficit and the Province’s GDP.

The accumulated (deficit) surplus measures the sum of all current and prior years’ operating results. Gross domestic product (GDP) is a measure of the value of the goods and services produced during a year, indicating the size of the provincial economy. GDP reflects the latest figures available for the current and prior years based on the data produced by Statistics Canada. The indicator takes a long-term view of government finances. The trend of accumulated (deficit) surplus as a percentage of GDP indicates whether the accumulated (deficit) surplus is changing faster or slower than the growth or decline in the economy and provides insight into the Government’s fiscal strategy in the context of the economy.

Government of Saskatchewan Public Accounts 2020-21  13

Financial Statement Discussion and Analysis

Assessment of Fiscal Health

Sustainability (continued)

  Net debt is the difference between a government’s financial assets and liabilities and represents the future revenue that is required to pay for past transactions and events. Net debt as a percentage of the Province’s GDP provides a measure of the level of financial demands placed on the economy by the Government’s spending and taxation policies. A lower net debt to GDP ratio is desired and indicates higher sustainability. The relatively stable ratio from 2011-12 to 2014-15 indicates the Government’s overall fiscal policies over this period of time were sustainable to the extent that the rate of economic growth in the Province matched the growth in net debt. The rise in this ratio in 2015-16 and 2016-17 is mainly a result of market-driven variables, such as low oil prices, together with the Government’s continued investment in infrastructure. The return to relatively stable ratios from 2017-18 to 2019-20 reflects the revenue stability measures introduced in the 2017-18 budget and a strengthening provincial economy over this period of time. A rise in this ratio in 2020-21 is primarily due to the adverse effect of the COVID-19 pandemic on government operations and the economy, negatively impacting both net debt and the Province’s GDP.

  Another measure of a government’s sustainability is net debt as a percentage of total revenue. Net debt provides a measure of the future revenue that is required to pay for past transactions and events. A lower net debt to revenue ratio indicates higher sustainability, as less time is required to eliminate net debt. Over the last ten years, the Government’s net debt as a percentage of total revenue has increased from 33.4 per cent in 2011-12 to 94.2 per cent in 2020-21. The overall increase in this ratio during this period is primarily the result of the Government’s significant investment in capital. The fall in revenue tied to low oil and potash prices in 2015-16 and 2016-17 increased this upward trend, however, responsible spending, efforts to reduce reliance on non-renewable resource revenues as well as more favorable resource revenues has slowed this upward trend in recent years. A rise in this ratio in 2020-21 is primarily due the adverse effect of the COVID-19 pandemic on government operations and the economy, negatively impacting both net debt and total revenues.

14  Government of Saskatchewan Public Accounts 2020-21

Financial Statement Discussion and Analysis

Assessment of Fiscal Health

Sustainability (continued)

  Net debt per capita represents the net debt attributable to each Saskatchewan resident. An increase in this ratio indicates the debt burden per resident has grown. The overall increase in this ratio over the last ten years is a result of an increase in net debt that exceeds the growth in the Province’s population over the same period. The rise in this ratio from 2014-15 to 2016-17 indicates that the annual increase in the Province’s population in those years was proportionately lower than the increase in net debt over the same period. The $4.64 billion increase in net debt over this period was mainly a result of market-driven variables, such as low oil prices, together with the Government’s investment in infrastructure. The return to relatively stable ratios from 2017-18 to 2019-20 reflects the revenue stability measures introduced in the 2017-18 budget and a strengthening provincial economy over much this period. A rise in this ratio in 2020-21 is primarily due to the adverse effect of the COVID-19 pandemic on government operations and the economy, negatively impacting net debt.

Flexibility

Flexibility is the extent to which a government has room to manoeuver in terms of increasing its debt or tax burden on the economy.

  A financing charges to total revenue ratio, often referred to as the interest bite, indicates the proportion of provincial revenue that is required to pay interest charges on general debt and therefore is not available to pay for essential public services and programs. A lower ratio means that there is more money available to provide government services. Between 2011-12 and 2019-20, there was an overall decrease in the interest bite mainly due to increased revenue. A rise in this ratio in 2020-21 is due to both an increase in interest costs and a decrease in total revenue. Interest costs in the current year have increased primarily due to COVID-related borrowing. Total revenue has decreased primarily due to the adverse impact of the COVID-19 pandemic on the provincial economy. In 2020-21, the Government spent approximately 5.0 cents of each dollar of revenue on financing charges on general debt.

Government of Saskatchewan Public Accounts 2020-21  15

Financial Statement Discussion and Analysis

Assessment of Fiscal Health

Flexibility (continued)

  This ratio measures the extent to which the Government is taking income out of the provincial economy, through taxation, non-renewable resources revenue or user fees. An increase in this ratio indicates that the Government’s own-source revenue is growing faster than the economy, reducing the Government’s flexibility to increase revenue without slowing the growth of the provincial economy. Own source revenue as a percentage of GDP has remained relatively constant over the last ten years indicating that the Government has not significantly changed its demands on the provincial economy over this time. This ratio is almost constant, which indicates that the Government’s flexibility is relatively unchanged over the last ten years.

Vulnerability

Vulnerability is the extent to which a government is dependent on, or exposed to, risks associated with sources of funding outside its control.

  Non-renewable resources revenue is affected by price and sales factors which are beyond a government’s direct control. Non-renewable resources revenue as a percentage of total expense is therefore an indicator of how vulnerable the Province is as a result of its dependence on non-renewable resources revenue to fund its expenses. In Saskatchewan, non-renewable resources revenue is an important but volatile source of revenue. A higher than normal non-renewable resources revenue to total expense ratio typically means that there has been a windfall in non-renewable resources revenue, where prices and/or sales are at above-normal levels. Likewise, when the ratio is lower than normal, it typically represents a period of reduced prices or sales.   The overall increase in the indicator from 2016-17 to 2019-20 is a result of strengthening non-renewable resource revenue and favorable crop insurance claims and pension adjustments. A decline in this ratio in 2020-21 is primarily due to the adverse effect of the COVID-19 pandemic on the economy and government operations. The pandemic negatively impacted non-renewable resources revenue and resulted in an increase in total expenses.

16  Government of Saskatchewan Public Accounts 2020-21

Financial Statement Discussion and Analysis

Assessment of Fiscal Health

Vulnerability (continued)

	In 2020-21, 21.6 per cent of the Government’s revenue came from transfers from the federal government with the remainder coming from Saskatchewan sources. Between 2011-12 and 2019-20, the Government’s ability to fund essential programs and services from own-source revenue has remained fairly stable with the exception of significant one-time infrastructure transfers from the federal government received during 2016-17. An increase in this ratio in 2020-21 is primarily due to the adverse impact of the COVID-19 pandemic on the economy and the resulting support received from the federal government.
The Government does not control the amount of federal transfers that it receives each year. Transfers from the federal government as a percentage of total revenue is therefore an indicator of the degree of vulnerability the Government has as a result of reliance on the federal government for revenue. Generally, a decreasing ratio indicates that a government is less reliant on federal transfers to fund its programs, making it less vulnerable.
Foreign Currency Debt to Net Debt
The ratio of foreign currency debt to net debt is an indicator of the degree of vulnerability a government has to currency rate fluctuations. Where the Government holds debt that is issued in foreign currencies it often uses cross-currency swaps, a hedging strategy, to effectively convert this debt to Canadian dollar debt. At March 31, 2021, this ratio is nil due to the Government’s hedging strategies. Over the last ten years, exposure to currency rate fluctuations on foreign currency debt has been minimal. Decreasing this exposure through the use of hedging activities mitigates the risk of debt and financing charges changing due to changes in foreign currency rates.

Government of Saskatchewan Public Accounts 2020-21  17

Financial Statement Discussion and Analysis

Details

Revenue

Total revenue was $14.52 billion in 2020-21, 21.6 per cent of which represents transfers from the federal government and the remaining 78.4 per cent own-source revenue.

*  In 2020-21, key components of “other own-source revenue” include fees (8%), insurance (2%), investment income (1%), and transfers from other governments (1%).

18  Government of Saskatchewan Public Accounts 2020-21

Financial Statement Discussion and Analysis

Details

Revenue (continued)

  *  In 2021 Actual, key components of “other own-source revenue” include fees ($1.18 billion), insurance ($274 million), investment income ($151 million), and transfers from other governments ($82 million). Total revenue of $14.52 billion in 2020-21 represents a year-over-year decrease of $363 million, or 2.4 per cent. This decrease was a result of significant decreases in taxation and non-renewable resources revenue, partially offset by increases in transfers from the federal government and net income from Government Business Enterprises (GBEs).   Revenue was greater than budget by $875 million, or 6.4 per cent. There was an increase over budget in all but taxation revenue, with the most notable increases in net income from GBEs and transfers from the federal government.

Government of Saskatchewan Public Accounts 2020-21  19

Financial Statement Discussion and Analysis

Details

Revenue (continued)

  *  In 2021 Actual, key components of “other” include corporation income ($440 million) and tobacco ($204 million). Taxation revenue was $6.88 billion in 2020-21, a decrease of $671 million, or 8.9 per cent, from 2019-20 and $321 million, or 4.5 per cent, from budget. The $671 million decrease from prior year was largely due to a decrease in corporation and individual income taxes, provincial sales tax and fuel tax. The $321 million budget shortfall is largely attributable to lower-than-expected corporation and individual income taxes, partially offset by greater-than-expected provincial sales tax revenue.

Individual income tax

The year-over-year and actual-to-budget decreases are primarily due to:

• a deterioration in prior-year adjustment payments due to lower prior-year assessments; and

• a decrease in current-year payments partly due to the October 2020 implementation of the Saskatchewan Home Renovation Tax Credit

Provincial sales tax

The year-over-year decrease is primarily due to:

• a COVID-related deterioration in the sales tax base reflecting a decline in economic activity; and

• a first-time reduction of sales tax on tangible capital asset acquisitions of certain public sector entities.

The actual-to-budget increase is primarily due to:

• higher-than-budgeted retail sales activity, partially offset by;

• an unbudgeted reduction of sales tax on tangible asset acquisitions of certain public sector entities.

Property tax

The year-over-year and actual-to-budget increases are primarily due to:

• an increase in the property tax base.

Fuel tax

The year-over-year decrease is primarily due to:

• a decline in consumption, particularly gasoline and diesel.

The decrease from budget is nominal.

Other tax (including corporation income, tobacco and other miscellaneous tax)

The year-over-year and actual-to-budget decreases are primarily due to:

• a deterioration in corporate income tax revenue primarily due to an unbudgeted accrual of a liability related to prior year assessments, a decrease in current year payments and a temporary elimination of the small business tax effective October 2020;

• year-over-year increase in cannabis excise tax, reflecting increased consumption; and

• higher-than-budgeted liquor consumption tax due to higher-than-expected consumption.

20  Government of Saskatchewan Public Accounts 2020-21

Financial Statement Discussion and Analysis

Details

Revenue (continued)

In 2020-21, non-renewable resources revenue was $1.11 billion, a decrease of $643 million, or 36.7 per cent, over 2019-20 and a $110 million, or 11.1 per cent, increase when compared to budget. There was a year-over-year decrease in all non-renewable resources revenue categories with the most significant decreases in oil and natural gas, resource surcharge and potash. The increase from budget is largely attributable to greater-than-expected oil and natural gas revenue, partially offset by lower-than-expected potash and other non-renewable resources revenue.

Potash

The year-over-year and actual-to-budget decreases are primarily due to:

• a decrease in the average mine netback price from $490 per K2O tonne in 2019-20 and $434 per K2O tonne at budget to $390 per K2O tonne in 2020-21.

    This decrease is partially offset by:

• an increase in sales volume of 14.1 million K2O tonnes in 2020-21 compared to 12.7 million K2O tonnes in the prior year and 13.9 million K2O tonnes at budget.

Oil & natural gas

The year-over-year decrease is primarily due to:

• a lower average Canadian dollar well-head oil price in Saskatchewan of $36.54 per barrel in 2020-21, compared to $52.54 per barrel in the prior year. This decrease in the average Canadian dollar well-head oil price is due to:

• a lower average U.S. dollar West Texas Intermediate (WTI) oil price;

• a higher average exchange rate; partially offset by

• a lower average light-heavy oil blend differential.

• a decline in oil production.

The actual-to-budget increase is primarily due to:

• a greater-than-budgeted average Canadian dollar well-head oil price in Saskatchewan of $36.54 per barrel, compared to the $21.00 per barrel at budget. This increase is due to:

• a higher-than-budgeted average U.S. dollar WTI oil price;

• a lower-than-budgeted light-heavy oil blend differential; partially offset by

• a higher-than-budgeted average exchange rate.

• higher-than-budgeted oil production.

Resource surcharge

The year-over-year decrease is primarily due to:

• a decrease from the oil and gas and potash sectors, largely reflecting lower oil and potash prices; and

• a decrease from uranium sector primarily due to the impact of the Cigar Lake mine closures.

The actual-to-budget increase is primarily due to:

• an increase from the oil and gas sector, mainly due to greater-than-expected WTI oil prices.

    This increase is partially offset by:

• a decrease from the potash sector, mainly reflecting lower-than-budgeted average potash prices; and

• a decrease from the uranium sector primarily due to the greater-than-budgeted impact of the Cigar Lake mine closures.

Government of Saskatchewan Public Accounts 2020-21  21

Financial Statement Discussion and Analysis

Details

Revenue (continued)

Other non-renewable resources (including crown land sales and other miscellaneous non-renewable resources)

The year-over-year and actual-to-budget decreases are primarily due to:

• a decrease in uranium royalties primarily due to the impact of the Cigar Lake mine closures; and

• a decrease in crown land sales due to a reduction in both hectares sold and the average price per hectare reflecting the impact of the pandemic on capital markets and the low oil price environment.

22  Government of Saskatchewan Public Accounts 2020-21

Financial Statement Discussion and Analysis

Details

Revenue (continued)

Net income from Government Business Enterprises (GBEs) was $1.28 billion in 2020-21, an increase of $423 million, or 49.4 per cent, over 2019-20 and $549 million, or 75.4 per cent, over budget. The increase over prior year was primarily due to an increase in insurance and financing sector. Better-than-expected net income in each of the GBE sectors contributed to the increase over budget.

Insurance and financing

The increase over prior year is primarily due to:

• unprecedented investment returns resulting largely from a significant rebound in equity markets following the COVID-related market volatility experienced in March 2020;

• an improvement in underwriting results for auto insurance in which there were fewer claims attributed to a reduction of vehicles on roads during the COVID-related economic slowdown; and

• growth in premiums written.

These year-over-year increases are partially offset by:

• a one-time rebate to the motoring public of Saskatchewan; and

• an increase in other claims costs largely attributed to a catastrophic winter storm as well as COVID-related return-to-work barriers for injured workers that increased the average duration of wage-loss benefits.

The increase over budget is primarily due to:

• better-than-anticipated investment income as budgets did not anticipated the magnitude of the equity market rebound following the initial market reaction to the declaration of a global pandemic; and

• lower-than-expected auto claims related to fewer vehicles on the roads.

These increases over budget are partially offset by:

• an unbudgeted rebate to the motoring public; and

• higher-than-anticipated on-the-job injury claims mainly resulting from COVID-related return-to-work barriers.

Utility    

The year-over-year increase is primarily due to:

• an increased margin on natural gas sales resulting from favorable year-over-year market value adjustments;

• improved telecommunication results associated with continued wireless adoption and wireline growth services reflecting a growing subscriber base with subscribers opting for services delivered over a fibre network;

• extraordinary sales volumes in export electricity sales and trading resulting from winter storms that had widespread impacts on North American electricity markets; and

• a favorable ruling by an arbitration panel in relation to a contractual dispute resulting in a cash award.

Government of Saskatchewan Public Accounts 2020-21  23

Financial Statement Discussion and Analysis

Details

Revenue (continued)

Utility (continued)

These year-over-year increases are partially offset by:

• a net increase in fuel and purchased power costs resulting from higher fuel prices including the federal carbon charge, an unfavorable change in the fuel mix and cost savings associated with lower generation volumes;

• lower electricity sales, particularly in the oilfield and commercial customer classes, largely offset by higher residential and farm consumption;

• an increase in capital related costs for ongoing capital expenditure, particularly for electricity and gas generation, transmission and distribution assets as well as the expansion of the province’s fibre footprint; and

• forgone revenue for customer relief programs in response to the COVID-19 pandemic.

The increase over budget is primarily due to:

• higher-than-budgeted electricity sales, net of related costs, attributable to greater-than-expected demand for in-province and export sales;

• greater-than-expected profits from the sale of wireless telecommunication equipment together with stronger-than-expected wireless growth;

• an unbudgeted arbitral award resulting from a favorable ruling on a contractual dispute; and

• higher-than-expected customer capital contributions related to the completion of capital projects during the year.

Liquor and gaming

The year-over-year decline is primarily a result of:

• COVID-related public health measures including shutdowns of casinos and video lottery terminals (VLTs) over the course of the year.

These year-over-year decreases were partially offset by:

• an increase in liquor sales over the prior year.

The increase over budget is primarily due to:

• higher-than-expected liquor sales and VLT profits.

24  Government of Saskatchewan Public Accounts 2020-21

Financial Statement Discussion and Analysis

Details

Revenue (continued)

Other own-source revenue was $2.12 billion in 2020-21. The year-over-year decrease of $15 million, or 0.7 per cent, was primarily due to decreases in other revenue and fees, partially offset by an increase in investment income.   When compared to budget, other own-source revenue increased by $190 million, or 9.8 per cent, representing higher-than-expected fees and investment income.

Other own-source

The year-over-year and actual-to-budget changes are due to:

• the impact of COVID-19 resulting in:

• reduced ancillary and out-province/country healthcare fees as well as tuition fees related to restrictions on services;

• less fines, forfeits and penalties revenue in the court system;

• an increase in investment income in the public employees’ benefit plans primarily due to improvements in the current year market performance compared to the market volatility of the first quarter of 2020; and

• additional revenue related to the donation of personal protective equipment.

• a decrease in donations revenue, mainly due to the completion of the Jim Pattison Children’s Hospital in the prior year;

• a decrease in motor vehicle fees;

• an increase in forestry revenue reflecting increased demand and improved commodity prices;

• an increase in bottle deposits revenue due to a lower percentage of containers returned for refunds; and

• increased lottery profits.

The year-over-year decrease was additionally impacted by:

• a decrease in gaming revenue due to COVID-related closure of gaming establishments;

• a decrease in agricultural land sales; and

• a decrease in immigration deposit forfeitures.

The increase over budget was additionally impacted by:

• greater-than-budgeted increases in prior-year refunds and casual revenue;

• unbudgeted revenue resulting from a delay in the transfer of the securities division in the Financial and Consumer Affairs Authority to a national regulator; and

• higher-than-budgeted sinking fund earnings.

Government of Saskatchewan Public Accounts 2020-21  25

Financial Statement Discussion and Analysis

Details

Revenue (continued)

Federal transfers were $3.13 billion in 2020-21, an increase of $543 million, or 21.0 per cent, over 2019-20 and $346 million, or 12.4 per cent, when compared to budget. The year-over-year and actual-to-budget increases were mainly due to COVID-related funding.

Canadian Health Transfer

The year-over-year increase is primarily due to:

• a legislated annual increase in the national allocation equal to the greater of 3 per cent and the three-year moving average of the Canadian nominal GDP growth rate with an adjustment for changes in Saskatchewan’s share of the national population.

The decrease from budget was nominal

Canadian Social Transfer

The year-over-year increase is primarily due to:

• a legislated 3 per cent annual increase in the national allocation with an adjustment made for changes in Saskatchewan’s share of the national population.

The decrease from budget was nominal.

Other transfers from the federal government

The year-over-year and actual-to-budget increases are primarily due to:

• COVID-related funding largely comprised of:

• Saskatchewan’s share of the Safe Restart Agreement and Safe Return to Class Fund;

• funding for the new Accelerated Site Closure Program for the reclamation of inactive oil wells. This funding was less than budgeted due to fewer-than-expected projects being completed; and

• funding for the new Saskatchewan Temporary Wage Supplement program.

• an increase in funding for various infrastructure programs. The year-over-year increase was primarily due to an increase in eligible expenditures under the Investing in Canada Infrastructure Program with 2020-21 being the first full year of the program. Despite the year-over-year increase, funding was less-than-budgeted due to slower-than-expected progress on projects;

• an unbudgeted increase for the finalization of Saskatchewan’s claim under the federal Fiscal Stabilization Program related to the 2016-17 fiscal year;

• a one-time supplement to the Workforce Development Agreement; and

• a year-over-year increase in French language funding due to eligibility requirements being met in the current year.

These increases were partially offset by:

• a year-over-year decrease due to one-time Gas Tax program funding received in the prior year;

• a year-over-year decrease in federal disaster assistance funding;

• a year-over-year decrease in AgriStability funding due to an improvement in crop prices and the movement of products. Despite the year-over-year decrease, funding was greater-than-budgeted; and

• lower federal contributions to crop insurance premiums, as a result of a shift in crop mix and lower insured acres on the part of producer.

26  Government of Saskatchewan Public Accounts 2020-21

Financial Statement Discussion and Analysis

Details

Expense

Total expense was $15.65 billion in 2020-21, 61.4 per cent of which represents spending in the health and education sectors. The SFS report expense by theme and by object, or major type of expense such as salaries and benefits, transfers and operating costs

* In 2020-21, key components of “other” include financing charges (5%), transportation (4%), agriculture (3%), economic development (3%), general government (2%) and environment and natural resources (2%).

Government of Saskatchewan Public Accounts 2020-21  27

Financial Statement Discussion and Analysis

Details

Expense (continued)

Total expense was $15.65 billion in 2020-21. This represents an increase of $444 million, or 2.9 per cent, over the prior year. The most notable increases were in the health, economic development and community development themes primarily due to COVID-related expenses. The total expense reported in 2020-21 was $424 million, or 2.6 per cent, less than the budget. The decrease from budget was primarily due to lower-than-budgeted agriculture expenses, primarily due to favorable crop and harvest conditions.

*  In 2021 Actual, key components of “other” include financing charges ($721 million), transportation ($617 million), agriculture ($526 million), economic development ($478 million), general government ($379 million), and environment and natural resources ($255 million). The 2021 Budget for “other” includes a $200 million health and public safety contingency as a measure of prudence in the event of a possible resurgence of the COVID-19 pandemic. Actual expenses are presented within the themes to which they relate.

Health

The year-over-year and actual-to-budget increases are primarily due to:

• COVID-related measures, partially from utilization of the Safe Restart Agreement, primarily comprised of:

• incremental compensation for health care workers;

• increased usage of medical, surgical and laboratory supplies;

• purchases of minor equipment and leased space to accommodate and treat COVID patients;

• equipment and software to support remote working conditions;

• purchases of personal protective equipment;

• cohorting and screening at long-term care homes; and

• screening and testing services.

• collective bargaining agreement increases to salaries and benefits;

• additional staffing of physicians; and

• additional spending on drugs due to increase in price and utilization.

These increases were partially offset by:

• savings from COVID-related service slowdowns where there were temporarily lower utilization rates for certain services including out-of-province, physician and other hospital services.

28  Government of Saskatchewan Public Accounts 2020-21

Financial Statement Discussion and Analysis

Details

Expense (continued)

Education

The year-over-year decrease is primarily due to:

• a decrease in pension costs for Teacher’s Superannuation Plan (TSP) due to gains arising from changes in actuarial assumptions, including higher interest rates.

This decrease was partially offset by:

• COVID-related increases in expenses largely comprised of:

• utilization of the Province’s share of the Safe Return to Class Fund, partially offset by operational savings resulting from temporary school closures; and

• higher childcare support, primarily from the utilization of Safe Restart Agreement.

The decrease from budget is mainly attributed to:

• lower-than-expected pension costs for TSP primarily due to gains arising from changes in actuarial assumptions, including higher-than-expected interest rates; and

• unbudgeted savings as a result of temporary closures of K-12 schools and post-secondary institutions due to the COVID-19 pandemic.

Social services and assistance

The year-over-year increase is primarily due to:

• increased spending in various disability and child and family programs to:

• address emerging needs, changes in service levels and other enhancements for disability programs and services; and

• address utilization pressures to create new group home spaces and provide other service enhancements for child and family services.

• COVID-related costs associated with the hotel isolation program; and

• increased social housing maintenance, utility and insurance premiums.

These increases were mostly offset by:

• lower utilization of the Income Assistance programs resulting from uptake of federal COVID support programs.

The decrease from budget is primarily due to:

• lower-than-expected income assistance utilization resulting from the uptake of federal COVID support programs; and

• lower-than-budgeted social housing costs due to delayed and lower-than-expected uptake in housing projects.

These decreases were partially offset by:

• unbudgeted COVID-related expenses primarily due to the hotel isolation program, child and family isolation spaces and expanded services for minors.

Protection of persons and property

The year-over-year and increase-over-budget is primarily due to:

• COVID-related expenses primarily comprised of:

• salary pressures and additional operating costs for custody and court services; and

• personal protective equipment purchases.

• a year-over-year increase for the RCMP for salary and operating increases, additional officers for First Nations communities and other service enhancements.

Community development

The year-over-year increase is primarily due to:

• COVID-related expenses primarily comprised of:

• funding for municipalities through the Municipal Economic Enhancement Program;

• utilization of funding from the Safe Restart Agreement; and

• Emergency Pandemic Support for First Nations and Métis organizations in response to the closure of gaming establishments.

• increased funding through the Investing in Canada Infrastructure Program as 2020-21 was the first full year of this program; and

• increased urban revenue sharing reflecting increases in provincial sales tax revenue in 2018- 19 over the previous year.

Government of Saskatchewan Public Accounts 2020-21  29

Financial Statement Discussion and Analysis

Details

Expense (continued)

Community development (continued)

These increases were partially offset by:

• a decrease in First Nations Gaming Agreement transfer payments due to the suspension of the Agreement as a result of the closure of gaming establishments during COVID;

• a decrease in Gas Tax Program funding to municipalities due to one-time additional funding provided by the federal government in the prior year; and

• one-time funding provided to municipalities in the prior year to mitigate the impact of the phase out of coal-fired electricity.

The increase from budget is primarily due to:

• the flow-through of municipal Safe Restart Agreement funding; and

• increased spending under the New Building Canada Fund due to faster-than-expected progress on construction projects.

These increases from budget were partially offset by:

• lower-than-budgeted spending under the Investing in Canada Infrastructure Program resulting from slower-than-expected progress on construction projects; and

• lower-than-budgeted northern water and waste water system upgrade funding due to lower-than-expected costs and delays in residential and landfill projects.

Other expense themes (including financing charges, transportation, agriculture, economic development, general government, and environment and natural resources)

The year-over-year increase is primarily due to

• COVID-related support measures largely comprised of:

• the Saskatchewan Economic Recovery Rebate;

• the Accelerated Site Closure Program spending for the reclamation of inactive wells;

• the Small Business Emergency Payment Program;

• the Saskatchewan Temporary Wage Supplement program; and

• Saskatchewan tourism sector support.

• increased funding provided for infrastructure through the Investing in Canada Infrastructure Program and capital stimulus funding to rural municipalities;

• increases in financing charges largely tied to COVID-related borrowing, interest related to the completion of the Regina Bypass and higher interest rates for pension plans; and

• the administration of the 2020 general election.

These increases were partially offset by:

• a decrease in pension costs for the Public Service Superannuation Plan (PSSP) primarily due to prior year losses finished being amortized and new gains arising from changes in actuarial assumptions, including higher interest rates;

• a decrease in crop insurance and wildlife damage claims due to favorable harvest conditions;

• a decrease in AgriStability expenses due to better prices and movement of products; and

• a recovery of a contaminated sites provision resulting from a change in measurement to align with industry practices and regulations.

The decrease from budget is primarily due to:

• lower-than-budgeted crop insurance claims as current year crop conditions were better than the budgeted 10-year average;

• a health and public safety contingency for which actual expenses are presented within the themes to which they relate;

• lower-than-anticipated activity for the Accelerated Site Closure Program;

• lower-than-expected pension costs for the PSSP primarily due to gains arising from changes in actuarial assumptions and plan experience differences; and

• an unbudgeted recovery of a contaminated sites provision resulting from a change in measurement to align with industry practices and regulations.

These decreases from budget were partially offset by:

• unbudgeted COVID-related support measures primarily comprised of:

• the Saskatchewan Economic Recovery Rebate;

• the Saskatchewan Temporary Wage Supplement program; and

• support for the Saskatchewan tourism sector.

• greater-than-expected highway winter maintenance costs and stimulus infrastructure spending on rural and urban highway connector roads, including capital grants to rural municipalities; and

• higher-than-expected AgriStability expenses due to greater-than-expected prior year claim amounts.

30  Government of Saskatchewan Public Accounts 2020-21

Financial Statement Discussion and Analysis

Details

Expense (continued)

* Transfers are provided to third parties for salaries, capital and other costs.

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

* Transfers are provided to third parties for salaries, capital and other costs.

** The key component of “other” is amortization of capital assets

The most significant change was a $375 million increase in transfers, primarily due to financial support provided to residents, businesses and municipalities to address the adverse impact of the COVID-19 pandemic.

* Transfers are provided to third parties for salaries, capital and other costs.

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

Government of Saskatchewan Public Accounts 2020-21  31

Financial Statement Discussion and Analysis

Details

Expense (continued)

*  In 2015-16, the inclusion of an additional three months of operations of certain GBEs contributed approximately $120 million to GBE financing charges.

Financing charges have increased in recent years mainly due to an increase in debt financing for the replacement of aging infrastructure as well as for the building of new capacity to meet the demands of the province’s growing population. The increase in 2020-21 is primarily due to COVID-related borrowing. The average effective interest rate on gross debt during 2020-21 was 3.5 per cent (2019-20 - 3.9 per cent). Pension interest expense is a function of the unfunded pension liability and the interest rates that are based on the Government’s borrowing rates. The average effective interest rate on the unfunded pension liability during 2020-21 was 2.8 per cent (2019-20 - 2.5 per cent). Interest on P3 obligations, ranging from 3.1 to 3.5 per cent, reflects the Government’s cost of borrowing at the date the P3 contract was signed.

The Statement of Operations reports financing charges that the Government incurs related to its general debt, unfunded pension liability and obligations under long-term financing arrangements (P3 obligations) but does not include government business enterprise (GBE) financing charges. GBE financing charges are included in the net income from GBEs reported on the Statement of Operations and disclosed in schedule 3 of the SFS. For general debt, financing charges are determined by the amount of general debt and the interest rate attached to that debt.

32  Government of Saskatchewan Public Accounts 2020-21

Financial Statement Discussion and Analysis

Details

Financial Assets

Financial assets represent the amount of resources available to the Government that can be converted to cash to meet obligations or fund operations.

*  At March 31, 2021, primarily accounts receivable ($1.75 billion), loans receivable ($504 million) and other investments ($411 million).

Liabilities

Liabilities represent the obligations the Government has to others arising from past transactions or events.

	From 2016-17 to 2020-21, liabilities increased by $6.64 billion. This was primarily a result of a $6.58 billion increase in general debt. More detailed information on the significant liabilities can be found in the pages following.
*  At March 31, 2021, primarily accounts payable and accrued liabilities ($3.15 billion).

Government of Saskatchewan Public Accounts 2020-21  33

Financial Statement Discussion and Analysis

Details

Liabilities (continued)

	At March 31, 2021, the SFS report general debt of $14.48 billion and GBE specific debt of $9.10 billion. General debt, after several years of little change, has increased over the past six years. Until 2020-21, these increases have helped to finance the replacement of aging infrastructure as well as building new capacity to meet the demands of a growing population in the Province. This year, the increase was primarily attributable to borrowing to cover COVID-related revenue shortfalls, economic stimulus spending and incremental expenses.
Public debt consists of gross debt net of sinking funds and includes:
•  general debt, which is: •   debt issued by the General Revenue Fund (GRF) and other government service organizations (GSOs); and •   debt issued by the GRF and subsequently loaned to government business enterprises (GBEs); and •  GBE specific debt, which is debt issued by GBEs or debt issued by the GRF specifically on behalf of GBEs where the Government expects to realize the receivables from the GBEs and settle the external debt simultaneously. The general debt on the Statement of Financial Position does not include GBE specific debt. GBE specific debt is included in the Investment in GBEs reported on the Statement of Financial Position and disclosed in schedule 8 of the SFS.
	At March 31, 2021, the SFS report pension liabilities of $6.58 billion, an increase of $260 million since 2011-12. This increase represents the amount by which pension costs, including interest on the pension liabilities and actuarial adjustments, exceed payments to the pension plans and retirees. It is primarily a result of a decline in interest rates over the same period of time, where small fluctuations in interest rates have a significant impact on the pension liability. Since 2015-16, the pension liability has decreased by $1.34 billion as payments have begun to exceed the pension costs.
Pension liabilities represent the future obligations for the Government’s defined benefit pension plans. The pension liability fluctuates with changes in actuarial assumptions such as interest rates and life expectancy. The Government limited its pension exposure over 40 years ago when it closed the main defined benefit plans to new members and introduced defined contribution plans. There is no liability exposure for the Government under defined contribution plans.

34  Government of Saskatchewan Public Accounts 2020-21

Financial Statement Discussion and Analysis

Details

Liabilities (continued)     Obligations under long-term financing arrangements represent the Government’s liability for public private partnerships (P3s). P3 obligations increase as the related assets are built (percentage of completion basis), and are reduced as payments are made to the P3 partner.       The Government has been party to four P3 arrangements (as disclosed in schedule 10 of the SFS). At March 31, 2021, all four P3 projects are complete and operational

Non-Financial Assets

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

    The Statement of Financial Position reports a net book value of capital assets recognized by government service organizations (GSOs) of $12.02 billion and does not include the capital assets recognized by government business enterprises (GBEs). Capital assets recognized by GBEs total $15.91 billion at March 31, 2021 and are included in the investment in GBEs reported on the Statement of Financial Position and disclosed in schedule 3 of the SFS. The net book value represents the original cost of capital assets net of accumulated amortization, disposals and write-downs in value   The net book value of capital assets recognized by the Government has steadily increased over the last five years indicating that the Government has been acquiring new or replacing existing capital assets.   Acquisition of capital assets in 2020-21 was $2.04 billion, $1.20 billion acquired by GBEs and $837 million by GSOs. The investment in capital assets made by GSOs was primarily in the transportation, health and education sectors mainly for road, bridge and water management assets ($445 million) and land, buildings and improvements ($178 million). The GBEs continued to replace aging infrastructure and invest in capital projects to meet the demand for growth, and improve safety.

Government of Saskatchewan Public Accounts 2020-21  35

Financial Statement Discussion and Analysis

Details

Cash Flow

The Statement of Cash Flow reports on the sources and uses of cash and temporary investments during the year. During the year, the Government’s overall cash position increased by $126 million, from $2.74 billion in 2019-20 to $2.86 billion in 2020-21.

	The primary source of cash was $6.83 billion from taxation. Another significant source of cash was $3.57 billion from transfers from the Federal Government.
	The most significant use of cash was $7.40 billion for salaries and benefits largely for frontline service providers in the health and education sectors. Another significant use of cash was $4.96 billion for transfers.

36  Government of Saskatchewan Public Accounts 2020-21

Financial Statement Discussion and Analysis

Risks and Uncertainties   The Government is subject to risks and uncertainties that arise from variables which the Government cannot directly control. These risks and uncertainties include:   •  changes in economic factors such as economic growth or decline, commodity and non-renewable resource prices, inflation, interest rates, marketplace competition, trade barriers, population change, personal income and retail sales; •  exposure to interest rate risk, foreign exchange rate risk, price risk, credit risk and liquidity risk (see note 3 of the SFS); •  changes in transfers from the federal government; •  utilization of government services, such as insurance, health care and social services; •  volatility in the pension liability due to external factors such as interest rates and actuarially determined assumptions of future events; •  other unforeseen developments including unusual weather patterns and natural and other disasters; •  criminal or malicious attacks, both cyber and physical in nature, potentially resulting in business interruption, privacy breach and loss of, or damage to, information, facilities and equipment; •  identification and quantification of environmental liabilities; •  supply chain disruptions and other factors that could hinder the safe delivery of products and services; •  outcomes from litigation, arbitration and negotiations with third parties; •  changes in reported results where actual experience may differ from initial estimates as discussed in note 2 of the SFS; and •  changes in accounting standards.     Recognizing that Saskatchewan is reliant on the revenue from non-renewable resources and that the Province’s financial results can be influenced by other external factors, the Government takes a prudent approach in developing its budget assumptions for macroeconomic variables and non-renewable resources prices. The Government uses a number of forecasts from national forecasting agencies and banks, private industry and private sector analysts when developing the underlying assumptions for fiscal forecasts both on budget day and throughout the fiscal year.   The fiscal impact of changes in the underlying economic assumptions, including non-renewable resources prices, are estimated on a regular basis to quantify the risk associated with each forecast assumption. By understanding the size of the risk inherent in the fiscal projections, the Government is better able to make sound financial decisions.   Finally, for the Government to meet its challenges of growth and remain competitive where it operates in a competitive environment, attention is directed towards maintaining and investing in the Province’s infrastructure to support the steady growth the Province has been experiencing and to allow for continued growth in the future.   The COVID-19 pandemic has caused material disruption to businesses and has resulted in an economic slowdown. COVID-19 increases the risks and uncertainties to the Government’s financial position and operations.

Government of Saskatchewan Public Accounts 2020-21  37

Summary Financial Statements

Responsibility for the Summary Financial Statements

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

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

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

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

On behalf of the Government of the Province of Saskatchewan.

DONNA HARPAUER

Deputy Premier and

Minister of Finance

RUPEN PANDYA

Deputy Minister of Finance

TERRY PATON

Provincial Comptroller

Regina, Saskatchewan

June 2021

Government of Saskatchewan Public Accounts 2020-21�� 41

Summary Financial Statements

Independent Auditor’s Report

To the Members of the Legislative Assembly of Saskatchewan

Opinion

We have audited the consolidated financial statements of the Government of Saskatchewan, which comprise the Statement of Financial Position as at March 31, 2021, and the Statements of Operations, Accumulated Deficit, Change in Net Debt, and Cash Flow for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Government of Saskatchewan as at March 31, 2021, and the consolidated results of its operations, the consolidated changes in its net debt, and its consolidated cash flows for the year then ended in accordance with Canadian public sector accounting standards.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Government of Saskatchewan in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Information

Management is responsible for the other information. The other information comprises the information included in Public Accounts 2020-21 Volume 1 Summary Financial Statements, but does not include the consolidated financial statements and our auditor’s report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or any knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor’s report. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

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

In preparing the consolidated financial statements, management is responsible for assessing the Government of Saskatchewan’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Government of Saskatchewan either intends to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Government of Saskatchewan’s financial reporting process.

Government of Saskatchewan Public Accounts 2020-21  43

Summary Financial Statements

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Government of Saskatchewan’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Government of Saskatchewan’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Government of Saskatchewan to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Government of Saskatchewan to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the consolidated financial statement audit. We are solely responsible for the auditor’s opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control identified during the audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Regina, Saskatchewan	JUDY FERGUSON, FCPA, FCA
June 17, 2021	Provincial Auditor
	Office of the Provincial Auditor

44  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Statement of Financial Position

As at March 31, 2021

(thousands of dollars)

	2021			2020
Financial Assets
Cash and temporary investments (note 4 )		2,862,621			2,736,481
Accounts receivable (schedule 1 )		1,754,866			1,665,500
Loans receivable (schedule 2 )		503,773			469,177
Investment in government business enterprises (schedule 3 )		7,466,716			6,840,053
Other investments (schedule 4 )		410,731			388,231
Other financial assets		4,895			4,903
Total Financial Assets		13,003,602			12,104,345
Liabilities
Accounts payable and accrued liabilities (schedule 5 )		3,148,937			3,003,392
Unearned revenue (schedule 6 )		527,204			179,700
Pension liabilities (note 5 )(schedule 7 )		6,575,845			7,152,321
General debt (schedule 8 )		14,481,477			12,199,259
Obligations under long-term financing arrangements (schedule 10 )		1,440,677			1,472,341
Other liabilities (schedule 11 )		512,154			386,213
Total Liabilities		26,686,294			24,393,226
Net Debt		(13,682,692	)		(12,288,881	)
Non-Financial Assets
Tangible capital assets (schedule 12 )		12,017,273			11,858,796
Inventories held for consumption		236,787			182,904
Prepaid expenses		60,991			55,864
Total Non-Financial Assets		12,315,051			12,097,564
Accumulated Deficit		(1,367,641	)		(191,317	)

Contractual rights (note 7 )

Contingent assets (note 8 )

Contractual obligations (note 9 )

Contingent liabilities (note 10 )

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

Government of Saskatchewan Public Accounts 2020-21  45

Summary Financial Statements

Statement of Operations

For the Year Ended March 31, 2021

(thousands of dollars)

	2021						2020
	Budget1			Actual			Actual
Revenue
Taxation		7,202,800			6,881,974			7,553,272
Non-renewable resources		997,400			1,107,774			1,750,298
Net income from government business enterprises (schedule 3 )		728,800			1,278,141			855,369
Other own-source		1,933,100			2,122,951			2,138,392
Transfers from the federal government		2,786,600			3,133,069			2,589,806
Total Revenue (schedule 13 )		13,648,700			14,523,909			14,887,137
Expense
Health		6,176,300			6,338,063			6,051,358
Education		3,361,900			3,276,875			3,501,562
Social services and assistance		1,490,300			1,448,377			1,436,348
Protection of persons and property		806,500			819,709			787,087
Community development		762,800			792,587			641,435
Financing charges (schedule 15 )		718,200			720,829			674,967
Transportation		585,800			616,853			545,491
Agriculture		798,800			525,934			633,037
Economic development		389,800			477,746			232,560
General government		421,900			379,395			505,918
Environment and natural resources		362,400			254,574			196,699
Health and public safety contingency1		200,000			-			-
Total Expense (schedule 14 )		16,074,700			15,650,942			15,206,462
Deficit		(2,426,000	)		(1,127,033	)		(319,325	)

¹  Budget figures, as presented in the 2020-21 Saskatchewan Provincial Budget, include a health and public safety contingency as a measure of prudence in the event of a possible resurgence of the COVID-19 pandemic. Actual expenses are presented within the themes to which they relate.

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

46  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Statement of Accumulated Deficit

For the Year Ended March 31, 2021

(thousands of dollars)

	2021						2020
	Budget			Actual			Actual
Accumulated (deficit) surplus, beginning of year		(191,317	)		(191,317	)		154,752
Adjustment to accumulated (deficit) surplus ( note 11 )		-			(32,392	)		(94,269	)
Deficit		(2,426,000	)		(1,127,033	)		(319,325	)
Other comprehensive (loss) income (schedule 3 )		-			(16,899	)		67,525
Accumulated Deficit, End of Year		(2,617,317	)		(1,367,641	)		(191,317	)

Statement of Change in Net Debt

For the Year Ended March 31, 2021

(thousands of dollars)

	2021						2020
	Budget			Actual			Actual
Deficit		(2,426,000	)		(1,127,033	)		(319,325	)
Tangible Capital Assets (schedule 12 )
Acquisitions		(1,044,200	)		(837,101	)		(843,024	)
Amortization		637,300			630,206			597,072
Disposals		-			8,350			11,828
Write-downs		-			6,676			11,501
Adjustments		-			33,392			119,949
Net acquisition of tangible capital assets		(406,900	)		(158,477	)		(102,674	)
Net acquisition of other non-financial assets		-			(59,010	)		(11,265	)
Increase in net debt from operations		(2,832,900	)		(1,344,520	)		(433,264	)
Adjustment to accumulated (deficit) surplus ( note 11 )		-			(32,392	)		(94,269	)
Other comprehensive (loss) income (schedule 3 )		-			(16,899	)		67,525
Increase in net debt		(2,832,900	)		(1,393,811	)		(460,008	)
Net debt, beginning of year		(12,288,881	)		(12,288,881	)		(11,828,873	)
Net Debt, End of Year		(15,121,781	)		(13,682,692	)		(12,288,881	)

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

Government of Saskatchewan Public Accounts 2020-21  47

Summary Financial Statements

Statement of Cash Flow

For the Year Ended March 31, 2021

(thousands of dollars)

	2021			2020
Operating Activities
Deficit		(1,127,033	)		(319,325	)
Non-cash items included in the deficit
Net income from government business enterprises (schedule 3 )		(1,278,141	)		(855,369	)
Other non-cash items included in the deficit (schedule 17 )		580,321			635,002
Net change in non-cash operating activities (schedule 17 )		(115,558	)		(101,994	)
Dividends received from government business enterprises (schedule 3 )		638,579			698,185
Cash (Used for) Provided by Operating Activities		(1,301,832	)		56,499
Capital Activities
Acquisition of tangible capital assets (schedule 12 )		(837,101	)		(843,024	)
Proceeds on disposal of tangible capital assets		8,366			17,904
Cash Used for Capital Activities		(828,735	)		(825,120	)
Investing Activities
Net increase in loans receivable		(42,541	)		(33,492	)
(Increase in) repayment of equity advances to government business enterprises		(4,000	)		33,000
Acquisition of other investments		(57,335	)		(50,390	)
Disposition of other investments		74,343			117,039
Sinking fund contributions for general debt (schedule 9 )		(165,084	)		(145,873	)
Sinking fund redemptions for general debt (schedule 9 )		320,924			71,920
Cash Provided by (Used for) Investing Activities		126,307			(7,796	)
Financing Activities
Proceeds from general debt		3,542,792			1,431,267
Repayment of general debt		(1,366,433	)		(159,942	)
Decrease in obligations under long-term financing arrangements (schedule 10)		(31,664	)		(526,540	)
(Decrease) increase in other liabilities1		(14,295	)		3,575
Cash Provided by Financing Activities		2,130,400			748,360
Increase (decrease) in cash and temporary investments		126,140			(28,057	)
Cash and temporary investments, beginning of year		2,736,481			2,764,538
Cash and Temporary Investments, End of Year		2,862,621			2,736,481

¹  Excludes the changes in unamortized debt related costs, which are classified as operating activities.

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

48  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Notes to the Financial Statements

As at March 31, 2021

1. Significant Accounting Policies

Basis of accounting

These Summary financial statements are prepared in accordance with Canadian public sector accounting standards issued by the Public Sector Accounting Board.

Government reporting entity

The government reporting entity consists of public sector entities (entities), which include government service organizations, government business enterprises and partnerships.

Government service organizations and government business enterprises are entities controlled by the Government. Controlled entities that are self-sufficient and have the financial and operating authority to sell goods and services to individuals and other organizations outside the government reporting entity as their principal activity are classified as government business enterprises. All other controlled entities are government service organizations.

A partnership exists when the Government has entered into a contractual arrangement with one or more partners outside the government reporting entity where these partners share control of governance decisions and, on an equitable basis, share the significant risks and benefits associated with operating the partnership.

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

Trust funds

Trust funds consist of property conveyed or assigned to the Government, as trustee, by agreement or statute to administer on behalf of beneficiaries. Because trust funds are administered but not controlled by the Government, the funds are excluded from the government reporting entity and disclosed in note 6.

Method of consolidation

Government service organizations are consolidated after adjustment to a basis consistent with the accounting policies described in this note. Inter-entity balances and transactions, other than expensed provincial sales tax, are eliminated. Government service organizations in which a non-controlling interest exists are proportionately consolidated.

Government business enterprises are recorded using the modified equity method based on their results prepared in accordance with International Financial Reporting Standards. Using this method, the Government’s investment in government business enterprises, which is initially recorded at cost, is adjusted annually to include the Government’s proportionate share of net earnings or losses and certain other net equity changes of government business enterprises without adjustment to the accounting policies described in this note. With the exception of dividends and unrealized inter-entity gains and losses, inter-entity balances and transactions are not eliminated.

Partnerships are proportionately consolidated, at the ownership share disclosed in schedule 18, after adjustment to a basis consistent with the accounting policies described in this note. Inter-entity balances and transactions, other than expensed provincial sales tax, are eliminated.

Financial results of entities with fiscal year ends other than March 31 are adjusted for transactions occurring on or before March 31 that have a significant impact on these financial statements.

Specific accounting policies

Financial assets

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

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

Loans receivable are initially recorded at cost. Where there has been a loss in value that is other than a temporary decline, the loan is written down to recognize the loss.

Government of Saskatchewan Public Accounts 2020-21  49

Summary Financial Statements

Notes to the Financial Statements

1. Significant Accounting Policies (continued)

Other investments are recorded at cost, with the exception of pooled investment funds, which are recorded at market value. Investments recorded at cost are written down to market value when there is evidence of a permanent decline in value.

Other financial assets include inventories and other assets held for sale, which are valued at the lower of cost and net realizable value.

Liabilities

Liabilities are present obligations resulting from 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. Contingencies, including loss provisions on guaranteed debt, are recorded when it is likely that a liability exists and the amount can be reasonably estimated.

Accounts payable and accrued liabilities primarily include obligations to pay for goods and services acquired prior to year end and to provide authorized transfers where eligibility criteria are met. Obligations for contaminated sites are recorded net of any expected recoveries, using the Government’s best estimate of the amount required to remediate sites for which the Government is either directly responsible or has accepted responsibility. Accrued salaries and benefits include other employee future benefits which are recognized in the period the employees provide service.

Pension liabilities are calculated using the projected benefit method prorated on services, except as otherwise disclosed in note 5. Pension plan assets are valued at market-related values. Changes in pension liabilities resulting from estimation adjustments due to experience gains and losses and changes in actuarial assumptions are amortized on a straight-line basis over the expected average remaining service life of the related employee group. Amortization commences in the year following the determination of the adjustment. Gains or losses resulting from plan amendments are recognized in the period of the plan amendment.

General debt, recorded at par, is debt issued by government service organizations and includes issued amounts subsequently transferred to government business enterprises. Government business enterprise specific debt, which is disclosed separately on schedule 8, is debt issued by, or specifically on behalf of, government business enterprises.

Debenture issues that require contributions to a sinking fund are recorded at principal less sinking fund balances. Premiums and discounts on long-term investments within these sinking funds are amortized on a constant yield basis.

Obligations under long-term financing arrangements, representing the Government’s liability for public private partnerships (P3s), are recorded on the percentage-of-completion basis over the period of construction of the P3 asset and reduced by progress and capital payments made to the P3 partner. The percentage of completion is applied to the nominal value of progress payments and the present value of future capital payments, discounted to the date the asset is available for use, using the Government’s borrowing rate for general debt at the time the agreement is signed.

Other liabilities include unamortized debt-related costs, which is comprised of premiums and discounts, debt issue costs and foreign exchange gains and losses. These costs are deferred and amortized on a straight-line basis over the remaining life of the debt issue.

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 and are not for sale in the normal course of operations. Non-financial assets are recorded at cost and expensed as they are consumed.

Inventories held for consumption are recorded at cost and are expensed as they are consumed. COVID-19 vaccines received from the federal government at no cost have not been reflected in these financial statements due to the measurement difficulty. During the year, the Government received 233 thousand COVID-19 vaccines and held 29 thousand in inventory at March 31, 2021.

Tangible capital assets include all amounts directly attributable to the acquisition, construction, development or betterment of the asset. During construction, these assets are recorded based on their percentage of completion and are disclosed as work in progress. Amortization is generally on a straight-line basis over the estimated useful life of the asset and commences when the asset is put in service. Intangible assets, items inherited by right of the Crown such as Crown lands, forests, water and mineral resources, works of art and historical treasures are not recognized as assets in these financial statements as an estimate of their future economic benefits cannot be reasonably and verifiably quantified.

50  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Notes to the Financial Statements

1. Significant Accounting Policies (continued)

Tangible capital assets procured through P3s are valued at the total of the nominal value of progress payments made during or on completion of construction and the present value of the future capital payments, discounted to the date the asset is available for use, using the Government’s borrowing rate for general debt at the time the agreement is signed.

Revenue

Revenue, recorded on the accrual basis, represents economic resources earned by the Government from taxes and other sources that are used to deliver public services.

Taxation revenue is recognized when the tax has been authorized by the legislature and the taxable event occurs. The taxable event differs for each type of tax; for example, taxation revenue is recognized when taxpayers earn income, purchase products and services, or are in possession of real property. Tax concessions are recorded as a reduction in taxation revenue.

For individual and corporation income taxes, cash received from the federal government, adjusted for assessment data from the federal government when it provides a more reliable estimate, is used as the basis for recording the tax revenue.

Non-renewable resources revenue is recognized based on the production, sales or profits generated from the specific non-renewable resource. Oil and natural gas revenue is based primarily on price and production; resource surcharge revenue is based on sales volumes and prices; and potash revenue is based primarily on profits generated.

Transfers from the federal government are recognized as revenue in the period the transfer is authorized and eligibility criteria are met, except when and to the extent that the transfer stipulations give rise to an obligation that meets the definition of a liability. Transfers meeting the definition of a liability are recorded as unearned revenue and recognized as the stipulations are met.

Expense

Expenses, recorded on the accrual basis, represent the Government’s cost to deliver public services and are classified by theme in the Statement of Operations and by object in Schedule 14, while Schedule 16 discloses expense themes by object. Transfers are recognized as expenses in the period the transfer is authorized and eligibility criteria are met.

Expenses classified by theme, which are based on the major functional groupings of activities, are as follows:

The agriculture theme includes expenses to assist and improve the agriculture and food industry through development activities including research, education, regulation and investment in the sector as well as providing direct support to farmers through loans, income stabilization and insurance programs.

The community development theme includes expenses to maintain and develop engaged and vibrant communities, including financial assistance and infrastructure funding to local governments and other authorities, which in turn provide community services. Community development also includes funding directed to specific community services such as sport, culture, arts, and heritage that improve quality of life.

The economic development theme includes expenses to strengthen, expand and diversify Saskatchewan’s economy as well as to promote trade and growth in export markets. The expenses arise from activities such as research, marketing, product development, financing, financial assistance, technology and infrastructure. Economic development also includes the strategic management of Saskatchewan’s non-renewable resources to support future economic activity.

The education theme includes expenses to develop and maintain a quality prekindergarten through post-secondary education system which is designed to impart knowledge and information, including activities that support and encourage ongoing learning and the acquisition of specialized skills as well as providing supports to help students be successful.

The environment and natural resources theme includes expenses to protect and improve the quality of the environment through: the management of fish, wildlife, forests and land; recycling; and the prevention and clean-up of environmental hazards.

The financing charges theme includes expenses associated with general debt including interest, foreign exchange gains and losses, discounts and premiums, fees and commissions. It also includes financing costs related to pension and other employee future benefits liabilities, obligations under long-term financing arrangements such as public-private partnerships and capital lease obligations.

51  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Notes to the Financial Statements

1. Significant Accounting Policies (continued)

The general government theme includes expenses for centralized government services including: government contributions to, and management of, employee benefit plans; property, vehicle and information technology management; the collection of government revenues; the formation of budgetary policy; the preparation and audit of the Government’s public accounts; and the constitutional, political and law enactment aspect of the Government.

The health theme includes expenses to support, maintain and restore the physical and mental health of Saskatchewan residents. Health expense primarily includes: the delivery of health services through acute, emergency, rehabilitative, long-term, community-based, and home-based care; cancer prevention, diagnosis and treatment programs; the prevention and control of infectious diseases; the subsidization of prescription drugs; and the education and promotion of healthy lifestyles.

The protection of persons and property theme includes expenses to promote and ensure the security, safety and protection of residents and property which is mainly achieved through a fair justice system, policing programs and supervision and rehabilitation services for offenders. Protection of persons and property also includes: services that promote, support and enforce safe work practices and employment standards; provincial emergency management through 911 services, public safety, disaster assistance and wildfire management; and victims’ services.

The social services and assistance theme includes expenses to provide financial assistance and services to individuals and families in need because of poverty, abuse, neglect and disability. This includes income support programs, accessible and safe housing, child protection services, adoption services and providing life’s needs to persons with intellectual disabilities.

The transportation theme includes expenses for the development, construction and maintenance of an integrated provincial transportation system using highways, rural roads, bridges, ferry crossings, airstrips and communication networks.

Schedule 18 identifies the entities included in each theme.

New accounting standards

A number of new and amended Canadian public sector accounting standards have been issued but not applied in preparing these financial statements. These standards will come into effect as follows:

PS 3450 Financial Instruments (effective April 1, 2022), a new standard establishing guidance on the recognition, measurement, presentation and disclosure of financial instruments, including derivatives.

PS 2601 Foreign Currency Translation (effective April 1, 2022), replaces PS 2600 with revised guidance on the recognition, presentation and disclosure of transactions that are denominated in a foreign currency.

PS 1201 Financial Statement Presentation (effective in the period PS 3450 and PS 2601 are adopted), replaces PS 1200 with revised general reporting principles and standards of presentation and disclosure in government financial statements.

PS 3041 Portfolio Investments (effective in the period PS 3450, PS 2601 and PS 1201 are adopted), replaces PS 3040 with revised guidance on accounting for, and presentation and disclosure of, portfolio investments.

PS 3280 Asset Retirement Obligations (effective April 1, 2022), a new standard establishing guidance on the recognition, measurement, presentation and disclosure of a liability for retirement of a tangible capital asset.

PS 3400 Revenue (effective April 1, 2023), a new standard establishing guidance on the recognition, measurement, presentation and disclosure of revenue.

PS 3160 Public Private Partnerships (effective April 1, 2023), a new standard establishing guidance on the recognition, measurement and disclosure of public private partnerships arrangements.

The Government plans to adopt these new and amended standards on the effective date and is currently analyzing the impact this will have on these financial statements.

52  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Notes to the Financial Statements

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

• in pension liabilities of $6,773.5 million (2020 - $7,352.1 million), insurance claim obligations of $4,132.3 million (2020 - $3,943.7 million) and agricultural income stability program obligations of $80.4 million (2020 - $118.6 million) because actual experience may differ from actuarial or historical estimations;

• in individual and corporation income taxation revenue of $2,903.5 million (2020 - $3,416.5 million) because final tax assessments may differ from initial economic estimates;

• in environmental obligations of $719.9 million (2020 - $811.1 million), including the remediation of contaminated sites because the existence and extent of contamination and the timing and cost of remediation cannot be reliably estimated in all cases;

• in oil and natural gas non-renewable resources revenue of $378.2 million (2020 - $667.8 million) because of price and production sensitivities in the royalty revenue structures;

• in potash non-renewable resources revenue of $421.6 million (2020 - $554.4 million) because actual operating profits may differ from initial estimates;

• in resource surcharge non-renewable resources revenue of $263.1 million (2020 - $413.3 million) because the final valuation of resource sales may differ from initial estimates;

• in the Canada Health Transfer and Canada Social Transfer revenue of $1,761.7 million (2020 - $1,718.9 million) because of changes in economic and demographic conditions in the Province and the country;

• in the value of certain investments of $1,222.0 million (2020 - $1,146.8 million) because these investments have no active market;

• in the Provincial Disaster Assistance Program receivable of $223.4 million (2020 - $218.4 million) because actual settlement payments may differ from initial estimates; and

• in unbilled utility revenue receivable of $123.0 million (2020 - $126.3 million) because actual usage may differ from estimated usage.

Measurement uncertainty is inherent but inestimable for many financial statement items. The impact of the COVID-19 pandemic adds an additional level of uncertainty for the measurement of certain amounts recorded in these financial statements, including the valuation of accounts receivable, loans receivable and certain investments. 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. Risk Management of Investments and Debt

The Government, collectively through its government service organizations and government business enterprises, invests and borrows in both domestic and foreign capital markets. In doing so, the Government is exposed to five types of risk:

Interest rate risk is the risk of an unfavorable fluctuation in the Government’s investment income and financing charges due to changes in interest rates.

Foreign exchange rate risk is the risk that the Government’s investment income and financing charges will fluctuate unfavorably with a change in the value of the Canadian dollar relative to other currencies.

Price risk is the risk that the Government’s return on its investment portfolio will fluctuate unfavourably due to a decline in equity prices in Canadian and global markets.

Credit risk is the risk that the Government may incur a loss from the failure of another party to meet its obligations.

Liquidity risk is the risk that the Government will not be able to meet its financial commitments over the short term.

Investment Management

Interest rate risk, foreign exchange rate risk and price risk all contribute to market risk, or the risk that the fair value of the Government’s investments will decline because of changes in market prices. These risks are managed by establishing policies regarding quality and quantity for the asset mix of the Government’s investment portfolios. The chosen asset mix helps reduce the impact of market fluctuations by requiring investment in different asset classes and in both domestic and foreign markets.

Government of Saskatchewan Public Accounts 2020-21  53

Summary Financial Statements

Notes to the Financial Statements

3. Risk Management of Investments and Debt (continued)

Interest rate risk exists for the Government in its exposure to changes in interest rates in its fixed income investments such as bonds and debentures. This risk is managed by setting asset mix guidelines that limit the extent to which interest rates impact the market value of the Government’s fixed income investments. It is estimated that a one per cent increase in interest rates would increase the Government’s deficit by $140.0 million (2020 - $130.5 million).

Foreign exchange rate risk is managed by defining maximum limits on exchange rate sensitive assets, such as foreign equities, in investment portfolios. It is estimated that a ten per cent appreciation in the Canadian dollar relative to other currencies would result in a $258.8 million (2020 - $204.8 million) increase in the Government’s deficit.

Price risk, resulting from exposure to changes in equity prices, is managed by having geographically and industry diverse investment portfolios. In addition, the Government limits its investment concentration in any one investee or related group of investees to ten per cent of the investee’s share capital and ten per cent of the Government’s investment portfolio.

Credit risk is managed through an investment policy that limits investments to high credit quality (minimum rating is BBB for bonds and debentures and R-1 for short-term investments) as well as limits the maximum exposure with respect to any one issuer.

Debt Management

The Government manages its risks by maintaining a preference for fixed rate Canadian dollar denominated debt. Where market conditions dictate that other forms of debt are more attractive, the Government seeks opportunities to use derivative financial instruments to reduce these risks.

Interest rate risk is managed by issuing debt securities at predominantly fixed rates of interest rather than at floating rates of interest.

Floating-rate debt is defined as the sum of floating-rate debentures, short-term promissory notes and fixed-rate debt maturing within one year. The Government seeks opportunities to effectively convert floating-rate debt into fixed-rate debt through the use of interest rate swaps. The Government has interest rate swaps on a notional value of debt of $198.9 million (2020 - $52.3 million). At March 31, 2021, 89.2 per cent (2020 - 83.0 per cent) of the Government’s gross debt effectively carried a rate of interest that was fixed for greater than a one-year period.

Public debt includes floating-rate debt of $2,528.6 million (2020 - $4,038.0 million). A one percentage point increase in interest rates would have increased the deficit by $25.3 million (2020 - $40.4 million).

Foreign exchange rate risk is managed by maintaining a preference for issuing debt that is denominated in Canadian dollars. Where debt has been issued in foreign currencies, the Government seeks opportunities to effectively convert it into Canadian dollar debt through the use of cross-currency swaps. At March 31, 2021, 100.0 per cent (2020 - 100.0 per cent) of the Government’s gross debt is effectively denominated in Canadian dollars.

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

• debentures of 300.0 million U.S. dollars (2020 - 800.0 million U.S. dollars) fully hedged to $384.0 million Canadian (2020 - $1,017.8 million Canadian); and

• debentures of 115.0 million Euros (2020 - nil) fully hedged to $179.8 million Canadian (2020 - nil).

During 2019-20, 225.0 million U.S. dollars were hedged to Canadian dollars at an exchange rate of 1.2172. In 2020-21 there were no foreign denominated interest payments on debentures.

In total, the Government has cross-currency swaps on a notional value of debt of $685.3 million (2020 - $1,291.7 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 for derivative financial instrument contracts 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, 2021, 95.2 per cent (2020 - 95.2 per cent) of the notional value of the Government’s derivative financial instrument contracts is held by counterparties with a Standard and Poor’s credit rating of A or better. The remaining counterparties held a Standard and Poor’s credit rating of BBB+ or better.

Liquidity risk is managed by distributing debt maturities over many years, maintaining sinking funds in which the investment maturities approximate that of the underlying long-term debt issues and maintaining adequate cash reserves and short-term borrowing programs as contingent sources of liquidity.

54  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Notes to the Financial Statements

4. Cash and Temporary Investments

Temporary investments are $1,332.0 million (2020 - $1,701.9 million) and mature in less than one year. Due to the short-term nature of these investments, cost approximates market value. Cash and temporary investments includes $16.3 million (2020 - $16.4 million - restated) segregated as a result of restrictions in agreements with external parties.

5. Retirement Benefits

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

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. Employees 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.

Actuarial valuations are performed at least triennially. When a valuation is not done in the current fiscal year an actuary extrapolates the most recent valuation. Valuations and extrapolations 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 plan assets are valued at market-related values based on the actual market values averaged over a four-year period.

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

The accrued benefit obligation is determined using the projected benefit method prorated on services. Pension plan assets are valued at market-related values by averaging the difference between the net investment income on a market-value basis and the expected investment income, based on expected rate of return on plan assets, over a five-year period.

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

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

Government service organizations

Defined benefit plans and joint defined benefit plan

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

The Government is required to match employee current service contributions for all plans except the PSSP, Judges and PPNTE. Funding contributions are required for the PPNTE. Separate pension plan assets are maintained for TSP, Judges and PPNTE. For the other plans, employee contributions are received and pension obligations are paid directly by the Government.

The Government also participates in the Saskatchewan Healthcare Employees’ Pension Plan (SHEPP), a joint defined benefit plan for employees of the Saskatchewan Health Authority and certain other Government health entities. The Government participating employers contribute to the plan at the ratio of 1.12 to 1 of employee contributions and any actuarially determined deficiency is the responsibility of participating employers and employees at the same ratio. The Government portion of employer contributions represents approximately 98 per cent of total participating employer contributions to the plan.

Government of Saskatchewan Public Accounts 2020-21  55

Summary Financial Statements

Notes to the Financial Statements

5. Retirement Benefits (continued)

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

	2021										2020
	TSP		PSSP		Others		SHEPP		Total		Total
Plan status		closed		closed		closed 1		open		n/a		n/a
Employee contribution rate (percentage of salary)		7.85		7.00-9.00 2		5.00-9.00 2		8.10-10.70		n/a		n/a
Number of active employees		72		17		1,057		38,457		39,603		39,087
Average age of active employees (years)		64.6		64.7		48.1		43.8		44.0		44.1
Number of former employees entitled to deferred pension benefits		4,728		1		180		2,142		7,051		7,103
Number of superannuates and surviving spouses		10,784		4,580		608		19,904		35,876		35,333
Actuarial valuation date		June 30/18		Dec. 31/20		Various		Dec. 31/19		n/a		n/a
Long-term assumptions used
Rate of compensation increase (percentage)		3.00		n/a		3.00-3.25		2.75		n/a		n/a
Expected rate of return on plan assets (percentage)		4.00		n/a		4.50-6.05		6.00		n/a		n/a
Discount rate (percentage)		3.00		2.90		2.60-6.05		6.00		n/a		n/a
Inflation rate (percentage)		2.25		2.00		2.00-2.25		2.00		n/a		n/a
Expected average remaining service life (years)		1.10		-		8.00-12.00		12.80		n/a		n/a
Post-retirement index (percentage of annual increase in Consumer Price Index)		80		70		Various		Ad hoc		n/a		n/a

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

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

Defined contribution plans

The Government sponsors the Public Employees Pension Plan (PEPP). The Government provides contributions to the plan at specified rates for employee current service. The Government also contributes to the Saskatchewan Teachers’ Retirement Plan (STRP) which is sponsored by the Saskatchewan Teachers’ Federation, as well as the Municipal Employees’ Pension Plan (MEPP) and the Regina Civic Employees’ Superannuation and Benefit Plan (RCESP). The Government has fully funded its share of contributions to the defined contribution plans.

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

	2021										2020
	PEPP		STRP 1		MEPP 2		RCESP 3		Total		Total
	Government Sponsored						(Restated)
Plan status		open		open		open		open		n/a		n/a
Employee contribution rate (percentage of salary)		5.00-9.00 4		9.50-11.70		9.00		7.80-13.10		n/a		n/a
Government contribution rate (percentage of salary)		5.00-11.50 4		7.25-9.25		9.00		8.80-14.60		n/a		n/a
Government service organization participation
Number of active employees		18,613		15,253		9,884		2,230		45,980		46,037
Employee contributions (thousands of dollars)		90,318		112,557		26,462		10,556		239,893		233,886
Government contributions (thousands of dollars)		105,022		88,996		26,476		11,756		232,250		218,053

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

²  Certain employees of Boards of Education and Regional Colleges participate in the MEPP, a multi-employer defined benefit plan. All costs, including costs of any actuarially determined deficiency, are equally shared by the employers and employees. At December 31, 2020, audited financial statements for the MEPP reported an accrued benefit obligation of $2,359.2 million (2019 - $2,144.6 million) and plan assets at market value of $3,198.1 million (2019 - $2,803.0 million).

³  Certain employees of the Saskatchewan Health Authority and a Board of Education participate in the RCESP, a multi-employer defined benefit plan. Amended provisions effective January 1, 2016 require the actuarially determined deficiency as at December 31, 2014 to be amortized over a period of no more than 20 years. The pre-amendment deficiency will be funded through participating employer and employee contributions at a rate of 60 per cent and 40 per cent respectively and any future deficits funded on a 50:50 basis. At December 31, 2020, audited financial statements for the RCESP reported an accrued benefit obligation of $1,570.1 million (2019 - $1,506.3 million) and plan assets at market value of $1,718.1 million (2019 - $1,614.5 million).

⁴  Contribution rate varies based on employee group.

56  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Notes to the Financial Statements

5. Retirement Benefits (continued)

Pension expense

The total pension expense of government service organizations includes the following:

(thousands of dollars)	2021			2020
Defined benefit plans
Current period benefit cost		16,878			17,846
Amortization of estimation adjustments		(360,143	)		69,203
Employee contributions		(4,154	)		(4,088	)
Change in valuation allowance		(469	)		1,299
Pension interest cost (schedule 15 )		188,600			173,880
Pension (recovery) expense, defined benefit plans		(159,288	)		258,140
Other plans
Pension expense, joint defined benefit plan		180,064			176,915
Pension expense, defined contribution plans		232,250			218,053
Total Pension Expense (schedule 16 )		253,026			653,108

Government business enterprises

Defined benefit plans

There are additional pension plans which are accounted for in the investment in government business enterprises. The two main defined benefit plans of government business enterprises are the Power Corporation Superannuation Plan (SaskPower) and the Saskatchewan Telecommunications Pension Plan (SaskTel). Other plans include the Saskatchewan Government Insurance Superannuation Plan, the Liquor Board Superannuation Plan, and the Pension Plan for the Employees of the Saskatchewan Workers’ Compensation Board (WCB). The WCB pension plan was wound up during 2020-21.

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

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

	2021								2020
	SaskPower		SaskTel		Others		Total		Total
Plan status		closed		closed		closed		n/a		n/a
Number of active employees		9		13		2		24		33
Number of former employees, superannuates and surviving spouses		1,595		1,832		240		3,667		3,836
Employee contributions (thousands of dollars)		-		-		2		2		1
Government contributions (thousands of dollars)		-		-		3,597		3,597		3,166
Benefits paid (thousands of dollars)		60,167		64,925		8,079		133,171		137,208
Actuarial valuation date		Dec. 31/19		Mar. 31/20		Various		n/a		n/a
Long-term assumptions used
Discount rate (percentage)		3.05		3.10		2.90-3.10		n/a		n/a
Inflation rate (percentage)		2.00		2.25		2.00		n/a		n/a
Post-retirement index (percentage of annual increase in Consumer Price Index)		70		100		Various		n/a		n/a

Government of Saskatchewan Public Accounts 2020-21  57

Summary Financial Statements

Notes to the Financial Statements

5. Retirement Benefits (continued)

Based on the latest actuarial valuation with extrapolations to the government business enterprises’ year ends, the present value of the accrued benefit obligation and the fair value of plan assets are shown in the table below:

(thousands of dollars)	2021									2020
	SaskPower		SaskTel			Others		Total		Total
Accrued benefit obligation		822,826		996,219			72,358		1,891,403		1,864,744
Fair value of plan assets		660,853		1,034,297			38,523		1,733,673		1,690,119
Plan Deficit (Surplus)		161,973		(38,078	)		33,835		157,730		174,625
Valuation allowance		-		38,078			1,855		39,933		25,146
Pension Liabilities		161,973		-			35,690		197,663		199,771

Defined contribution plan

Information on government business enterprises’ participation in PEPP is as follows:

	2021		2020
			(Restated)
Plan status		open		open
Employee contribution rate (percentage of salary) 1		4.45-8.60		4.45-7.50
Government contribution rate (percentage of salary) 1		5.50-11.00		5.50-11.00
Government business enterprise participation
Number of active employees		12,377		12,592
Government contributions (thousands of dollars)		70,416		68,445
1  Contribution rate varies based on employee group.

Pension expense

Pension expense for government business enterprises is included in net income from government business enterprises. The total pension expense of government business enterprises includes the following:

(thousands of dollars)	2021			2020
Defined benefit plans		7,311			7,210
Defined contribution plan		70,416			68,445
Total Pension Expense		77,727			75,655
Net Pension Gain Included in Other Comprehensive Income		(7,410	)		(17,289	)

6. Trust Funds

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

(thousands of dollars)	2021		2020
Pension plans and annuity funds		18,252,260		15,373,916
Employee benefit plans		681,956		641,587
Public Guardian and Trustee of Saskatchewan		286,618		247,243
Other		85,272		103,325
Total Trust Fund Assets1		19,306,106		16,366,071

¹  Amounts are based on the latest financial statements of the funds closest to March 31, 2021, where available.

58  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Notes to the Financial Statements

7. Contractual Rights

Contractual rights are rights to economic resources arising from contracts or agreements that will result in both assets and revenues in the future when the terms of those contracts or agreements are met. The Government has the following contractual rights:

(thousands of dollars )	2021														2020
	2022		2023		2024		2025		2026		Thereafter		Total		Total
															(Restated)
Governmental Service Organizations
Transfers from the federal government
Capital		195,184		192,062		264,324		220,235		131,805		86,300		1,089,910		1,215,792
Operating1		308,120		230,374		77,448		73,479		67,866		125,322		882,609		1,062,514
Other own-source revenue
Fees
Real property sales and leases		69,173		21,199		17,260		15,335		10,253		95,666		228,886		222,322
Subsidized housing rental fees		2,926		2,554		1,672		947		399		-		8,498		7,773
Other fees		17,790		5,005		1,944		500		500		3,500		29,239		34,981
Total Government Service Organizations		593,193		451,194		362,648		310,496		210,823		310,788		2,239,142		2,543,382
Government Business Enterprises
Liquor and gaming sector2		30,000		70,000		85,000		96,000		100,000		-		381,000		315,130
Utility sector		171,583		43,341		36,360		2,280		2,200		4,400		260,164		195,196
Total Government Business Enterprises		201,583		113,341		121,360		98,280		102,200		4,400		641,164		510,326
Total Contractual Rights3		794,776		564,535		484,008		408,776		313,023		315,188		2,880,306		3,053,708

¹  The contractual rights for federal operating transfer agreements with no expiration date include estimated revenue for up to 11 contract years. Contractual rights beyond this could be significant.

²  A gaming agreement has an expiration date that extends to 2037; however, amounts for contractual rights beyond 2026 are not included. The contractual rights beyond 2026 for this agreement could be significant.

³  The Government has contractual rights that could be significant, but are not included in the table above, as the expected revenues cannot be reasonably estimated. These rights include: Canadian Agricultural Partnership, for which transfers from the federal government are based on crop yields each year; private reinsurance agreements, for which insurance recovery revenue arises from catastrophic events (e.g., severe weather); and forest management agreements, for which licensees pay fees based on the cubic meter harvested.

8. Contingent Assets

The Government has instituted a claim against tobacco and opioid manufacturers for the recovery of health care benefits paid as a result of tobacco and opioid consumption and opioid marketing. The amount of the potential recovery cannot be estimated.

Government of Saskatchewan Public Accounts 2020-21  59

Summary Financial Statements

Notes to the Financial Statements

9. Contractual Obligations

Contractual obligations are legal obligations to others that will become liabilities in the future when the terms of the contract are met. The Government has the following contractual obligations:

(thousands of dollars )	2021															2020
	2022		2023			2024		2025		2026		Thereafter		Total		Total
																	(Restated	)
Governmental Service Organizations
Policing transfer agreement		207,621		196,797			201,702		206,729		211,695		1,375,754		2,400,298		2,589,298
Operation, maintenance and life cycle rehabilitation payments under P3s		24,060		24,586			24,988		25,640		26,104		1,030,265		1,155,643		1,190,476
Construction and acquisition of tangible capital assets		545,318		11,443			6,856		2,014		154		-		565,785		444,397
Service agreements
Computer		110,224		52,905			28,136		21,553		11,778		3,622		228,218		201,220
Emergency communications		14,875		14,454			14,009		12,625		12,496		25,658		94,117		86,785
Transportation		29,083		25,036			16,484		9,556		6,972		-		87,131		115,393
Other		32,575		27,138			14,786		5,340		1,212		10,399		91,450		64,344
Operating lease agreements		89,874		73,346			56,362		40,866		29,407		91,491		381,346		338,044
Beverage container collection and recycling programs		35,074		35,536			36,554		-		-		-		107,164		131,253
Research and development		29,686		24,547			8,777		2,973		1,337		-		67,320		68,954
Housing subsidies, transfers and loans		18,624		7,466			7,045		6,260		4,888		-		44,283		47,670
Reinsurance contracts		25,500		-			-		-		-		-		25,500		-
Economic growth projects		2,810		1,515			1,515		1,515		1,515		6,115		14,985		16,952
Other transfers
Operating		1,104,859		819,131			640,009		528,321		123,643		-		3,215,963		1,269,177
Capital		178,985		74,977			22,469		7,057		623		1,129		285,240		185,272
Other		23,926		4,905			4,655		-		-		4,959		38,445		31,311
Total Government Service Organizations1		2,473,094		1,393,782			1,084,347		870,449		431,824		2,549,392		8,802,888		6,780,546
Government Business Enterprises Forward purchase contracts
Power		252,187		381,787			411,655		429,485		381,567		7,972,148		9,828,829		5,767,260
Coal		179,426		223,913	��		231,127		190,269		67,419		192,586		1,084,740		1,287,207
Natural gas		191,374		147,800			130,964		132,302		118,000		260,259		980,699		1,175,071
Other		2,982		504			-		-		-		-		3,486		7,145
Construction, acquisition and maintenance of capital assets		2,449,616		315,303			215,172		151,981		92,034		520,517		3,744,623		2,792,728
Service agreements		102,938		2,681			2,017		1,173		1,038		-		109,847		105,968
Other		6,315		3,015			3,015		3,015		3,015		5,002		23,377		26,392
Total Government Business Enterprises		3,184,838		1,075,003			993,950		908,225		663,073		8,950,512		15,775,601		11,161,771
Total Contractual Obligations		5,657,932		2,468,785			2,078,297		1,778,674		1,094,897		11,499,904		24,578,489		17,942,317

¹  Contractual obligations for government service organizations by theme are as follows:

	2021		2020
Protection of persons and property		2,629,475		2,776,996
Education		2,037,902		426,427
Transportation		1,114,385		1,011,009
Health		943,110		880,512
Social services and assistance		708,393		601,328
Community development		577,778		439,296
General government		388,433		330,046
Environment and natural resources		245,188		144,871
Agriculture		94,129		81,361
Economic development		64,095		88,700
		8,802,888		6,780,546

60  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Notes to the Financial Statements

10. Contingent Liabilities

Lawsuits

The Government is involved in various legal actions, the outcome of which is not determinable. Up to $93.2 million (2020 - $78.5 million) may be paid depending on the outcome of lawsuits in progress which include aboriginal land claims, claims for damages to persons and property and disputes over taxes and funding.

Other

The Government has up to $11.6 million (2020 - $10.0 million) in other contingent liabilities that are dependent on a letter of credit, environmental remediation and guaranteed debt repayments.

11. Adjustment to Accumulated (Deficit) Surplus

During 2020-21, there was an increase in the accumulated deficit, beginning of year of $32.4 million (2020 - $75.0 million decrease in the accumulated surplus, beginning of the year). These adjustments were made to remove the accumulated provincial sales tax paid on the acquisition of certain tangible capital assets. This also resulted in a decrease to tangible capital assets in each of the years.

In addition, during 2019-20, a government business enterprise changed its policy for recognition of certain losses on the disposal of capital assets. As a result, a $19.3 million reduction was made to both the accumulated surplus, beginning of year and investment in government business enterprises.

12. Impact of COVID-19 Pandemic

The COVID-19 pandemic has significantly impacted the Government’s fiscal results for the year ended March 31, 2021, the first full year operating in a COVID-19 environment since the global pandemic was declared. This impact is attributed to the negative impact that the pandemic has had on the economy, the cost of health and safety measures taken and the provision of financial support.

The negative impact the pandemic has had on the economy had the greatest impact on the Province’s fiscal results and includes:

• a decline in revenue, notably taxation and non-renewable resources; and

• stimulus spending in the form of infrastructure funding, rebates and tax credits to aid economic recovery.

Health and safety measures, with assistance from the federal government, were implemented. The measures taken:

• provided testing and contact tracing;

• supplied personal protective equipment;

• delivered vaccines;

• addressed health care system capacity shortages;

• provided support for a safe return to classrooms;

• controlled and prevented infections in vulnerable populations;

• supported municipalities in their response to COVID-19; and

• imposed public health orders and closures.

Financial support programs were delivered to sectors most impacted by pandemic-related public health orders and closures, including the:

• Saskatchewan small business emergency payment program;

• emergency pandemic response gaming partner grants;

• small business tax rate reduction;

• Saskatchewan tourism sector support program;

• oil and gas sector tax relief; and

• self-isolation support program.

Financial support programs, with assistance from the federal government, were delivered including the:

• Saskatchewan temporary wage supplement program; and

• Canada emergency commercial rent assistance.

The unprecedented and evolving nature of the COVID-19 pandemic continues to provide a level of uncertainty in the Government’s financial position and operating results.

Government of Saskatchewan Public Accounts 2020-21  61

Summary Financial Statements

Notes to the Financial Statements

13. Comparative Figures

Certain 2020 comparative figures have been reclassified to conform with the current year’s presentation.

62  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Accounts Receivable Schedule 1

As at March 31, 2021

(thousands of dollars)

	2021			2020
Taxation		606,137			548,501
Non-renewable resources		160,373			135,103
Other own-source		738,709			744,203
Transfers from the federal government		431,392			396,573
		1,936,611			1,824,380
Provision for loss		(181,745	)		(158,880	)
Total Accounts Receivable		1,754,866			1,665,500

Loans Receivable	Schedule 2
As at March 31, 2021
(thousands of dollars)

	2021			2020
Student loans1		332,908			277,820
Loans to government business enterprises2		240,768			249,342
Other3		15,647			19,620
		589,323			546,782
Provision for loss		(85,550	)		(77,605	)
Total Loans Receivable		503,773			469,177

¹  The Government holds $332.9 million (2020 - $277.8 million) in loans to students. Loans are interest free until the discontinuance of full-time studies or graduation. Interest rates are prescribed by the Government and range between 2.4 and 2.9 per cent (2020 - 2.4 and 2.9 per cent - restated). Student grants and other varieties of loan forgiveness are available to students who meet specific criteria.

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

A loss provision of $73.7 million (2020 - $63.6 million) has been recorded on these loans.

²  The Government has $275.0 million (2020 - $275.0 million) in loans receivable from government business enterprises repayable over 19 to 24 years and bearing interest between 3.9 and 4.8 per cent (2020 - 3.9 and 4.8 per cent). The loans are recorded net of $34.2 million (2020 - $30.7 million) for the government business enterprises’ equity in sinking funds administered by the Government. In 2019-20, the Government had an additional loan receivable of $5.0 million from a government business enterprise that was due within one year.

³  The Government’s loan portfolio also consists of $15.6 million (2020 - $19.6 million) in numerous other loans at various interest rates and maturities. Other loans include $11.9 million (2020 - $14.0 million) under the Headstart on a Home loan program repayable on demand and bearing interest at prime plus 5.0 per cent (2020 - 4.0 per cent). Security on other loans varies and may include promissory notes, mortgages on real property, security agreements or guarantees. A loss provision of $11.8 million (2020 - $14.0 million) has been recorded on these loans.

Government of Saskatchewan Public Accounts 2020-21  63

Summary Financial Statements

Investment in Government Business Enterprises

As at March 31, 2021

(thousands of dollars)

	Utility
	SaskEnergy			SaskPower			SaskTel			SaskWater			SGI
Assets
Cash and cash equivalents		(408	)		98,580			23,694			1,271			49,491
Accounts receivable		164,535			434,055			192,958			8,409			303,282
Inventories		27,959			250,566			26,347			602			-
Prepaid expenses		-			30,292			123,703			749			165,750
Investments3		-			-			-			-			1,290,217
Capital assets		2,866,464			10,381,570			2,042,097			350,341			26,995
Intangible assets		77,415			67,775			264,012			-			4,708
Sinking funds		136,324			864,365			84,619			13,510			-
Other assets		21,769			6,295			99,029			293			4,675
Total Assets4		3,294,058			12,133,498			2,856,459			375,175			1,845,118
Liabilities
Accounts payable and accrued liabilities		115,548			630,575			171,990			6,130			110,691
Dividends payable to government entities		6,907			17,373			32,688			2,085			36,750
Gross debt		1,749,024			7,040,069			1,316,498			89,213			-
Unearned revenue		16,056			22,416			84,689			195,225			520,510
Provision for insurance claims		-			-			-			-			646,473
Other liabilities7		251,302			1,569,903			62,062			4,835			26,129
Total Liabilities4		2,138,837			9,280,336			1,667,927			297,488			1,340,553
Net Assets (Debt)		1,155,221			2,853,162			1,188,532			77,687			504,565
Revenue
Operating		803,592			2,777,359			1,323,978			63,284			1,045,740
Investment income		-			-			6,555			35			128,678
Total Revenue4		803,592			2,777,359			1,330,533			63,319			1,174,418
Expense
Operating		671,765			2,197,664			1,167,526			52,656			453,066
Insurance claims		-			-			-			-			548,480
Financing charges5		51,021			419,454			32,186			2,318			744
Total Expense4		722,786			2,617,118			1,199,712			54,974			1,002,290
Income (loss) from operations		80,806			160,241			130,821			8,345			172,128
Unusual items4		-			-			-			-			-
Net Income from Government Business Enterprises		80,806			160,241			130,821			8,345			172,128
Retained earnings (loss), beginning of year		1,024,957			2,123,062			835,784			67,059			344,032
Adjustment to retained earnings (loss)6		-			-			-			-			-
Dividends to government entities		(20,553	)		(48,072	)		(117,739	)		(6,259	)		(87,000	)
Retained earnings, end of year		1,085,210			2,235,231			848,866			69,145			429,160
Accumulated other comprehensive income (loss), beginning of year		3,241			31,511			109,204			335			(3,847	)
Adjustment to accumulated other comprehensive income (loss)6		-			-			-			-			-
Other comprehensive income		(4,761	)		(6,580	)		(6,538	)		(493	)		(748	)
Accumulated other comprehensive income (loss), end of year		(1,520	)		24,931			102,666			(158	)		(4,595	)
Equity advances from government entities		71,531			593,000			237,000			8,700			80,000
Investment in Government Business Enterprises		1,155,221			2,853,162			1,188,532			77,687			504,565

¹  Net assets are restricted as disclosed on page 66.

²  Adjustments primarily include:

• the reversal of an adjustment made in 2019-20 for the change in investment portfolio value to reflect market volatility in the first quarter of 2020, due in large part to COVID-19; and

• the elimination of unrealized inter-entity gains and losses.

³  Includes bonds and debentures of $2,355.3 million (2020 - $2,174.8 million) that bear interest at rates up to 7.2 per cent (2020 - up to 7.2 per cent) and have maturity dates up to 56.5 years (2020 - up to 57.5 years).

⁴  Total assets include $1,242.1 million (2020 - $1,322.7 million) due from or invested in public sector entities (entities); total liabilities include $10,538.0 million (2020 - $10,594.4 million) in gross debt owing to entities and $377.0 million (2020 - $388.1 million - restated) in accounts payable or services due to entities; total revenue includes $366.8 million (2020 - $370.2 million) from entities; total expense includes $808.9 million (2020 - $815.7 million - restated) paid and owing to entities and unusual items include $2.4 million in expenses to entities.

⁵  Financing charges is reported net of sinking fund earnings. Interest in the amount of $357.8 million (2020 - $355.9 million) was paid and owing to entities.

⁶  Adjustment for 2020-21 represents the wind-up of a defined benefit pension plan (2020 - a change in accounting policy (note 11)).

64  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Schedule 3

2021																				2020
Insurance & Financing								Liquor & Gaming
Auto Fund1			WCB1			MFC		SLGA			SGC			Adjustments2			Total			Total
																				(Restated)
	273,592			27,215			321		26,482			4,711			-			504,949			502,221
	253,497			13,026			2,934		40,119			45			-			1,412,860			1,396,654
	3,997			-			-		29,205			56			-			338,732			298,406
	42,888			446			-		1,729			775			-			366,332			357,311
	3,072,087			2,135,333			248,421		-			-			-			6,746,058			5,843,486
	56,251			10,327			-		135,394			64,518			(19,254	)		15,914,703			15,723,872
	10,706			6,751			-		17,182			-			-			448,549			455,557
	-			-			16,149		-			-			-			1,114,967			1,206,862
	-			-			-		525			-			-			132,586			125,415
	3,713,018			2,193,098			267,825		250,636			70,105			(19,254	)		26,979,736			25,909,784
	362,399			16,138			1,145		23,253			10,256			-			1,448,125			1,076,410
	-			-			-		71,135			-			-			166,938			151,792
	-			-			248,079		94,980			4,988			-			10,542,851			10,585,496
	408,964			-			-		-			-			(26,787	)		1,221,073			1,186,192
	1,851,517			1,647,797			-		-			-			-			4,145,787			3,955,547
	-			6,920			-		62,590			4,505			-			1,988,246			2,114,294
	2,622,880			1,670,855			249,224		251,958			19,749			(26,787	)		19,513,020			19,069,731
	1,090,138			522,243			18,601		(1,322	)		50,356			7,533			7,466,716			6,840,053
	1,050,684			255,573			-		955,855			30,898			(1,015	)		8,305,948			8,433,056
	508,482			77,438			8,510		-			-			181,178			910,876			137,603
	1,559,166			333,011			8,510		955,855			30,898			180,163			9,216,824			8,570,659
	206,339			80,988			52		593,847			43,822			1,723			5,469,448			5,445,092
	784,436			335,157			-		-			-			-			1,668,073			1,735,579
	-			505			7,148		2,282			504			-			516,162			534,619
	990,775			416,650			7,200		596,129			44,326			1,723			7,653,683			7,715,290
	568,391			(83,639	)		1,310		359,726			(13,428	)		178,440			1,563,141			855,369
	(285,000	)		-			-		-			-			-			(285,000	)		-
	283,391			(83,639	)		1,310		359,726			(13,428	)		178,440			1,278,141			855,369
	806,747			607,108			16,253		(600	)		59,784			(170,907	)		5,713,279			5,575,346
	-			(1,226	)		-		-			-			-			(1,226	)		(19,251	)
	-			-			-		(358,956	)		-			-			(638,579	)		(698,185	)
	1,090,138			522,243			17,563		170			46,356			7,533			6,351,615			5,713,279
	-			(1,736	)		535		(2,700	)		-			-			136,543			69,018
	-			1,226			-		-			-			-			1,226			-
	-			510			503		1,208			-			-			(16,899	)		67,525
	-			-			1,038		(1,492	)		-			-			120,870			136,543
	-			-			-		-			4,000			-			994,231			990,231
	1,090,138			522,243			18,601		(1,322	)		50,356			7,533			7,466,716			6,840,053

⁷ Capital lease obligations, reported in other liabilites above, have the following payment schedule:

(thousands of dollars)	2021		2020
			(Restated	)
2020-21	-		196,373
2021-22	199,092		194,172
2022-23	198,681		194,241
2023-24	198,438		196,875
2024-25	191,515		190,051
2025-26	167,864		-
Thereafter	1,333,913		1,495,341
	2,289,503		2,467,053
Less interest and executory costs	(1,198,022	)	(1,345,717	)
Leasesa	1,091,481		1,121,336

                  ^a Leases bear interest up to 15.8 per cent (2020 - up to 15.8 per cent) and have expiry dates up to 31.3 years (2020 - up to 32.3 years).

Government of Saskatchewan Public Accounts 2020-21  65

Summary Financial Statements

Investment in Government Business Enterprises (continued) Schedule 3

The investment in government business enterprises is comprised of the Government’s equity in the entities listed below.

Utility

SaskEnergy Incorporated (SaskEnergy)

SaskEnergy distributes safe, reliable natural gas within Saskatchewan.

Saskatchewan Power Corporation (SaskPower)

SaskPower provides power generation, transmission and distribution services within Saskatchewan.

Saskatchewan Telecommunications Holding Corporation (SaskTel)

SaskTel offers a wide range of information and communications technology products and services including competitive voice, data and Internet services, wireless data services, entertainment services, data centre services, cloud-based services, security monitoring services, advertising services, and international software and consulting services.

Saskatchewan Water Corporation (SaskWater)

SaskWater provides professional water and wastewater services to select communities, rural municipalities, and industrial and commercial end-user customers within Saskatchewan.

Insurance & Financing

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

SGI’s fully competitive general insurance business, SGI CANADA, offers a comprehensive line of property and casualty insurance products including policies for automobile, home, farm and commercial enterprise in Saskatchewan and four other Canadian provinces.

The Auto Fund, administered by SGI, provides driver’s licenses, vehicle registrations and compulsory insurance on all vehicles registered in Saskatchewan. Any net assets of the Auto Fund are held on behalf of Saskatchewan’s motoring public and cannot be used for any other purpose.

Workers’ Compensation Board (Saskatchewan) (WCB)

WCB provides workplace insurance to Saskatchewan employers and provides benefits to workers who are injured in the course of their employment. Any net assets of the WCB cannot be used for any other purpose.

Municipal Financing Corporation of Saskatchewan (MFC)

MFC assists municipalities in financing their capital requirements.

Liquor & Gaming

Liquor and Gaming Authority (SLGA)

SLGA provides for the socially responsible distribution and regulation of liquor, cannabis and gaming in Saskatchewan. It also directly manages the majority of the Province’s electronic gaming machines, including video lottery terminals and slot machines at First Nations casinos.

Saskatchewan Gaming Corporation (SGC)

SGC owns and operates Casino Regina and Casino Moose Jaw.

66  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Other Investments Schedule 4

As at March 31, 2021

(thousands of dollars)

	2021	2020
Pooled investment funds	185,372	153,911
Bonds and debentures1	134,286	138,452
Other2	91,073	95,868
Total Other Investments	410,731	388,231

¹ Bonds and debentures held by the Government have a market value of $141.1 million (2020 - $141.7 million) and include securities of:

	2021	2020
Governments of other provinces (coupon interest range 1.9 to 5.8 per cent; maturing in 2.9 to 29.9 years)	49,183	39,860
Corporations (coupon interest range 1.3 to 6.9 per cent; maturing in 1.1 to 30.8 years)	47,887	51,012
Government of Canada (coupon interest range 0.5 to 3.5 per cent; maturing in 1.5 to 30.9 years)	31,409	41,253
Other (coupon interest range 2.5 to 5.4 per cent; maturing in 3.6 to 26.9 years)	5,807	6,327
Total Bonds and Debentures	134,286	138,452

² Other includes $70.6 million (2020 - $74.8 million) in fixed-rate securities with a market value of $71.7 million (2020 - $75.6 million) and $20.4 million (2020 - $21.0 million) in Canadian and international equity market investments with a market value of $151.2 million (2020 - $94.3 million).

Government of Saskatchewan Public Accounts 2020-21  67

Summary Financial Statements

Accounts Payable and Accrued Liabilities Schedule 5

As at March 31, 2021

(thousands of dollars)

	2021	2020
Accrued salaries and benefits1	1,018,584	882,397
Federal government repayments2	584,250	474,515
Transfers3	527,248	589,231
Supplier payments	375,184	364,090
Contaminated sites4	168,308	208,051
Accrued interest	123,004	109,283
Treaty land entitlement claims	103,824	100,236
Other	248,535	275,589
Total Accounts Payable and Accrued Liabilities	3,148,937	3,003,392

¹  Includes accruals for other employee future benefits of $414.6 million (2020 - $395.5 million) mainly for accumulated sick leave, long-term disability and life insurance benefits.

²  Includes amounts repayable for income taxes and Equalization transfers, $237.1 million (2020 - $177.5 million) of which is due within one year.

³  Includes transfers to the federal government of $123.9 million (2020 - $116.7 million) and capital transfers of $77.7 million (2020 - $52.5 million).

⁴  Includes contaminated sites consisting of:

Abandoned mines

The Government is responsible for remediation of certain abandoned uranium and precious and base metal mines on Crown land. For most of these abandoned mines, the companies that caused the contamination no longer exist. The contaminated sites liabilities include $84.3 million (2020 - $109.0 million) for the remediation of uranium mines, primarily the Gunnar and Lorado sites, and is net of expected recoveries of $11.2 million (2020 - $11.2 million). The Gunnar site has building debris, tailings and waste rock that contain radiation, and surface and ground water with elevated concentrations of uranium and several other elements. Lorado has radioactive tailings and 35 satellite uranium mine sites have issues including acidic water conditions and elevated radiation in exposed waste rock. The contaminated sites liabilities also include $30.8 million (2020 - $30.3 million) related to precious and base metal mines, which have several contaminants in soil, sediment and surface water from waste rock, tailings and concentrates.

Industrial operations

The Government has provided a $43.4 million (2020 - $59.5 million) indemnity for environmental liabilities predating 1986 related to the industrial operations of the ERCO Worldwide chemical plant and the Prince Albert pulp mill site. The chemical plant has excessive mercury levels in the soil throughout the site. The pulp mill site has excessive contaminants in a landfill waste area. During the year, a recovery of $16.0 million (2020 - nil) was recorded as a result of changes in remediation approach.

Other contaminated sites

The Government also has $9.8 million (2020 - $9.3 million) of other contaminated sites liabilities, mainly related to the storage of road salt and fuel.

Unearned Revenue Schedule 6

As at March 31, 2021

(thousands of dollars)

	2021	2020
Transfers from the federal government1	359,488	108
Motor vehicle licensing fees	70,399	68,444
Education	42,143	52,495
Health care	13,436	15,281
Other	41,738	43,372
Total Unearned Revenue	527,204	179,700

¹ Includes $334.1 million (2020 - nil) for the reclamation of inactive wells and $25.0 million (2020 - nil) for labour market initiatives.

68  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Pension Liabilities Schedule 7

As at March 31, 2021

(thousands of dollars)

	2021												2020
	TSP			PSSP			Others			Total			Total
Accrued benefit obligation, beginning of year		5,156,455			1,599,336			393,547			7,149,338			7,804,029
Current period benefit cost		834			10			16,034			16,878			17,846
Interest cost		159,776			48,039			17,762			225,577			210,182
Actuarial losses (gains)		102,882			5,426			15,530			123,838			(410,577	)
Benefit payments		(327,738	)		(116,868	)		(18,776	)		(463,382	)		(472,142	)
Accrued Benefit Obligation, End of Year		5,092,209			1,535,943			424,097			7,052,249			7,149,338
Plan assets, beginning of year		230,394			-			177,932			408,326			417,884
Employer contributions		286,467			116,866			13,855			417,188			428,366
Employee contributions		112			2			4,040			4,154			4,088
Return on plan assets1		27,335			-			9,642			36,977			36,302
Actuarial losses		(5,308	)		-			4,406			(902	)		(6,172	)
Benefit payments		(327,738	)		(116,868	)		(18,776	)		(463,382	)		(472,142	)
Plan Assets, End of Year2		211,262			-			191,099			402,361			408,326
		4,880,947			1,535,943			232,998			6,649,888			6,741,012
Unamortized estimation adjustments3		(82,939	)		(5,426	)		10,080			(78,285	)		406,598
Joint defined benefit plan (SHEPP) net asset1 4		n/a			n/a			(1,175,750	)		(1,175,750	)		(926,019	)
Valuation allowance5		-			-			1,179,992			1,179,992			930,730
Total Pension Liabilities6		4,798,008			1,530,517			247,320			6,575,845			7,152,321

¹  The actual rate of return on plan assets was 7.0 per cent (2020 - 1.2 percent) for the TSP and 11.0 per cent (2019 - 11.5 per cent) for the SHEPP.

²  The market value of plan investments was $424.2 million at March 31, 2021 (2020 - $436.1 million) for the defined benefit plans.

³  Unamortized estimation adjustments are amortized to pension expense over the expected average remaining service life of the related employee group at the time the estimation adjustments arose and commence in the year following the adjustment as follows: 1.1 years for the TSP; in the year following for the PSSP; up to 12.8 years for the SHEPP; and up to 13.0 years for the other plans.

⁴  At December 31, 2020, the SHEPP had a total accrued benefit obligation of $7,867.3 million (2019 - $7,292.2 million), plan assets at market-related values of $8,454.8 million (2019 - $7,824.9 million) and unamortized estimation adjustment losses of $588.2 million (2019 - $393.3 million). The Government portion of employer contributions to the plan totaled $180.1 million (2019 - $176.9 million). Total member contributions were $164.1 million (2019 - $161.2 million) and total benefit payments were $389.3 million (2019 - $362.5 million). The market value of plan investments was $8,893.7 million at December 31, 2020 (2019 - $8,041.5 million). The fair value of these investments increased to $9,035.3 million at March 31, 2021.

⁵  The valuation allowance includes $1,175.8 million (2019 - $926.0 million) for the SHEPP which reduces the Government portion of the SHEPP pension asset to nil as plan assets and surpluses are restricted for member benefits.

⁶  The total pension liabilities are based on the latest actuarial valuations extrapolated to March 31, 2021 for the defined benefit plans and December 31, 2020 for the joint defined benefit plan. Changes in assumptions can result in significantly higher or lower estimates of pension liabilities. A one percentage point decrease in the discount rate would result in a $621.6 million and $167.4 million increase in pension liabilities for the TSP and the PSSP respectively, and a one percentage point increase would result in a $517.8 million and $141.3 million decrease in pension liabilities for the TSP and the PSSP respectively. A one percentage point decrease in the discount rate would result in a $1,117.2 million decrease in the SHEPP pension asset, and a one percentage point increase would result in a $896.9 million increase in the SHEPP pension asset.

Government of Saskatchewan Public Accounts 2020-21  69

Summary Financial Statements

Public Debt Schedule 8

As at March 31, 2021

(thousands of dollars)

	2021						2020
	General Debt1 2		Government Business Enterprise Specific Debt1		Public Debt		General Debt1 2		Government Business Enterprise Specific Debt1		Public Debt
General Revenue Fund
Operating		7,200,001		-		7,200,001		6,149,964		-		6,149,964
Saskatchewan Capital Plan3		6,690,332		-		6,690,332		5,402,870		-		5,402,870
Saskatchewan Power Corporation4		84,821		6,044,029		6,128,850		86,187		6,311,905		6,398,092
SaskEnergy Incorporated4		63,616		1,524,631		1,588,247		64,640		1,427,534		1,492,174
Saskatchewan Telecommunications Holding Corporation4		-		1,219,973		1,219,973		-		1,107,256		1,107,256
Municipal Financing Corporation of Saskatchewan4		92,331		137,687		230,018		93,515		109,990		203,505
Boards of Education		149,961		-		149,961		159,050		-		159,050
Liquor and Gaming Authority4		-		94,957		94,957		-		99,225		99,225
Saskatchewan Health Authority		76,246		-		76,246		101,403		-		101,403
Saskatchewan Water Corporation4		-		75,341		75,341		-		76,347		76,347
Saskatchewan Opportunities Corporation		50,089		-		50,089		51,673		-		51,673
Global Transportation Hub Authority		43,910		-		43,910		43,420		-		43,420
Water Security Agency		20,025		-		20,025		25,896		-		25,896
Health Sector Affiliates		8,476		-		8,476		9,657		-		9,657
Saskatchewan Housing Corporation		-		-		-		5,100		-		5,100
Other		1,669		4,988		6,657		5,884		-		5,884
Total5		14,481,477		9,101,606		23,583,083		12,199,259		9,132,257		21,331,516

¹  General debt and government business enterprise specific debt are presented net of sinking funds (see footnote 5).

²  General debt includes $23.0 million (2020 - $33.3 million) secured primarily by assets with a carrying value of $111.0 million (2020 - $120.9 million).

³  General Revenue Fund - Saskatchewan Capital Plan consists of amounts borrowed by the General Revenue Fund to finance investment in capital assets as presented in the Saskatchewan Provincial Budget.

⁴  Government business enterprise (GBE) public debt includes both general debt and GBE specific debt. General debt of GBEs represents amounts transferred from the General Revenue Fund and recorded as loans receivable (schedule 2). GBE specific debt represents debt issued by, or specifically on behalf of, GBEs.

Schedule 3 provides information on GBEs as presented in their audited financial statements closest to March 31, 2021. The public debt reported above is lower than the gross debt, net of sinking funds, reported on schedule 3 by $85.5 million (2020 - $2.0 million) mainly to conform to Canadian public sector accounting standards and for transactions occurring from the audited financial statements to March 31, 2021.

70  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Public Debt (continued) Schedule 8

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

	2021
	Gross Debt a		Sinking Funds			Public Debt
			(schedule 9)
General Revenue Fund
Operating		8,048,554		(848,553	)		7,200,001
Saskatchewan Capital Plan		6,999,780		(309,448	)		6,690,332
Saskatchewan Power Corporation		6,995,473		(866,623	)		6,128,850
SaskEnergy Incorporated		1,724,849		(136,602	)		1,588,247
Saskatchewan Telecommunications Holding Corporation		1,304,892		(84,919	)		1,219,973
Municipal Financing Corporation of Saskatchewan		245,318		(15,300	)		230,018
Boards of Education		149,961		-			149,961
Liquor and Gaming Authority		94,957		-			94,957
Saskatchewan Health Authority		76,246		-			76,246
Saskatchewan Water Corporation		88,892		(13,551	)		75,341
Saskatchewan Opportunities Corporation		55,229		(5,140	)		50,089
Global Transportation Hub Authority		43,910		-			43,910
Water Security Agency		20,025		-			20,025
Health Sector Affiliates		8,476		-			8,476
Other		6,657		-			6,657
Public Debt		25,863,219		(2,280,136	)		23,583,083

                ^a The average effective interest rate on gross debt was 3.5 per cent (2020 - 3.9 per cent) and includes the impact of foreign exchange and the amortization of any premiums or discounts associated with the debentures. The average term to maturity of gross debt is 15.8 years (2020 - 15.8 years).

The payment schedule for gross debt is as follows:

	2021		2020
Year of Maturity
Short-term promissory notes	1,509,242		2,397,712
2020-21	-		1,665,189
2021-22	391,043		285,541
2022-23	514,654		516,969
2023-24	879,808		79,523
2024-25	1,317,465		1,017,548
2025-26	1,445,771		-
6-10 years	5,521,051		4,345,866
Thereafter	14,284,185		13,467,894
Gross debt a	25,863,219		23,776,242
Sinking funds	(2,280,136	)	(2,444,726	)
Public Debt	23,583,083		21,331,516

                ^a Gross debt includes Canada Pension Plan debentures of $635.6 million (2020 - $711.2 million). These debentures are callable in whole or in part before maturity, at the option of the Minister of Finance of Saskatchewan.

Government of Saskatchewan Public Accounts 2020-21  71

Summary Financial Statements

Sinking Funds As at March 31, 2021 (thousands of dollars) Schedule 9

	2020		2021
	Sinking										Sinking
	Funds		Contributions1		Earnings2		Redemptions3				Funds
General Revenue Fund
Operating		1,065,600		55,967		42,544		(315,558	)	��		848,553
Saskatchewan Capital Plan		197,088		106,000		6,360		-				309,448
Saskatchewan Power Corporation		823,069		62,751		23,154		(42,351	)			866,623
SaskEnergy Incorporated		131,769		12,911		3,993		(12,071	)			136,602
Saskatchewan Telecommunications Holding Corporation		193,196		14,666		10,987		(133,930	)			84,919
Municipal Financing Corporation of Saskatchewan		13,080		1,856		364		-				15,300
Saskatchewan Water Corporation		11,039		2,217		295		-				13,551
Saskatchewan Housing Corporation		5,236		-		129		(5,365	)			-
Saskatchewan Opportunities Corporation		4,649		367		124		-				5,140
Total Sinking Funds4		2,444,726		256,735		87,950		(509,275	)			2,280,136

¹  Annual contributions, established by Order in Council, are typically set at a minimum of either one or two per cent of debentures outstanding. The aggregate amount of contributions estimated to be required in each of the next five years and thereafter to meet sinking fund requirements by debt classification (see footnote 4) are as follows:

	2022		2023		2024		2025		2026		Thereafter		Total
General debt		196,701		196,384		195,376		187,252		187,252		2,951,931		3,914,896
Government business enterprise specific debt		87,954		85,554		82,873		81,250		81,070		1,403,251		1,821,952
Total Sinking Fund Contributions		284,655		281,938		278,249		268,502		268,322		4,355,182		5,736,848

²  Sinking fund earnings include gains on investment sales of $12.1 million (2020 - $13.5 million).

³  Redemptions are based on the market value of the sinking fund units at the date of redemption.

⁴  Total sinking funds, with a market value of $2,267.3 million (2020 - $2,515.9 million), are segregated by debt classification as follows:

	2020		2021
	Sinking									Sinking
	Funds		Contributions		Earnings		Redemptions			Funds
General debt		1,303,231		165,084		49,981		(320,924	)		1,197,372
Government business enterprise specific debt		1,141,495		91,651		37,969		(188,351	)		1,082,764
Total Sinking Funds		2,444,726		256,735		87,950		(509,275	)		2,280,136
Sinking fund assets have been invested as follows:
							2021			2020
Long-term investmentsa in securities of:
Governments of other provinces (coupon interest range 1.4 to 9.6 per cent; maturing in 0.2 to 29.6 years)								910,893			1,363,757
Government of Canada (coupon interest range 0.3 to 4.0 per cent; maturing in 0.2 to 30.7 years)								479,017			295,982
Government of Saskatchewan (coupon interest range 2.7 to 9.6 per cent; maturing in 0.9 to 29.2 years)								313,765			363,534
Cash, short-term investments and accrued interest								576,461			421,453
Total Sinking Funds								2,280,136			2,444,726

^a  The average yield to maturity on long-term investments at March 31, 2021 was 2.1 per cent (2020 - 2.3 per cent).

72  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Obligations Under Long-Term Financing Arrangements As at March 31, 2021 (thousands of dollars) Schedule 10

	Contract End		Discount
	Date		Rate		2021		2020
Regina Bypass		October 2049		3.10%		838,000		855,955
Elementary Schools		June 2047		3.05%		267,603		273,507
Saskatchewan Hospital North Battleford		May 2048		3.25%		223,805		228,856
Swift Current Long-Term Care Facility		April 2046		3.50%		111,269		114,023
Total Obligations Under Long-Term Financing Arrangements						1,440,677		1,472,341

The Government is party to public private partnership (P3) contracts through which private sector proponents design, build, finance, operate and maintain certain of the Government’s tangible capital assets.

The payment schedule for P3 financing is as follows:

	2021								2020
				Contractual
				Obligation for Future
				Operation,
				Maintenance & Life
	Obligation1			Cycle Rehabilitation2		Total			Total
2020-21		-			-		-			105,398
2021-22		82,772			24,060		106,832			106,987
2022-23		77,841			24,586		102,427			102,574
2023-24		77,841			24,988		102,829			102,978
2024-25		77,841			25,640		103,481			103,574
2025-26		77,841			26,104		103,945			-
Thereafter		1,755,831			1,030,265		2,786,096			2,896,242
		2,149,967			1,155,643		3,305,610			3,417,753
Less interest costs		(709,290	)		-		(709,290	)		(754,936	)
Total		1,440,677			1,155,643		2,596,320			2,662,817

¹  Represents the liability recorded for the capital portion of the project (as reported above).

²  Represents the contractual obligation (as reported in note 9) for operation, maintenance and life cycle rehabilitation payments for the duration of the contract. Total future payments for these contractual obligations, by project, are as follows:

	2021		2020
Regina Bypass		687,903		709,134
Elementary Schoolsa		249,986		259,439
Saskatchewan Hospital North Battleford		144,530		146,962
Swift Current Long-Term Care Facility		73,224		74,941
Total		1,155,643		1,190,476
a  Includes $4.9 million (2020 - $9.5 million) for construction & acquisition of relocatable classrooms.

Government of Saskatchewan Public Accounts 2020-21  73

Summary Financial Statements

Other Liabilities As at March 31, 2021 (thousands of dollars) Schedule 11

	2021		2020
Unamortized debt-related costs1		264,557		124,321
Funds held on behalf of others2		173,449		180,916
Capital leases3		46,242		52,764
Other		27,906		28,212
Total Other Liabilities		512,154		386,213

¹ Unamortized debt-related costs include:

	2021			2020
Net premiuma		323,421			176,120
Debt issue costsa		(57,730	)		(49,531	)
Foreign exchange lossb		(1,134	)		(2,268	)
Unamortized Debt-related Costs		264,557			124,321

a Combined net change in net premium and debt issue costs is reported in operating activities on the Statement of Cash Flow as increase in unamortized debt-related costs in net change in non-cash operating activities (schedule 17).

b Net foreign exchange loss is reported in operating activities on the Statement of Cash Flow as an other non-cash item included in deficit (schedule 17).

²Includes $30.3 million (2020 - $46.4 million) for government business enterprises.

³The payment schedule for capital leases is as follows:

	2021			2020
2020-21		-			16,820
2021-22		13,251			11,697
2022-23		11,555			9,621
2023-24		8,708			8,016
2024-25		6,494			6,215
2025-26		5,550			-
Thereafter		32,709			38,315
		78,267			90,684
Less interest and executory costs		(32,025	)		(37,920	)
Capital Leasesa		46,242			52,764
a  Capital leases bear interest at rates up to 13.9 per cent (2020 - up to 13.9 per cent) and have expiry dates up to 11.6 years (2020 - up to 12.6 years).

74  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Tangible Capital Assets As at March 31, 2021 (thousands of dollars) Schedule 12

	2021															2020
	Land,			Roads,						Office
	Buildings &			Bridges &			Transportation			Equipment &
	Improve-			Water			& Operating			Information
	ments			Management			Equipment			Technology			Total			Total
Estimated useful life (in years)		2 - indefinite			5-100			2-40			2-25
Opening Net Book Value of Tangible Capital Assets		5,573,017			5,473,342			513,344			299,093			11,858,796			11,756,122
Opening cost		9,862,599			8,423,127			1,866,238			1,041,282			21,193,246			20,660,065
Adjustments1		(11,460	)		(15,925	)		(4,139	)		(1,868	)		(33,392	)		(119,949	)
Acquisitions		178,155			445,338			134,189			79,419			837,101			843,024
Write-downs		(61	)		(985	)		(95	)		(7,795	)		(8,936	)		(46,900	)
Disposals		(25,867	)		(46,365	)		(67,291	)		(42,284	)		(181,807	)		(142,994	)
Closing Cost2 3		10,003,366			8,805,190			1,928,902			1,068,754			21,806,212			21,193,246
Opening accumulated amortization		4,289,582			2,949,785			1,352,894			742,189			9,334,450			8,903,943
Annual amortization		236,938			227,437			95,056			70,775			630,206			597,072
Write-downs		(7	)		(102	)		(9	)		(2,142	)		(2,260	)		(35,399	)
Disposals		(23,655	)		(46,365	)		(61,935	)		(41,502	)		(173,457	)		(131,166	)
Closing Accumulated Amortization		4,502,858			3,130,755			1,386,006			769,320			9,788,939			9,334,450
Closing Net Book Value of Tangible Capital Assets4		5,500,508			5,674,435			542,896			299,434			12,017,273			11,858,796

Tangible capital assets exclude capital assets recognized by government business enterprises (schedule 3).

¹  Adjustments consist of a reduction of $32.4 million (2020 - $75.0 million) to opening cost for provincial sales tax capitalized in previous years (note 11) and a $1.0 million (2020 - $44.9 million) recovery for realized utility savings during the construction period on the Regina Bypass P3 project.

²  Includes work in progress of $318.4 million (2020 - $315.6 million).

³  Includes the Government’s $29.5 million (2020 - $29.5 million) share in the North Central Shared Facility partnership.

⁴  Includes tangible capital assets acquired under public private partnerships (P3 assets) and leased tangible capital assets (leased TCAs) as follows:

	2021												2020
	Land,		Roads,					Office
	Buildings &		Bridges &			Transportation		Equipment &
	Improve-		Water			& Operating		Information
	ments		Management			Equipment		Technology		Total			Total
													(Restated)
P3 Assets
Opening cost		946,383		1,569,980			-		-		2,516,363			2,478,095
Adjustments a		-		(1,000	)		-		-		(1,000	)		(44,931	)
Acquisitions		4,809		3,677			-		-		8,486			83,199
Closing cost		951,192		1,572,657			-		-		2,523,849			2,516,363
Closing accumulated amortization		64,078		38,053			-		-		102,131			61,132
Closing Net Book Value		887,114		1,534,604			-		-		2,421,718			2,455,231
Leased TCAs
Closing cost		48,922		-			16,794		47,262		112,978			115,810
Closing accumulated amortization		21,640		-			7,665		38,777		68,082			62,798
Closing Net Book Value		27,282		-			9,129		8,485		44,896			53,012
a  Adjustments represent a recovery for realized utility savings during the construction period on the Regina Bypass P3 project.

Government of Saskatchewan Public Accounts 2020-21  75

Summary Financial Statements

Revenue For the Year Ended March 31, 2021 (thousands of dollars) Schedule 13

	2021				2020
	Budget		Actual		Actual
Own-Source
Taxation
Individual income		2,605,400		2,463,322		2,629,064
Provincial sales		1,996,000		2,100,523		2,205,842
Property		767,100		778,967		773,973
Fuel		444,000		441,696		507,878
Corporation income		780,900		440,134		787,451
Tobacco		187,700		204,255		206,794
Other1		421,700		453,077		442,270
Total Taxation		7,202,800		6,881,974		7,553,272
Non-Renewable Resources
Potash		469,400		421,619		554,426
Oil and natural gas		175,100		378,184		667,791
Resource surcharge		252,400		263,145		413,344
Crown land sales		12,500		6,652		17,127
Other		88,000		38,174		97,610
Total Non-Renewable Resources2		997,400		1,107,774		1,750,298
Net Income from Government Business Enterprises
(schedule 3)		728,800		1,278,141		855,369
Other Own-Source
Fees3		1,043,000		1,183,916		1,200,173
Insurance		277,600		273,686		279,282
Investment		105,700		151,067		118,644
Transfers from other governments		72,200		81,954		77,509
Miscellaneous4		434,600		432,328		462,784
Total Other Own-Source		1,933,100		2,122,951		2,138,392
Total Own-Source		10,862,100		11,390,840		12,297,331
Transfers from the Federal Government
Canada Health Transfer		1,301,900		1,296,516		1,262,739
Canada Social Transfer		467,100		465,196		456,202
Other5		1,017,600		1,371,357		870,865
Total Transfers from the Federal Government		2,786,600		3,133,069		2,589,806
Total Revenue		13,648,700		14,523,909		14,887,137

¹  Includes $158.8 million (2020 - $159.6 million) for corporate capital tax; $155.7 million (2020 - $151.4 million) for insurance premium tax; and $93.3 million (2020 - $91.6 million) for liquor consumption tax.

²  Includes taxes of $351.9 million (2020 - $505.8 million).

³  Includes $250.6 million (2020 - $280.7 million) for health care; $199.3 million (2020 - $204.3 million) for motor vehicle licensing; $150.6 million (2020 - $166.5 million) for education; $106.7 million (2020 - $109.1 million) for subsidized housing rental; and $102.8 million (2020 - $104.5 million) for real property sales and leases.

⁴  Includes $79.6 million (2020 - $93.9 million) for donations; $72.6 million (2020 - $61.9 million) for lottery profits; and $13.1 million (2020 - $12.6 million) for reversals of prior year expenses.

⁵  Includes $216.7 million (2020 - $224.9 million) for crop insurance; $179.0 million (2020 - $177.5 million) for infrastructure; $99.9 million (2020 - $79.9 million) for labour market initiatives; and $60.9 million (2020 - $82.2million) for agricultural income stability. Additionally, included for 2020-21 is COVID-related funding, largely comprised of: $338.1 million to protect the health of Canadians; $74.9 million for pandemic-response supports in schools; $65.9 million for an economic stimulus program to accelerate the reclamation of inactive wells; and $53.2 million to temporarily top-up wages for essential workers.

76  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Expense by Object For the Year Ended March 31, 2021 (thousands of dollars) Schedule 14

	2021		2020
Salaries and benefits		6,771,234		6,770,919
Transfers1		4,894,993		4,520,424
Operating costs		2,583,112		2,592,957
Financing charges (schedule 15 )		720,829		674,967
Amortization of tangible capital assets (schedule 12 )		630,206		597,072
Other		50,568		50,123
Total Expense		15,650,942		15,206,462

¹  Includes capital transfers of $426.4 million (2020 - $261.8 million).

Financing Charges For the Year Ended March 31, 2021 (thousands of dollars) Schedule 15

	2021		2020
Interest costs
General debt1		480,514		452,726
Pension liabilities (note 5 )		188,600		173,880
Obligations under long-term financing arrangements		45,646		31,058
Other costs		6,069		17,303
Total Financing Charges		720,829		674,967

¹  Interest on general debt is presented net of $411.5 million (2020 - $410.2 million) in interest reimbursed by government business enterprises for debt borrowed by the General Revenue Fund specifically on their behalf.

Government of Saskatchewan Public Accounts 2020-21  77

Summary Financial Statements

Segmented Reporting

For the Year Ended March 31, 2021

(thousands of dollars)

											Social Services and						Protection of Persons
	Health				Education						Assistance						and Property
	2021		2020		2021			2020			2021			2020			2021		2020
Revenue
Taxation		-		-		125,638			124,838			-			-			-		-
Non-renewable resources		-		-		-			-			-			-			-		-
Net income from government business enterprises (schedule 3)		-		-		-			-			-			-			-		-
Revenue from government entities		13,262		15,660		-			-			-			-			240		-
Other own-source		403,533		452,327		259,987			285,135			110,107			118,899			62,693		61,302
Transfers from the federal government		5,564		7,277		17,211			18,372			51,372			50,205			4,378		4,374
Total Revenue (schedule 13 )		422,359		475,264		402,836			428,345			161,479			169,104			67,311		65,676
Expense
Salaries and benefits3		3,750,968		3,413,000		1,849,863			2,067,409			166,673			166,025			349,439		327,434
Transfers		1,337,962		1,461,500		749,586			723,191			1,078,432			1,081,719			264,627		266,059
Operating costs		1,086,851		1,021,393		542,621			572,069			177,825			169,445			181,681		171,916
Financing charges3 (schedule 15 )		-		-		-			-			-			-			-		-
Amortization of tangible capital assets (schedule 12 )		151,503		144,055		135,541			136,126			19,650			20,692			19,391		19,230
Other		10,779		11,410		12,526			16,280			10,507			3,177			4,571		4,595
Total expense by segment		6,338,063		6,051,358		3,290,137			3,515,075			1,453,087			1,441,058			819,709		789,234
Eliminations2		-		-		(13,262	)		(13,513	)		(4,710	)		(4,710	)		-		(2,147	)
Total Expense3 (schedule 14 )		6,338,063		6,051,358		3,276,875			3,501,562			1,448,377			1,436,348			819,709		787,087

The segments are based on the major functional groupings of activities, or themes, used in the Statement of Operations, which reflects the accountability and reporting framework set out by the Government in the Budget. Schedule 18 identifies the entities included in each theme.

¹  Other includes the economic development, general government and the environment and natural resources themes. Revenue includes all public monies paid into the General Revenue Fund as well as net income from government business enterprises.

²  Represents adjustments to eliminate transactions between segments. Adjustments to eliminate transactions within a segment and adjustments to conform to the Government’s accounting policies are represented within each segment.

³  Includes a total of $253.0 million (2020 - $653.1 million) for pension expense as follows:

	Health				Education					Other					Total
	2021		2020		2021			2020		2021			2020		2021		2020
Salaries and benefits		196,783		193,552		(127,682	)		139,741		(4,675	)		145,935		64,426		479,228
Financing charges (schedule 15 )		-		-		-			-		188,600			173,880		188,600		173,880
Total pension expense (recovery) (note 5 )		196,783		193,552		(127,682	)		139,741		183,925			319,815		253,026		653,108

78  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Schedule 16

Development Community						Transportation					Agriculture						Other1						Eliminations2						Total
2021			2020			2021			2020		2021			2020			2021			2020			2021			2020			2021		2020
	4,809			5,072			-			-		-			-			6,751,527			7,423,362			-			-			6,881,974		7,553,272
	-			-			-			-		-			-			1,107,774			1,750,298			-			-			1,107,774		1,750,298
	-			-			-			-		-			-			1,278,141			855,369			-			-			1,278,141		855,369
	-			-			-			-		4,466			36,288			34,138			37,087			(52,106	)		(89,035	)		-		-
	105,655			88,603			5,178			505		261,082			267,755			914,716			857,986			-			5,880			2,122,951		2,138,392
	1,846			2,971			-			-		249,603			278,182			2,803,095			2,228,425			-			-			3,133,069		2,589,806
	112,310			96,646			5,178			505		515,151			582,225			12,889,391			13,152,527			(52,106	)		(83,155	)		14,523,909		14,887,137
	33,769			32,215			79,627			77,084		64,731			67,988			476,164			619,764			-			-			6,771,234		6,770,919
	721,003			568,187			136,790			96,579		198,827			232,635			425,384			109,058			(17,618	)		(18,504	)		4,894,993		4,520,424
	36,269			35,316			180,617			173,339		260,493			329,763			127,289			129,307			(10,534	)		(9,591	)		2,583,112		2,592,957
	-			-			-			-		-			-			725,295			711,255			(4,466	)		(36,288	)		720,829		674,967
	7,419			7,102			222,408			196,777		3,595			2,998			70,699			70,092			-			-			630,206		597,072
	454			3,999			1,024			1,712		(1,712	)		1,994			12,419			6,956			-			-			50,568		50,123
	798,914			646,819			620,466			545,491		525,934			635,378			1,837,250			1,646,432			(32,618	)		(64,383	)		15,650,942		15,206,462
	(6,327	)		(5,384	)		(3,613	)		-		-			(2,341	)		(4,706	)		(36,288	)		32,618			64,383			-		-
	792,587			641,435			616,853			545,491		525,934			633,037			1,832,544			1,610,144			-			-			15,650,942		15,206,462

Government of Saskatchewan Public Accounts 2020-21  79

Summary Financial Statements

Supplemental Cash Flow Information	Schedule 17
For the Year Ended March 31, 2021
(thousands of dollars)

	2021			2020
Other Non-Cash Items Included in the Deficit
Amortization of tangible capital assets (schedule 12 )		630,206			597,072
Write-downs of tangible capital assets (schedule 12 )		6,676			11,501
Net gain on disposal of tangible capital assets		(16	)		(6,076	)
Net loss on adjustments to tangible capital assets (schedule 12)		1,000			44,931
Net increase to provision for loss on accounts receivable and loans receivable		30,810			18,085
Net (gain) loss on other investments1		(39,508	)		3,298
Earnings retained in sinking funds (schedule 9 )		(49,981	)		(38,026	)
Net foreign exchange loss		1,134			4,217
Total Other Non-Cash Items Included in the Deficit		580,321			635,002
Net Change in Non-Cash Operating Activities
(Increase) decrease in accounts receivable		(112,231	)		165,571
Decrease in other financial assets		8			2,275
Increase (decrease) in accounts payable and accrued liabilities		145,545			(236,964	)
Increase in unearned revenue		347,504			30,856
Decrease in pension liabilities		(576,476	)		(170,226	)
Increase in unamortized debt-related costs		139,102			117,759
Increase in inventories held for consumption		(53,883	)		(7,654	)
Increase in prepaid expenses		(5,127	)		(3,611	)
Net Change in Non-Cash Operating Activities		(115,558	)		(101,994	)
1  Net (gain) loss on other investments consists of:

	2021		2020
(Income) loss from equities and pooled funds	(31,245	)	8,695
Gain on sale of bonds and equities	(8,218	)	(5,291	)
Amortization of bond premiums and discounts	(45	)	(106	)
Net (gain) loss on other investments	(39,508	)	3,298

Other Supplemental Information
	2021		2020
				(Restated	)
Cash interest paid during the year1		367,157		348,080
Cash interest received during the year		43,464		62,289

¹  Includes debt-related issuance costs, primarily consisting of net premiums of $165.1 million (2019-20 - $130.4 million) on debt issued during the year, which partially offset the amount of cash interest paid.

80  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Government Reporting Entity	Schedule 18
For the Year Ended March 31, 2021

The government reporting entity consists of public sector entities (entities) classified as government service organizations, government business enterprises and partnerships. The listing below reports the entities under these classifications segregated by segments which are based on functional groupings of activities, or themes.

Government Service Organizations (Consolidated) and Partnerships (Proportionately Consolidated)

Agriculture

Agricultural Credit Corporation of Saskatchewan

Crop Reinsurance Fund of Saskatchewan

Livestock Services Revolving Fund

Ministry of Agriculture

Pastures Revolving Fund

Prairie Agricultural Machinery Institute

Prairie Diagnostic Services Inc. (partnership - organization under

shared control) ^1a

Saskatchewan Agricultural Stabilization Fund

Saskatchewan Crop Insurance Corporation

Community Development

Community Initiatives Fund

Government House Foundation

Ministry of Education ^2b

Ministry of Government Relations ^2a

Ministry of Parks, Culture and Sport ^2a

Northern Municipal Trust Account ^1d

Provincial Archives of Saskatchewan

Provincial Capital Commission

Saskatchewan Arts Board

Saskatchewan Centre of the Arts Fund

Saskatchewan Heritage Foundation

Saskatchewan Lotteries Trust Fund for Sport, Culture and Recreation

Saskatchewan Snowmobile Fund

Western Development Museum Fund

Economic Development ³

Creative Saskatchewan

CIC Asset Management Inc. ^2a

CIC Economic Holdco Ltd. ⁴

First Nations and Métis Fund Inc.

Global Transportation Hub Authority

Innovation Saskatchewan

Ministry of Energy and Resources

Ministry of Environment ^2b

Ministry of Finance ^2b

Ministry of Immigration and Career Training ^2b

Ministry of Trade and Export Development

Saskatchewan Entrepreneurial Fund Joint Venture (partnership -

    45.5 per cent interest in organization under shared control) ⁴

Saskatchewan Health Research Foundation

Saskatchewan Immigrant Investor Fund Inc.

Saskatchewan Opportunities Corporation

Saskatchewan Research Council ^2a

SaskBuilds Corporation

Tourism Saskatchewan

Education

Battlefords First Nations Joint Board of Education (partnership -

organization under shared control) ^1c

Boards of Education ^1c

Chinook School Division No. 211

Christ the Teacher Roman Catholic Separate School Division

No. 212

Conseil des écoles fransaskoises no. 310

Creighton School Division No. 111

Good Spirit School Division No. 204

Holy Family Roman Catholic Separate School Division No. 140

Holy Trinity Roman Catholic Separate School Division No. 22

Horizon School Division No. 205

Ile-a-la Crosse School Division No. 112

Light of Christ Roman Catholic Separate School Division No. 16

Living Sky School Division No. 202

Lloydminster Roman Catholic Separate School Division No. 89

Lloydminster School Division No. 99

North East School Division No. 200

Northern Lights School Division No. 113

Northwest School Division No. 203

Prairie South School Division No. 210

Prairie Spirit School Division No. 206

Prairie Valley School Division No. 208

Prince Albert Roman Catholic Separate School Division No. 6

Regina Roman Catholic Separate School Division No. 81

Regina School Division No. 4

Saskatchewan Rivers School Division No. 119

Saskatoon School Division No. 13

South East Cornerstone School Division No. 209

St. Paul’s Roman Catholic Separate School Division No. 20

Sun West School Division No. 207

Ministry of Advanced Education ^2a

Ministry of Education ^2a

Ministry of Immigration and Career Training ^2a

North Central Shared Facility (partnership - 72.9 per cent interest in

assets and 69.7 per cent interest in operations under shared control)^1c

Regional Colleges ^1b

Carlton Trail College

Cumberland College

Great Plains College

Northlands College

North West College

Parkland College

Southeast College

Saskatchewan Apprenticeship and Trade Certification Commission ^1b

Government of Saskatchewan Public Accounts 2020-21  81

Summary Financial Statements

Government Reporting Entity (continued) Schedule 18

Education (continued)

Saskatchewan Polytechnic ^1b

Saskatchewan Professional Teachers Regulatory Board ^1c

Saskatchewan Student Aid Fund

Training Completions Fund

Environment and Natural Resources ³

CIC Asset Management Inc. ^2b

Commercial Revolving Fund

Fish and Wildlife Development Fund

Forest Management Funds

Carrier Forest Management Trust Fund

Crown Agricultural Land Forest Fund

Dunkley Forest Renewal Trust

Island Forests Management Fund

L&M Forest Management Trust Fund

Meadow Lake OSB Forest Management Trust Fund

Mee-Toos Forest Management Fund Trust

Mistik Forest Management Trust

North Central Trust Fund

Park Land Forests Management Fund

Sakaw Forest Renewal Trust Fund

Weyerhaeuser Forest Renewal Trust Fund

Impacted Sites Fund

Institutional Control Monitoring and Maintenance Fund

Institutional Control Unforeseen Events Fund

Ministry of Environment ^2a

Ministry of Parks, Culture and Sport ^2b

Oil and Gas Orphan Fund

Operator Certification Board

Saskatchewan Research Council^2b

Saskatchewan Technology Fund

Water Appeal Board ⁴

Water Security Agency

General Government ³

Century Plaza Condominium Corporation

Crown Investments Corporation of Saskatchewan (separate)

Extended Health Care Plan for Certain Other Employees ^1d

Extended Health Care Plan for Certain Other Retired Employees ^1d

Legislative Assembly and its Officers ^2a

Ministry of SaskBuilds and Procurement ^5a

Ministry of Finance ^2a

Ministry of Government Relations ^2b

Ministry of Highways ^{2b 5b}

Ministry of Justice and Attorney General ^2b

Office of Executive Council

Public Employees Benefits Agency Revolving Fund

Public Employees Dental Fund ^1d

Public Employees Disability Income Fund ^1d

Public Employees Group Life Insurance Fund ^1d

Public Service Commission

Queen’s Printer Revolving Fund

School Division Tax Loss Compensation Fund

Health

eHealth Saskatchewan

Health Quality Council

Health Sector Affiliates

All Nations’ Health Hospital Inc.

Bethany Pioneer Village Inc.

Circle Drive Special Care Home Inc.

Cupar and District Nursing Home Inc.

Duck Lake and District Nursing Home Inc.

Foyer St. Joseph Nursing Home Inc.

Jubilee Residences Inc.

Lakeview Pioneer Lodge Inc.

Lumsden & District Heritage Home Inc.

Lutheran Sunset Home of Saskatoon

Mennonite Nursing Homes Incorporated

Mont St. Joseph Home Inc.

Oliver Lodge

Providence Place for Holistic Health Inc.

Radville Marian Health Centre Inc.

Raymore Community Health and Social Centre

Salvation Army - William Booth Special Care Home

Santa Maria Senior Citizens Home Inc.

Saskatoon Convalescent Home

Sherbrooke Community Society Inc.

Société Joseph Breton Inc.

Spruce Manor Special Care Home Incorporated

St. Ann’s Senior Citizens Village Corporation

St. Anthony’s Hospital

St. Joseph’s Hospital (Grey Nuns) of Gravelbourg

St. Joseph’s Hospital of Estevan

St. Joseph’s Integrated Health Centre of Macklin Inc.

St. Paul Lutheran Home of Melville

St. Peter’s Hospital, Melville

Strasbourg and District Health Centre Corp.

Sunnyside Adventist Care Centre

The Border-Line Housing Company (1975) Inc.

The Qu’Appelle Diocesan Housing Company

The Regina Lutheran Housing Corporation

Ukrainian Sisters of St. Joseph of Saskatoon

Warman Mennonite Special Care Home Inc.

Ministry of Health

Saskatchewan Association of Health Organizations Inc.

Saskatchewan Cancer Agency

Saskatchewan Health Authority

Saskatchewan Impaired Driver Treatment Centre Board of Governors

82  Government of Saskatchewan Public Accounts 2020-21

Summary Financial Statements

Government Reporting Entity (continued) Schedule 18

Protection of Persons and Property

Correctional Facilities Industries Revolving Fund

Criminal Property Forfeiture Fund

Financial and Consumer Affairs Authority of Saskatchewan

Integrated Justice Services

Law Reform Commission of Saskatchewan

Legislative Assembly and its Officers ^2b

Ministry of Corrections, Policing and Public Safety ^5c

Ministry of Government Relations ^2b

Ministry of Justice and Attorney General ^2a

Ministry of Labour Relations and Workplace Safety

Saskatchewan Public Safety Agency

Sask911 Account

Victims’ Fund

Government Business Enterprises (Modified Equity)

Utility ³

Saskatchewan Power Corporation

Saskatchewan Telecommunications Holding Corporation

Saskatchewan Water Corporation

SaskEnergy Incorporated

Insurance & Financing ³

Municipal Financing Corporation of Saskatchewan ^1d

Saskatchewan Auto Fund

Saskatchewan Government Insurance

Workers’ Compensation Board (Saskatchewan) ^1d

Liquor & Gaming ³

Liquor and Gaming Authority

Saskatchewan Gaming Corporation

Social Services and Assistance

Ministry of Advanced Education ^2b

Ministry of Government Relations ^2b

Ministry of Social Services

Saskatchewan Housing Corporation ^1d

Saskatchewan Legal Aid Commission

Transportation

Ministry of Government Relations ^2b

Ministry of Highways ^{2a 5b}

Transportation Partnerships Fund

¹  The year-ends of certain entities differ from March 31, 2021: ^a April 30, 2020; ^b June 30, 2020; ^c August 31, 2020; ^d December 31, 2020.

²  Activities are allocated across more than one theme: ^a primary activity; ^b secondary activity.

³  Included in Other for segment disclosure (schedule 16).

⁴  Entity wound-up during 2020-21.

⁵  During 2020-21, Ministry’s name changed from: ^a Central Services; ^b Highways and Infrastructure; ^c Corrections and Policing.

Government of Saskatchewan Public Accounts 2020-21  83

Glossary of Terms

Glossary of Terms

Accumulated (Deficit): The amount by which expense has exceeded revenue from the beginning of incorporation (1905) plus any adjustments that were charged directly to the accumulated deficit. It is calculated as the difference between total assets and liabilities.

Accumulated Surplus: The amount by which revenue has exceeded expense from the beginning of incorporation (1905) plus any adjustments that were charged directly to the accumulated surplus. It is calculated as the difference between total assets and liabilities.

Amortization: A systematic process of allocating an amount to revenue or expense over a period of time. Capital assets are amortized to expense over their expected remaining economic life. Actuarial gains and losses, such as those experienced by pension plans, are also amortized.

Amortized Cost: The initial cost of a security adjusted for the cumulative amortization of any purchase premium or discount, less any principal repayments.

Canada Health Transfer: A federal transfer provided, on an equal per capita cash basis, to jurisdictions in support of health care.

Canada Social Transfer: A federal transfer provided, on an equal per capita cash basis, to jurisdictions in support of post-secondary education, social assistance and social services, and early childhood development, early learning and childcare.

Capital Asset: An asset with physical substance held by the Government that has an economic life extending beyond one year, to be used on a continuing basis and is not for sale in the ordinary course of operations.

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

Consolidation: The method used to account for government service organizations (GSOs) in the Summary Financial Statements (SFS) in which the accounts of GSOs are adjusted to the basis of accounting described in note 1 of the SFS and then combined. Inter-organization balances and transactions are eliminated.

Contingency: A possible right to economic resources, or obligation that results in future sacrifice of economic benefits, arising from existing conditions or situations involving uncertainty.

Contractual Obligation: An obligation to others that will become a liability in the future when the terms of contracts or agreements are met.

Contractual Right: A right to economic resources arising from contracts or agreements that will result in both an asset and revenue in the future.

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

Debt: An obligation incurred through the issuance of debt instruments. Terms used when describing debt include:

Government business enterprise (GBE) specific debt is debt issued by GBEs and debt issued by the General Revenue Fund (GRF) specifically on behalf of a GBE where the government expects to realize the receivable from the GBE and settle the external debt simultaneously.

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

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

Public debt is gross debt net of sinking funds.

General debt is public debt net of loans to Crown corporations for GBE specific debt.

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

Deficit: The amount by which expense exceeds revenue for a fiscal period.

84  Government of Saskatchewan Public Accounts 2020-21

Glossary of Terms

Derivative: A contract in which the value is based on the performance of an underlying financial asset, index or other investment. It does not require an initial investment and is settled at a future date.

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

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

Financing Charges: Costs associated with general debt, pension liabilities, obligations under long-term financing arrangements, such as public private partnerships, and capital lease obligations. Financing charges include interest, foreign exchange gains and losses, discounts, fees and commissions.

Fixed Rate: An interest rate that remains fixed either for an entire term or part of a term.

Floating Rate: An interest rate that changes on a periodic basis.

General Revenue Fund (GRF): The primary operational account for the Government through which all provincial monies under the direct authority of the Legislative Assembly are collected and disbursed.

Government Business Enterprise (GBE): An organization that is controlled by the Government, is self-sufficient and has the financial and operating authority to sell goods and services to individuals and organizations outside the government reporting entity as its principal activity. GBEs are recorded in the SFS using the modified equity method.

Government Reporting Entity: A set of organizations that are either controlled by the Government (government service organizations and government business enterprises) or subject to shared control (partnerships). Trusts administered by the Government are excluded from the government reporting entity.

Government Service Organization (GSO): An organization that is controlled by the Government, except those designated as GBEs or government partnerships. GSOs are consolidated in the SFS.

Gross Domestic Product (GDP): The standard measure of the overall size of an economy, the value of all goods and services produced during a given period.

Hedge: A strategy to minimize the risk of loss on an asset (or liability) from market fluctuations such as interest rate or foreign exchange rate changes. This is accomplished by entering into offsetting commitments with the expectation that a future change in the value of the hedging instrument will offset the change in the value of the asset (or liability).

Modified Equity: The method used to account for GBEs in the SFS. The Government’s investment, which is originally recorded at cost, is adjusted annually to include the net earnings (losses) and other net equity changes of the GBE.

Net Debt: It is the difference between liabilities and financial assets and represents the future revenue required to pay for past transactions or events.

Net Realizable Value: The selling price of an asset less any costs incurred to make the sale.

Non-Financial Asset: An asset that is acquired, constructed or developed and does not normally provide resources to discharge existing liabilities.

Other Comprehensive Income (Loss) (OCI): OCI includes certain unrealized gains and losses of GBEs that are excluded from net income but recognized as a change in net debt and accumulated surplus during the period.

Partnership: A contractual arrangement between the Government and one or more partners outside the government reporting entity where the partners share, on an equitable basis, the risks and benefits of the partnership. Partnerships are proportionately consolidated in the SFS.

Pension Liability: An actuarial estimate of discounted future payments to be made to retirees under government pension plans, net of plan assets.

Premium/Discount: The amount by which the selling price of a security is greater or less than its par or face value.

Government of Saskatchewan Public Accounts 2020-21  85

Glossary of Terms

Present Value: The current value of one or more future cash payments, determined by discounting the future cash payments using interest rates.

Proportionate Consolidation: The method used to account for partnerships in the SFS in which the accounts of partnerships are adjusted to the basis of accounting described in note 1 of the SFS and then the Government’s proportionate share are combined. Inter-organization balances and transactions are eliminated.

Public Private Partnership (P3): A method of procuring infrastructure assets under a contractual arrangement in which a private contractor: provides some or all of the financing for the project; designs and builds the project, often providing operations and maintenance for the project; and receives payments over an extended period of time.

Related Party: A related party exists when one party has the ability to exercise control or shared control over the other. Two or more parties are related when they are subject to common control or shared control. Related parties also include key management personnel, their close family members and entities controlled by, or under shared control of, any of these individuals.

Remediation: The improvement of a contaminated site to prevent, minimize or mitigate damage to human health or the environment.

Restructuring Transaction: A transfer of an integrated set of assets and/or liabilities, together with related program or operating responsibilities without consideration based primarily on the fair value of the individual assets and liabilities transferred.

Segment: A distinguishable activity or group of activities of a government for which it is appropriate to separately report financial information to help users of the SFS identify the resources allocated to support the major activities of a government.

Subsidiary: An organization that is wholly-owned or controlled by another organization.

Summary Financial Statements (SFS): The statements prepared to account for the full nature and extent of the financial activities of the Government.

Surplus: The amount by which revenue exceeds expense for a fiscal period.

Transfer: A transfer of money from a government to an individual, an organization or another government for which the government making the transfer does not: receive any goods or services directly in return, as would occur in a purchase/sale transaction; expect to be repaid, as would be expected in a loan; or expect a financial return, as would be expected in an investment.

Unrealized Foreign Exchange Gain (Loss): Potential gains and losses arise on foreign currency denominated monetary items when the exchange rate fluctuates. The unrealized foreign exchange gain (loss) represents the portion of this potential gain (loss) that has not been included in the accumulated surplus to date, but rather will be recognized over the remaining life of the monetary item.

86  Government of Saskatchewan Public Accounts 2020-21

ANNEX B—2021-22 FIRST QUARTER FINANCIAL REPORT

See attached.

B-1

2021-22 First Quarter Financial Report

Government of Saskatchewan

August 26, 2021

2021-22 First Quarter

HIGHLIGHTS

Overview

Challenges facing the agriculture sector, funding to help make child care more affordable, better-than-expected commodity prices and increased federal transfers will impact the province’s financial situation in 2021-22.

The net result is a projected deficit of $2.74 billion, up $126.5 million from budget.

Despite ongoing uncertainty around the impact of drought conditions and the lingering impacts of the pandemic, Saskatchewan’s economic performance through the first quarter is consistent with budget expectations, with aspects of the provincial economy showing strength.

Revenue

Revenue is forecast to increase from budget by $757.3 million (5.2 per cent).

$359.9 million of this revenue increase is from non-renewable resources—primarily due to higher oil and potash prices.

Federal transfers are up $401.1 million from budget, including $131.6 million for early learning and child care, $124.1 million for Saskatchewan’s share of the Helping Our Health Systems Recover program and $62.6 million in one-time top-up funding for the Canada Community-Building Fund.

Expense

Total expense is up $883.8 million (5.2 per cent) from budget.

$706.6 million of that increase is due to pressures in the agriculture sector, along with increases of $131.6 million for early learning and child care, and $62.6 million for municipalities.

This is partly offset by a forecast $44.4 million decrease in pension expense.

Debt

Public debt is forecast to be $90.7 million higher than budget, primarily due to higher General Revenue Fund (GRF) operating debt due to the increase in the operating deficit resulting from higher agriculture support payments, offset partially by higher expected revenue from resource royalties.

Economy

According to private-sector forecasters, Saskatchewan’s real GDP is now expected to grow by 5.6 per cent in 2021 and by 3.8 per cent in 2022.

Employment in the first seven months of 2021 increased by 15,029 or 2.8 per cent compared to the first seven months of 2020, and Saskatchewan’s unemployment rate dropped from an average of 9.4 per cent to 7.3 per cent, fourth lowest among the provinces.

2021-22 First Quarter Financial Report                            page 1                            

 

  2021-22 BUDGET UPDATE - FIRST QUARTER

(Millions of Dollars)	Budget		First Quarter Forecast		Change
Revenue
Taxation		7,238.0		7,238.0		-
Non-renewable resources		1,328.5		1,688.4		359.9
Net income from government business enterprises		899.2		850.9		(48.3)
Other own-source revenue		2,104.1		2,148.7		44.6
Transfers from the federal government		2,908.5		3,309.6		401.1
Total Revenue		14,478.3		15,235.6		757.3
Expense
Agriculture		879.3		1,585.9		706.6
Community development		690.4		753.0		62.6
Economic development		527.0		540.3		13.3
Education		3,753.2		3,867.1		113.9
Environment and natural resources		414.9		414.9		-
Financing charges		755.0		755.0		-
General government		524.6		499.9		(24.7)
Health		6,535.3		6,535.3		-
Protection of persons and property		845.1		857.2		12.1
Social services and assistance		1,556.7		1,556.7		-
Transportation		607.7		607.7		-
Total Expense		17,089.2		17,973.0		883.8
Deficit		(2,610.9)		(2,737.4)		(126.5)

2021-22 First Quarter Financial Report                            page 2                            

 

REVENUE UPDATE

At first quarter, revenue is forecast to be $757.3 million (5.2 per cent) higher than budget.

Non-Renewable Resources

Forecast revenue from non-renewable resources is up nearly $360 million from budget, primarily due to higher oil and potash revenue.

Oil and natural gas revenue is expected to be nearly $205 million higher, primarily due to higher West Texas Intermediate (WTI) oil prices, a narrower light-heavy oil price differential and an increase in oil production, partly offset by a higher average exchange rate forecast.

Potash revenue is expected to be $149 million higher, primarily due to higher average prices (US$231 per KCl tonne, up US$40 from budget), partly offset by a higher exchange rate.

In addition, the First Quarter Financial Report includes a $10 million increase in the resource surcharge, reflecting higher-than-budgeted oil and potash value of sales forecasts, and a $3 million increase in Crown land sales, reflecting a higher-than-expected April subsurface mineral rights sale.

The forecast increase in non-renewable resource revenue is partly offset by a $7 million decrease in other non-renewable resources revenue—including uranium, coal and other minerals—primarily due to the larger-than-budgeted impact of the Cigar Lake mine closure on uranium royalties.

Key Assumptions

WTI

WTI is now forecast to average US$68.04 per barrel in 2021-22, up from US$54.33 at budget. WTI averaged US$67.66 from April to the end of July. A US$1 per barrel change in the fiscal-year average WTI oil price results in an estimated $14 million change in 2021-22 oil royalties (all else being equal).

Oil Differential and Production

The light-heavy oil differential forecast at first quarter is 13.3 per cent, down from 19.7 per cent at budget. A lower differential results in higher oil revenue for Saskatchewan (all else being equal). Oil production is forecast to be 163.1 million barrels at first quarter, up from 160.0 million barrels at budget.

Exchange Rate

The exchange rate is now forecast to average 82.2 U.S. cents in 2021-22, up from 79.1 U.S. cents at budget. From April through the end of July, the Canadian dollar averaged 81.0 U.S. cents. A 1 U.S. cent change in the fiscal-year average exchange rate results in an estimated $28 million change in 2021-22 non-renewable resource revenue (all else being equal). A lower exchange rate results in higher revenue and a higher exchange rate results in lower revenue, as resource exports are priced in US dollars.

2021-22 NON-RENEWABLE RESOURCES FORCAST ASSUMPTIONS

	2020-21 Actual		2021-22 Budget		First Quarter		Change
WTI Oil Price (US$/barrel)		42.32		54.33		68.04		13.71
Light-Heavy Differential (% of WTI)		16.9		19.7		13.3		(6.4)
Well-head Oil Price (C$/barrel)1		36.54		49.31		65.41		16.10
Oil Production (million barrels)		152.5		160.0		163.1		3.1
Potash Price (mine netback, US$/KCl tonne)2		180		191		231		40
Potash Price (mine netback, C$/K2O tonne)2		390		396		465		69
Potash Sales (million K2O tonnes)2		14.1		14.3		14.1		(0.2)
Canadian Dollar (US cents)		75.75		79.12		82.17		3.05

  ¹ The average price per barrel of Saskatchewan light, medium and heavy oil.

  ² Ministry of Finance calculations derived from calendar-year forecasts.

2021-22 First Quarter Financial Report                            page 3                            

 

Federal Transfers

Transfers from the federal government are forecast to be up $401.1 million from budget, largely due to:

• $131.6 million for Saskatchewan’s share of the Canada-wide Early Learning and Child Care Agreement and the Early Learning and Child Care one-time workforce investment;

• $124.1 million for Saskatchewan’s share of the Helping Our Health Systems Recover program;

• $62.6 million in one-time top-up funding for the Canada Community-Building Fund;

• $31.2 million increase due to a higher federal portion of Crop Insurance premiums as a result of an increase in insured acres and higher prices; and

• $31.0 million for Saskatchewan’s share of Canada’s COVID-19 Immunization Plan.

Government Business Enterprises (GBEs) Net Income

Net income from GBEs is forecast to be down $48.3 million from budget reflecting reductions of:

• $18.2 million at SaskPower, primarily due to higher operating costs, partially offset by higher electricity sales;

• $14.7 million at SaskEnergy, mainly reflecting lower natural gas sales and lower profit margins; and

• $11.2 million at the Workers’ Compensation Board, mainly due to higher claims costs, partially offset by higher investment income.

Other net changes across the GBE sector amount to a decrease of $4.2 million.

Other Own-Source Revenue

Other own-source revenue is forecast to be up $44.6 million from budget, due to a $34.6 million increase in insurance revenue (mainly due to higher Crop Insurance producer premiums as a result of an increase in insured acres and higher prices) and a $10.0 million increase in forestry fee revenue.

Taxation

The forecast for taxation revenue is unchanged from budget. Forecasts will be updated at mid-year when more data is available.

2021-22 First Quarter Financial Report                            page 4                            

 

2021-22 SCHEDULE OF REVENUE

(Millions of Dollars)	Budget	First Quarter Forecast	Change
Taxation
Corporation income	754.6	754.6	-
Fuel	477.9	477.9	-
Individual income	2,420.8	2,420.8	-
Property	784.8	784.8	-
Provincial sales	2,144.0	2,144.0	-
Tobacco	201.8	201.8	-
Other	454.1	454.1	-
Total Taxation	7,238.0	7,238.0	-
Non-Renewable Resources
Crown land sales	9.2	12.1	2.9
Oil and natural gas	505.1	710.0	204.9
Potash	431.8	581.1	149.3
Resource surcharge	302.6	312.6	10.0
Other	79.8	72.6	(7.2)
Total Non-Renewable Resources	1,328.5	1,688.4	359.9
Net Income from Government Business Enterprises
Municipal Financing Corporation	1.1	1.1	-
Saskatchewan Auto Fund	192.1	192.1	-
Saskatchewan Gaming Corporation	11.5	6.0	(5.5)
Saskatchewan Government Insurance	40.0	40.0	-
Saskatchewan Liquor and Gaming Authority	423.4	428.9	5.5
Saskatchewan Power Corporation	16.7	(1.5)	(18.2)
Saskatchewan Telecommunications Holding Corporation	100.0	100.0	-
Saskatchewan Water Corporation	7.0	7.1	0.1
SaskEnergy Incorporated	49.7	35.0	(14.7)
Saskatchewan Workers’ Compensation Board	(1.3)	(12.5)	(11.2)
Consolidation adjustments	59.0	54.7	(4.3)
Total Net Income from Government Business Enterprises	899.2	850.9	(48.3)
Other Own-Source Revenue
Fees	1,170.0	1,180.0	10.0
Insurance	282.7	317.3	34.6
Investment income	88.4	88.4	-
Transfers from other governments	73.2	73.2	-
Miscellaneous	489.8	489.8	-
Total Other Own-Source Revenue	2,104.1	2,148.7	44.6
Transfers from the Federal Government
Canada Health Transfer	1,330.4	1,330.4	-
Canada Social Transfer	477.4	477.4	-
Other	1,100.7	1,501.8	401.1
Total Transfers from the Federal Government	2,908.5	3,309.6	401.1
Total Revenue	14,478.3	15,235.6	757.3

2021-22 First Quarter Financial Report                            page 5                            

 

EXPENSE UPDATE

��

At first quarter, total expense is forecast to be $883.8 million (5.2 per cent) higher than budgeted.

The increase in expense is primarily due to an additional $706.6 million in agriculture. This includes a $588 million increase to expected Crop Insurance indemnities resulting from the impact of drought conditions (bringing the total indemnity forecast this year to $1.1 billion). It also includes $119 million through the AgriRecovery program, to help producers maintain breeding stock and address the high costs they face due to current drought conditions.

Education expense is forecast to increase by $113.9 million, including $131.6 million to help make child care more affordable and increase support for early childhood educators, partially offset by a $17.7 million decrease in pension expense for the Teachers Superannuation Plan.

There is also a $62.6 million increase in community development related to the Canada Community-Building Fund announced in March 2021 by the federal government.

In addition, economic development expense is now forecast to be $13.3 million higher than budgeted, primarily due to increased payments through the Small Business Emergency Payment program.

Protection of persons and property expense is forecast to be $12.1 million higher than budgeted, primarily due to increased costs incurred by the Saskatchewan Public Safety Agency for response activities related to wildfires in Northern Saskatchewan.

Expense for general government is forecast to be $24.7

million lower than budgeted primarily due to a $26.7 million decrease in pension expense for the Public Service Superannuation Plan offset partially by $2.0 million to the Federation of Sovereign Indigenous Nations to support research into undocumented deaths and burials on formerly federally operated residential school locations in Saskatchewan.

All other expense themes are forecast to be on budget.

PUBLIC DEBT UPDATE

At first quarter, public debt is now forecast to be $27.9 billion at March 31, 2022, which is $90.7 million higher than budgeted.

The increase in forecast public debt from budget is primarily attributable to $125.0 million of higher GRF operating debt and $87.6 million of incremental debt at SaskTel, partially offset by $102.7 million of lower debt at SaskPower.

The higher forecast GRF operating debt pertains to the increase in the operating deficit resulting from higher agriculture support payments partially offset by higher expected revenue from resource royalties.

The additional debt at SaskTel is due to obligations arising from the recently completed 5G spectrum auction.

The lower forecast debt at SaskPower is largely due to lower-than-expected cash needs on contracts that hedge the price of natural gas, and lower-than-expected carbon tax obligations for 2019 and 2020 due to maximizing lower emission power generation, as well as timing differences with respect to 2021 carbon tax obligations.

Debt charges are unchanged from budget at $755 million.

2021-22 PUBLIC DEBT UPDATE -FIRST QUARTER

As at March 31   (Millions of Dollars)	Budget	First Quarter Forecast	Change
General Revenue Fund
- Operating	9,400.0	9,525.0	125.0
- Saskatchewan Capital Plan	8,142.0	8,142.0	-
Other Government Service Organizations	313.4	309.9	(3.5)
Government Service Organization Debt	17,855.4	17,976.9	121.5
Government Business Enterprise Debt	9,910.9	9,880.1	(30.8)
Public Debt	27,766.3	27,857.0	90.7
Guaranteed Debt	0.1	0.1	-

2021-22 First Quarter Financial Report                            page 6                            

 

2021-22 SCHEDULE OF PUBLIC DEBT
As at March 31
(Millions of Dollars)	Budget	First Quarter  Forecast	Change from   Budget
Government Service Organization Debt
General Revenue Fund
-Operating	9,400.0	9,525.0	125.0
-Saskatchewan Capital Plan 1	8,142.0	8,142.0	-
Boards of Education	136.9	134.4	(2.5)
Global Transportation Hub Authority	40.2	40.2	-
Health Sector Affiliates	9.6	9.6	-
Saskatchewan Health Authority	59.7	59.7	-
Saskatchewan Opportunities Corporation	49.3	48.3	(1.0)
Water Security Agency	14.3	14.3	-
Other	3.4	3.4	-
Government Service Organization Debt	17,855.4	17,976.9	121.5
Government Business Enterprise Debt
Municipal Financing Corporation of Saskatchewan	243.8	243.8	-
Saskatchewan Gaming Corporation	5.0	5.0	-
Saskatchewan Liquor and Gaming Authority	89.8	89.8	-
Saskatchewan Power Corporation	6,413.2	6,310.5	(102.7)
Saskatchewan Telecommunications Holding Corporation	1,335.3	1,422.9	87.6
Saskatchewan Water Corporation	80.9	77.5	(3.4)
SaskEnergy Incorporated	1,742.9	1,730.6	(12.3)
Government Business Enterprise Debt 2	9,910.9	9,880.1	(30.8)
Public Debt 3	27,766.3	27,857.0	90.7
Guaranteed Debt	0.1	0.1	-

¹ General Revenue Fund - Saskatchewan Capital Plan consists of amounts borrowed by the General Revenue Fund to finance investment in infrastructure assets.

² GBE debt includes both general debt and GBE-specific debt. General debt of GBEs is the amount transferred from the General Revenue Fund to a GBE and recorded as a loan receivable in the Summary Financial Statements. GBE-specific debt is debt issued by, or specifically on behalf of, GBEs. GBE-specific debt is included in “Investment in government business enterprises” in the Summary Financial Statements.

³ Public debt is shown net of sinking funds.

2021-22 First Quarter Financial Report                            page 7                            

 

ECONOMIC UPDATE

At first quarter, Saskatchewan’s economic performance remains on track with budget expectations, with many aspects of the provincial economy performing well. However, there are risks posed by prolonged drought conditions and by the increasing spread of the Delta variant of COVID-19 around the world and especially in the United States.

Key Economic Measures

Employment in the first seven months of 2021 increased by 15,029 or 2.8 per cent compared to the first seven months of 2020, and Saskatchewan’s unemployment rate dropped from an average of 9.4 per cent to 7.3 per cent, fourth lowest among the provinces.

Wholesale trade, average weekly earnings, international goods exports, and retail sales have increased in 2021 compared to the same period in 2020.

Saskatchewan has also posted the second-strongest growth in manufacturing sales and new housing starts among Canadian provinces so far this year.

In addition, building construction investment increased, driven by a significant increase in residential construction investment, which has been positively impacted by low interest rates.

SASKATCHEWAN ECONOMIC INDICATORS IN 2021
(as of first quarter)				Saskatchewan					Canada
	Level		% Change			Rank		% Change			Period
Population at Apr. 1 (000s)		1,179.9		0.0			9		0.4			April
Employment (000s)*		552.1		2.8			10		5.1			Jan-Jul
Unemployment Rate (%)*		7.3		n.a			4th lowest		8.3			Jan-Jul
Employment Rate (%)*		62.1		n.a			2		59.5			Jan-Jul
Consumer Price Index (2002=100)*		143.2		2.1			lowest		2.6			Jan-Jul
Average Weekly Earnings ($)*		1,103.1		1.2			7		4.8			Jan-May
Retail Sales ($B)**		8.5		19.3			9		21.6			Jan-May
Wholesale Trade ($B)**		15.4		9.0			10		19.4			Jan-Jun
New Motor Vehicle Sales (# of Units)**		22,572		26.6			9		31.1			Jan-Jun
Food Services & Drinking Places Sales ($M)**		681.5		16.9			4		1.0			Jan-May
Manufacturing Sales ($B)**		9.8		37.1			2		20.3			Jan-Jun
International Goods Exports ($B)**		17.8		20.1			6		22.1			Jan-Jun
Building Permits ($B)**		0.8		34.6			6		35.5			Jan-Jun
Housing Starts (# of Units)**		2,237		101.9			2		46.7			Q1 & Q2
Investment in Building Construction ($B)**		1.9		26.6			6		28.2			Jan-Jun
Residential ($B)**		1.5		73.8			4		46.9			Jan-Jun
Non-residential ($B)**		0.4		(33.8	)		10		(5.2	)		Jan-Jun

Source: Statistics Canada, August 2021

*Year to date average

**Year to date total

2021-22 First Quarter Financial Report                            page 8                            

 

Non-Renewable Resources

Potash production increased by 6.5 per cent in the first six months of 2021.

The increase in global oil demand has seen the benchmark WTI oil price increase from an average of about US$39.40 per barrel in 2020, to an average of about US$63.45 from January through the end of July 2021.

The value of oil sales increased by more than 109 per cent in the first five months of 2021 compared to the same period last year.

The recent surge in oil prices, driven by strong demand, will help stimulate the recovery of Saskatchewan’s oil and gas industry.

Agriculture

Saskatchewan’s farm and intermediate food product exports have increased by more than 15.6 per cent so far in 2021, compared to the same period in 2020. The impact of drought, however, is a major risk for this sector.

Real GDP

According to private-sector forecasters, Saskatchewan’s real GDP is now expected to grow by 5.6 per cent in 2021 and by

3.8 per cent in 2022.

At budget, these private-sector forecasters expected Saskatchewan’s real GDP to grow by 4.6 per cent in 2021 and by 3.6 per cent in 2022, after an estimated 5.2 per cent decline in 2020.

Government’s real GDP forecast at budget was 3.4 per cent growth in 2021, followed by growth of 3.2 per cent in 2022. This is after an estimated 4.2 per cent decline in real GDP forecast for 2020.

Population

Saskatchewan’s population grew marginally—by 288 persons—between April 1, 2020, and April 1, 2021. The province’s population now stands at about 1,179,900 persons (as of April 1, 2021).

CURRENT PRIVATE SECTOR REAL GDP FORECASTS FOR SASKATCHEWAN*
	2021	2022	Release Date
IHS Markit	5.6	4.4	21-May
CBOC	6.3	4.2	21-Jun
TD Bank	5.7	4.0	21-Jun
Royal Bank of Canada	5.7	4.0	21-Jun
Bank of Montreal	5.3	3.2	21-Aug
CIBC	5.6	3.4	21-Jul
Scotiabank	5.5	3.6	21-Jul
National Bank	5.4	3.5	21-Jul
Laurentian Bank	5.6	3.5	21-Jul
Average	5.6	3.8
2021-22 Budget Forecast	3.4	3.2

*Per cent increase in Real GDP

2021-22 First Quarter Financial Report                            page 9                            

 

ANNEX C—PROVINCIAL BUDGET 2021-22

See attached.

C-1

M I N I S T E R’ S    M E  S S A G E

I am pleased to table the 2021-22 Budget and supporting documents for public discussion and review.

The 2021-22 Budget will protect Saskatchewan people through the pandemic.

It provides direct funding to fight COVID-19, and record levels of investments in health care, education, social services and assistance and protection of persons and property.

This Budget will build Saskatchewan. Capital investment of $3.1 billion will help our economy and create jobs. The 2021-22 Budget invests in new long-term care facilities, hospitals, schools, highways and vital municipal infrastructure. Crown corporations will see important capital projects move forward.

This Budget will grow Saskatchewan through key investments and incentives, and it will keep life affordable for families.

The 2021-22 Budget has a forecast deficit of $2.6 billion. We project the province’s fiscal path will steadily improve over the next three years with smaller deficits of $1.7 billion in 2022-23; $1.2 billion in 2023-24; and $770 million in 2024-25. A return to balance is expected in 2026-27.

Revenue is forecast at $14.5 billion in this Budget, with most revenue categories forecast to increase compared to the latest 2020-21 forecast.

Expense of $17.1 billion is projected in this Budget, an increase of about $1.0 billion compared to last year.

This Budget protects lives and livelihoods by providing significant support, as more people become vaccinated and life begins to return to normal.

This Budget builds. This Budget ensures Saskatchewan is ready for growth, as our economy recovers and more investment comes into our province.

The 2021-22 Budget charts a clear course for our province through the remainder of the pandemic and into the strong recovery that will follow.

Honourable Donna Harpauer

Deputy Premier and Minister of Finance

T A B L E  O F  C O N T E N T S

MINISTER’S MESSAGE
GOVERNMENT DIRECTION FOR 2021-22
Protect. Build. Grow.	6
2021-22 COVID-19 RESPONSE	18
2021-22 SASKATCHEWAN CAPITAL PLAN	24
TECHNICAL PAPERS
The Saskatchewan Economy	32
2021-22 Financial Outlook	41
2021-22 Borrowing and Debt	56
2021-22 Revenue Initiatives	61
Saskatchewan’s Tax Expenditures	66
2021 Intercity Comparison of Taxes and Utilities	71
2020-21 Budget Update Third Quarter	75
BUDGET FINANCIAL TABLES
Budget	82
Statement of Accumulated Deficit	83
Statement of Change in Net Debt	83
Schedule of Pension Liabilities	84
Schedule of Capital Assets	84
Schedule of Public Debt	85
Schedule of Revenue	86
Glossary of Financial Terms	87

G o v e r n m e n t     D i r e c t i o n    f o r    2 0 2 1 - 2 2 :

PROTECT. BUILD. GROW.

The 2021-22 Budget will protect, build and grow Saskatchewan.

It will protect Saskatchewan people through the pandemic, as more vaccines are received and life begins to return to normal.

This Budget protects the health and public safety of Saskatchewan people and the province’s economy in the fight against COVID-19. Record investments in health care, pre-K to grade 12 and post-secondary education, social services and assistance, and the protection of persons and property, will help Saskatchewan move forward.

This Budget will build Saskatchewan.

Budget 2021-22 sees investment into new long-term care facilities, hospitals, schools, highways and vital municipal infrastructure. This Budget includes Crown capital for power generation, telecommunications networks, distribution of natural gas, and other needed services – to help stimulate the economy and meet the needs of Saskatchewan people.

This Budget will grow Saskatchewan through key investments and incentives, and will keep life affordable for families. The province’s economy is forecast to grow, as the effects of the pandemic ease

over time. Saskatchewan’s economy has fared better than most through this health crisis, with continued high levels of employment, and growth in housing starts, wholesale trade and international exports.

However, our province hasn’t been immune from the significant impact of COVID-19. The recovery that began in the summer of 2020 was muted by a second wave of COVID-19 in the fall and winter, making the near-term outlook less certain.

And while Saskatchewan’s real GDP is forecast to grow 3.4 per cent in 2021, a projected 4.2 per cent contraction in 2020 means the province’s finances have been impacted by the effects of the pandemic. As a result, the plan to recover will take longer than expected.

A course has been set to meet the fiscal challenge. Government will manage carefully, without reckless cuts or large tax increases that would threaten both the pandemic response and a strong recovery.

Government’s fiscal foundation remains strong, anchored by one of the lowest net-debt-to-GDP ratios in the country. This means Government has the resources required and will make the investments needed to protect people, to build the province and to grow.

BUDGET

For the Year Ended March 31

(millions of dollars)	2018-19 Actual			2019-20 Actual			2020-21 Budget			2020-21 Forecast			2021-22 Budget
Revenue		14,502			14,887			13,649			14,096			14,478
Expense		14,769			15,206			16,075			15,961			17,089
Deficit		(268	)		(319	)		(2,426	)		(1,865	)		(2,611	)

          Totals may not add due to rounding.

6  Budget 2021-22

SASKATCHEWAN’S FINANCES

Saskatchewan’s 2021-22 Budget projects a $2.6 billion deficit. Through the next three years, the fiscal path steadily improves with smaller deficits of $1.7 billion in 2022-23, $1.2 billion in 2023-24 and $770 million in 2024-25.

By carefully managing the province’s finances while continuing to make the investments needed for a strong recovery, Government expects this trajectory to continue, resulting in a balanced budget in 2026-27.

Revenue is forecast at $14.5 billion, up $830 million, or 6.1 per cent, from last year’s budget and about $383 million, or 2.7 per cent higher than the current 2020-21 forecast.

All categories of revenue are forecast to increase in the 2021-22 Budget over the current 2020-21 forecast, with the exception of net income from government business enterprises, which benefitted from one-time investment gains last year, and lower transfers from the federal government due to the discontinuation of one-time federal COVID-19 support provided in 2020-21.

This year’s budget also includes a number of changes to improve tax fairness, including the taxation of vapour products, and heat-not-burn tobacco products. As well, the Budget introduces changes to Education Property Tax mill rates that will increase provincial revenue available for pre-K to grade-12 education in line with year-over-year inflation.

This Budget will introduce a road use fee for electric vehicles at the time of registration. This will ensure fairness to all road users contributing to road maintenance and replacement.

Expense of $17.1 billion is projected in the 2021-22 Budget, an increase of $1.0 billion, or 6.3 per cent from last year’s budget, and up

$1.1 billion, or 7.1 per cent, from the current 2020-21 forecast.

The 2021-22 Budget protects lives and livelihoods by providing significant support to Saskatchewan people, the economy and jobs through the pandemic. There are increases for the vital areas of health, social services and assistance, the K-12 and post-secondary education sectors, and protection of persons and property.

Saskatchewan continues to manage its debt responsibly and its net-debt-to-GDP ratio is among the lowest in the country.

NET DEBT AS A PER CENT OF GDP

(As at March 31, 2021)

  

   Sources: Net Debt: Jurisdictions’ most recent data

                  (as of March 16, 2021)

                  GDP, SK: Saskatchewan Ministry of Finance

                  All others: Statistics Canada, IHS Markit

Total public debt, including the debt of Crown corporations, is projected to be $27.8 billion at March 31, 2022, a $4.2 billion increase from the prior year.

Borrowing is for operations and new capital investment to build hospitals, schools, highways, municipal and Crown infrastructure.

Responsible management of the Province’s finances has secured Saskatchewan the second-highest credit ratings in the country, when the ratings from the

Budget 2021-22   7

three major agencies – Moody’s Investors Service, Standard and Poor’s and DBRS Morningstar, are considered.

(More detailed information is available in the 2021-22 Financial Outlook, beginning on page 41, in the 2021-22 Revenue Initiatives section beginning on page 61 and in 2021-22 Borrowing and Debt which begins on page 56.)

PROTECT

COVID-19 Response

Government has dedicated $4.8 billion in support to help protect Saskatchewan lives and livelihoods in the fight against COVID-19, including $1.5 billion in this Budget, after $2.0 billion of support in the 2020-21 fiscal year. A further $1.3 billion of support is in place for the next two years.

The 2021-22 Budget includes economic support and funding to protect people’s health and safety in the continued response to COVID-19.

(More detailed information is included on pages 18 to 21 in the 2021-22 COVID-19 Response section.)

Health

This year’s record budget for health of $6.54 billion, up $359.0 million or 5.8 per cent from last year’s budget, will strengthen the provincial health care system to protect families and communities.

Funding for health includes the Ministry of Health, the Saskatchewan Health Authority, eHealth, the Saskatchewan Cancer Agency and 3SHealth.

The Ministry of Health will protect Saskatchewan people with $6.12 billion in the 2021-22 Budget, an increase of $261 million or 4.5 per cent from 2020-21.

A $90.0 million increase in this Budget will support Saskatchewan’s comprehensive COVID-19 response, including the mass vaccination rollout, purchase of more personal protective equipment, supporting contact tracing measures and expansion of testing and assessment sites. Additional provincial laboratory capacity, supports for long-term care and coverage of added physician costs are also part of this funding.

Government will provide the Saskatchewan Health Authority (SHA) with a $3.96 billion grant this year, an increase of $221.4 million or 5.9 per cent over last year.

This Budget invests a record $458 million for mental health and addictions programs and services, up $23.4 million or 5.4 per cent from last year. The increase includes $7.2 million for targeted mental health and addictions services, including specific youth-focused initiatives, investments in suicide prevention and expansion of harm reduction and addictions treatment. It also includes $850,000 for 12 additional provincial addiction treatment beds, plus two pre-treatment beds at the addiction treatment centre located at St.Joseph’s Hospital in Estevan.

The remaining $16.2 million of the increase is primarily for hospital-based mental health and addictions services, physician visits and prescription drug costs. Mental health and addictions programs and services account for 7.5 per cent of the overall Ministry of Health budget.

In this Budget, $6.0 million will be used to hire approximately 100 continuing care aides who help long-term care clients with personal care, meals and medication. It’s the first year of a three-year $18.4 million Government commitment to hire 300 continuing care aides to work in long-term care and in existing and expanded home care services in rural and remote areas.

8  Budget 2021-22

This Budget also keeps the commitment to support children with Autism and their families, with $6.0 million to expand the Autism Spectrum Disorder (ASD) program to provide individualized funding for children ages six to 11.

A $5.0 million increase expands eligibility under the Saskatchewan Insulin Pump Program – the cost of an insulin pump will be covered for everyone in Saskatchewan who needs one. The funding will also cover continuous glucose monitoring for children and youth under the age of 18, fulfilling another Government commitment.

Seniors will have ambulance fees reduced to $135 per trip, down from $275 – through a $6.7 million increase in this Budget, meeting another commitment.

Emergency Medical Services will receive a $6.6 million increase to provide for additional ambulances in Regina and Saskatoon and to address delays when transferring patients, covering patient wait time fees and a new computer dispatch system.

A $1.4 million new investment will add a new STARS helicopter to deliver emergency care faster to rural and remote sites. Total provincial funding for STARS is now $11.88 million.

The Saskatchewan Cancer Agency will receive an additional $7.6 million or 3.9 per cent increase in the 2021-22 Budget, bringing their annual grant to $204 million, also the highest ever. This funding will ensure Saskatchewan patients have access to additional oncology drugs, treatments and medical resources to achieve the best possible outcomes.

Increased funding will expand treatment available in regional hospitals and will provide for a new medical oncologist position plus support staff to care for Saskatchewan people.

Education

Education across government, including spending related to pre-K to Grade 12 education, post-secondary education and career training programs and commissions, is $3.75 billion in this Budget, up $391.3 million or 11.6 per cent from last year.

The Ministry of Education will support pre-K to Grade 12 students with $2.66 billion in the 2021-22 Budget, an increase of $59.6 million or 2.3 per cent from 2020-21.

Saskatchewan’s 27 school divisions will receive $1.96 billion in operating funding for the 2021-22 school year, a $19.2 million increase. This includes fully funding the 2.0 per cent salary increase as part of the teachers’ collective bargaining agreement.

Federal-provincial Safe Schools funding of $155 million has been provided to help school divisions and independent schools over the last year during the pandemic. The funding helps protect students and staff, with more staff, IT equipment, personal protective equipment and cleaning supplies, and $20.7 million of this funding will carry over into the 2021-22 school year, with $134.2 million allocated in 2020-21.

An increase of $2 million, including an increase of $1.1. million for community-based organizations, in this Budget brings child care funding up to $75.5 million and will create an additional 176 new licensed home-based spaces and 51 new licensed centre spaces as part of the province’s four-year commitment to provide 750 new licensed child care spaces.

This Budget provides a nearly $1.6 million increase over last year for community-based organizations, including child care centres, for increased operating costs and salaries.

Budget 2021-22   9

Qualified independent schools will receive an increase of $3.1 million in operating funding to address additional costs including higher enrolment.

The 2021-22 Budget provides a significant multi-year investment to help grow the long-term financial sustainability of post-secondary institutions with additional funding to protect the post-secondary sector from the challenges created by the pandemic.

The Province will invest a total of $735 million in 2021-22. Beyond the typical base budget, Government will invest an additional $60 million over two years (2021-22 and 2022-23) to be utilized for: COVID-19 recovery, revenue generation, sector collaboration and achieving priorities set out in Saskatchewan’s Growth Plan. For the first time, Saskatchewan is providing a multi-year funding commitment to the sector, which was developed collaboratively and is focused on shared priorities.

The Budget includes $678.5 million for post- secondary institutions, an increase of $28.4 million or 4.4 per cent.

Budget 2021-22 also includes $39.8 million for student supports, an increase of $3.6 million, or 10.0 per cent.

This includes an increase in the Saskatchewan Advantage Scholarship from $500 to $750 annually per eligible student to help with tuition costs, fulfilling a Government commitment.

This Budget builds upon existing support programs, including the Graduate Retention Program, the most aggressive youth retention program in Canada, providing up to $20,000 in tax credits to eligible post-secondary graduates who remain in Saskatchewan and build their careers here. To date, more than 75,000 post-secondary graduates have claimed these credits by starting their careers in Saskatchewan.

Social services and assistance

Social services and assistance is budgeted at $1.56 billion for 2021-22, up $66.4 million or 4.5 per cent from 2020-21.

This theme includes the entire Ministry of Social Services budget, as well as small portions of other Executive Government ministries and spending through the Saskatchewan Housing Corporation and Saskatchewan Legal Aid Commission.

The Ministry of Social Services will support and protect those most in need, with a total $1.34 billion in the 2021-22 Budget, up $54.5 million or 4.2 per cent over last year.

The 2021-22 Budget meets Government’s commitment to increase benefits to seniors through $3.5 million in additional funding for the Seniors Income Plan (SIP). The investment will help low-income seniors enjoy a better quality of life with maximum payments increasing by $30 a month. It’s the sixth increase Government has made to SIP since 2008 and the increase takes effect July 1, 2021.

Also, the Budget provides $246,000 to meet Government’s commitment to further enhance communication services provided by the Canadian National Institute for the Blind and Saskatchewan Deaf and Hard of Hearing Services Inc. This new funding will support the hiring of a deafblind intervenor, an American Sign Language interpreter and a case manager.

The Ministry will provide increased funding of $6.7 million to third-party service providers, including a $4.2 million increase for those working with people with intellectual disabilities and a $2.5 million increase for those supporting at-risk children, youth and families.

10  Budget 2021-22

The increase recognizes the critical role third-party providers play to protect the province’s most vulnerable during the pandemic. The funding for Social Services providers is part of Government’s total $9.1 million lift for third-party service providers which are also funded through the ministries of Education, Health, Justice and Attorney General and Corrections and Policing.

This Budget includes a $19.0 million increase to the Saskatchewan Assured Income for Disability, or SAID, program to continue to support people with disabilities. And it includes a $9.1 million increase to address current and anticipated needs of people with intellectual disabilities.

The 2021-22 Budget includes Government-wide funding of $660.3 million, an increase of $48.8 million, for enhanced programming and increased utilization for people with disabilities. Since 2007-08, Government-wide funding for people with disabilities has increased by $445 million or 207 per cent.

Child and Family Programs ensure the safety and well-being of vulnerable children in the province and the 2021-22 Budget includes an increase of $8.2 million for new residential care spaces to support children and youth with developmental and complex behavioral needs through private treatment and group homes.

This Budget includes a $1.6 million increase to implement Parent Resources for Information, Development and Education, or PRIDE, Levels of Pay Phase II, a specialized training program that supports foster families to care for children with more intensive needs.

A $3.0 million increase supports more extended family caregivers and helps them remain connected to their culture and community, and a $1.4 million

increase for in-home family supports, is aimed at preventing children from coming into the care of the Ministry. An additional $500,000 investment to Sanctum 1.5 will support high-risk expectant mothers with enhanced outreach and coordination of services.

Protection of persons and property

Protection of persons and property is comprised of the ministries of Corrections and Public Safety, Justice and Attorney General, Integrated Justice Services, Labour Relations and Workplace Safety and the Saskatchewan Provincial Safety Agency, and a number of funds, commissions and authorities.

Overall, protection of persons and property will see $845.1 million for the safety of Saskatchewan people, an increase of $38.6 million or 4.8 per cent from last year.

This Budget provides $92.4 million to the Saskatchewan Public Safety Agency (SPSA), a Treasury Board Crown committed to the protection of people, property and resources in the province.

The SPSA is coordinating the provincial non-health response to COVID-19 through the Agency’s Provincial Emergency Operations Centre, and this Budget also includes capital investment to modernize the province’s wildfire suppression fleet.

This Budget includes $3.6 million to put in place in 2022 a Turbo Commander aircraft, the first of four such aircraft being put in place over the next four years. There is also $9.2 million, the third installment of a four-year plan to acquire a CL215T Air Tanker that will be delivered in late 2022.

The Ministry of Justice and Attorney General will further protect the people of the province, with $163.6 million in the 2021-22 Budget, an increase of $8.4 million or 5.4 per cent over last year’s budget.

Budget 2021-22   11

In this Budget, $287,000 will be provided to the Public Complaints Commission to develop a Serious Incident Response Team (SIRT), making Saskatchewan’s police oversight consistent with that of other Canadian jurisdictions.

The 2021-22 Budget includes $530.8 million, an increase of $23.8 million or 4.7 per cent for the Ministry of Corrections and Public Safety. A total of $2.5 million, funded by both the federal and provincial governments, will be dedicated to the Saskatchewan Firearms Program which is being transitioned from the federal government to the Province.

More than $3.2 million is being invested in the Gang Violence Reduction Strategy, which provides addictions programming in provincial correctional facilities and intervention services to individuals who want to leave gangs.

Increased funding of $800,000 will be used to respond to interpersonal and domestic violence, including support for a public awareness campaign, a 24/7 Interpersonal Violence and Abuse Provincial Call Line in partnership with 211, the development of family intervention rapid support teams and expansion of the Victim Advocate Case Review initiative.

Approximately $110,000 will support the creation of a new Police and Crisis Team (PACT) for the Estevan region, to address increased volumes of mental health calls and approximately $243,000 will support police to enhance the capabilities of the provincial Internet Child Exploitation (ICE) units.

Nearly $4.3 million will fund pandemic-related measures in Saskatchewan’s courts and correctional facilities. This includes ongoing costs for personal protective equipment, cleaning services and other precautionary measures being taken in courts and correctional facilities.

BUILD

As Saskatchewan recovers from the effects of the pandemic, the province will focus on growth and a strong capital plan will be the foundation of its economic recovery.

Including $3.1 billion in this year’s budget, record investment of close to $37 billion in capital through Saskatchewan Crowns and Executive Government since 2008-09 has helped stimulate the economy and create jobs.

The 2021-22 Budget invests $162.0 million into health care capital, including $3.6 million for the future Grenfell long-term care facility, $7.6 million for the 80-bed La Ronge long-term care facility and $1.1 million to begin planning activities for long-term care facilities in Estevan, Watson and Regina.

This Budget also incudes $1.4 million for the Weyburn Hospital planning stage, $5.7 million for urgent care centres in Saskatoon and Regina and $1.4 million to allow for ongoing work on the program and design plans for the Prince Albert Victoria Hospital.

Since 2008-09, more than $1.9 billion in investment has built hospitals, including the Jim Pattison Children’s Hospital, Saskatchewan Hospital North Battleford, the Dr. F. H. Wigmore Hospital in Moose Jaw and 15 new long-term care facilities across the province. Investment has also led to the renewal of many health care facilities and the purchase of needed equipment.

In 2021-22, the Government of Saskatchewan will invest $830 million into operating, maintaining, building and improving the province’s roads and

12  Budget 2021-22

highways, the total Ministry of Highways appropriation, an increase of $115 million or 16 per cent.

The 2021-22 Budget invests $553.2 million into transportation capital, up $108.5 million in 2021-22.

This includes $520.1 million for investments into capital projects to improve safety and efficiency on key highway corridors, beginning twinning work on Highway 3 west of Prince Albert and multiple stimulus passing lane projects on Highways 2, 3, 12, 14 and 16.

It also includes three sets of passing lanes on Highway 7, from Kindersley to the Alberta border, two sets of passing lanes and widening on Highway 5 from Saskatoon to Highway 2, and completing passing lanes and improvements on Highway 39 from Corrine to Estevan.

Government’s investment also includes $33.1 million in transfers related to municipal infrastructure for the Rural Integrated Roads for Growth program, the Urban Highway Connector Program and the Community Airport Partnership Program, with $530,000 in this Budget for a new Short-line Rail Infrastructure Program to support the industry.

With this year’s budget, more than $10.6 billion has been invested into transportation infrastructure since 2008, improving more than 17,100 kilometers of provincial highways.

The 2021-22 Budget includes $189.9 million for education capital, an increase of $22.3 million or 13.3 per cent. This budget has $101.9 million to support 21 ongoing capital projects which will build 16 new schools and renovate five.

This includes completing the construction of a new elementary school in Weyburn, and beginning construction on a new joint-use facility with two elementary schools in Regina to replace Argyle and St. Pius elementary schools.

Many projects throughout the province are poised to complete design and begin construction as early as spring of 2022. Government will also provide $8.8 million as part of its stimulus funding to complete 15 maintenance projects, the second year of a $25.9 million commitment, and $67.9 million will fund ongoing preventative maintenance, renewal and emergency funding. A further $10.3 million will fund relocatable classrooms.

Since 2008-09, approximately $2.1 billion has been invested to build 57 new schools and to undertake 28 major renovation projects.

The 2021-22 Budget incudes $324.2 million in government services infrastructure, an increase of $109.3 million over last year. It includes $52.0 million for the construction of the remand centre at the Saskatoon Correctional Centre and $3.8 million to replace and expand the Saskatoon Correctional Centre urban camp.

There is also $66 million for maintenance and upgrades to dams and canals and $18.9 million for phase one of the Lake Diefenbaker Irrigation – Westside Expansion Project – a transformational multi-year project expected to cost $4 billion.

This Budget includes $244.6 million for municipal infrastructure. This includes commitments under federal-provincial infrastructure agreements, and investments such as Transit Assistance for People with Disabilities. Since 2008-09, close to $2.2 billion has been invested in municipal infrastructure.

Budget 2021-22   13

Crown corporations will spend $1.6 billion on major capital investments in this Budget, including $937.6 million by SaskPower to improve the province’s electricity system to meet demand and maintain reliability.

SaskPower’s sustainment program is being supported by $50 million of economic stimulus capital in the coming year, bringing the total sustainment investment to a record high $272.0 million – fully 28 per cent of SaskPower’s capital plan dedicated to ensuring reliability of the electrical grid.

SaskEnergy is investing $276.8 million in the province’s natural gas distribution system, including expansion of the transmission system to meet increased demand in a growing province. In this Budget, SaskTel is investing $323.2 million to improve its networks dedicated to being the best at connecting people to their world. SaskTel will complete its $107 million Wireless Saskatchewan program in 2021-22 with an investment of $7.5 million aimed at improving cellular services for rural customers.

Since 2008, approximately $20.4 billion in investment through Saskatchewan’s Crown corporations has improved power generation, transmission and distribution, telecommunications networks and natural gas transportation and distribution, and water and wastewater systems among many other projects.

The Province’s Growth Plan targets a further $30 billion in capital investment by Executive Government and the Crowns over the next decade. The investments in this Budget move toward that goal, to build a strong Saskatchewan.

(More information is available in the 2021-22 Saskatchewan Capital Plan which begins on page 24.)

GROW

As Saskatchewan emerges from the pandemic, Government remains committed to its Growth Plan goals of a strong economy, a growing province and new jobs over the next decade.

Creating opportunities for people to pursue careers in this province and to attract newcomers who want to build their future in Saskatchewan is fundamental to continued growth.

Through the Ministry of Immigration and Career Training, the Province invests in a number of programs and services to help employers develop, recruit and train workers and to help individuals prepare for, secure and maintain employment.

The 2021-22 Budget includes record funding for workforce development of more than $39 million, including $17 million in one-time federal funding for additional programs and projects that will strengthen Saskatchewan’s recovery from the pandemic.

Nearly $18 million, including $8 million in one-time federal funding, is being provided for Employment Assistance for People with Disabilities, to remove barriers, provide supports and develop skills people need to participate in the labour force. The Budget also provides $8.1 million, an increase of $700,000 for the Canada-Saskatchewan Job Grant to help ensure employers have a skilled workforce with the competencies to be productive and competitive.

As Saskatchewan’s economy recovers and moves towards creating new jobs over the next decade as outlined in the Growth Plan, the province will focus on competitiveness, increasing trade, growing exports and ensuring that not only more markets are sought, but that value is added to Saskatchewan products sold around the world.

14  Budget 2021-22

The 2021-22 Budget includes $200 million for the Accelerated Site Closure Program (ASCP) to support Saskatchewan-based oil and gas service companies and more than 2,000 jobs in the sector. The program is federally funded and cleans up abandoned oil and gas well sites.

This Budget takes further measures to attract investment and create jobs in the oil sector by modernizing and expanding the High Water-Cut Program, changing the royalty status of high-water wells for producers who make new investments in water handling. The change will make the wells more viable for producers and promote greater overall production.

And this Budget will provide oil producers with $3.8 million in annual royalty relief to help them invest in new methane emissions reduction projects, and help support capture and commercialization rather than venting and flaring.

The Budget will simplify and reduce the royalty rate on sodium sulphate production, and introduces an improved capital investment credit to encourage added value and enhance Saskatchewan’s presence in growing potash fertilizer markets.

To ensure growth of export markets, the 2021-22 Budget increases funding for international offices by $5.0 million, to $9.3 million. The Ministry of Trade and Export Development will work to expand Saskatchewan’s presence by establishing international trade and investment offices in four additional locations, which will be announced in the coming months. The new offices will complement existing offices in China, India, Japan and Singapore.

Officials in these offices will focus on diversifying markets, connecting Saskatchewan businesses with investors and customers. They will encourage direct

foreign investment and give our exporters an advantage with people who understand the business culture, rules and regulations in key markets.

The 2021-22 Budget includes $174.8 million for continuation of the Saskatchewan Economic Recovery Rebate which began providing all SaskPower customers, businesses and individuals, with a 10 per cent rebate on their power bills last year. In May, the previously announced $285 million Auto Fund recovery rebate will provide $285, on average, to all Saskatchewan vehicle owners.

With these rebates, in 2021 Saskatchewan people will pay the lowest total utility rates in the country –making life more affordable by putting more money back in Saskatchewan residents’ pockets, which in turn will strengthen the province’s recovery from the pandemic.

The temporary small business tax rate reduction will help Saskatchewan small businesses through the pandemic. The rate was reduced from 2.0 per cent to zero effective October 1, 2020 and will provide $96 million in tax savings to Saskatchewan small businesses in 2021-22. The rate will increase to 1.0 per cent July 1, 2022 and return to 2.0 per cent on July 1, 2023 as Saskatchewan recovers from the pandemic.

The new Saskatchewan Home Renovation Tax Credit provides a 10.5 per cent tax credit on up to $20,000 of eligible home renovations done between October 1, 2020 and December 31, 2022, beginning with the 2021 tax year.

The tax credit is forecast to cover $66.4 million of costs in 2021-22, creating jobs in the building trades and making life more affordable for Saskatchewan people.

Budget 2021-22   15

This Budget includes an additional $2.5 million for irrigation development projects in the areas outside the Lake Diefenbaker irrigation expansion project announced in 2020. Through the Ministry of Agriculture, this funding will help further develop land and water resources, a goal in the Growth Plan. Irrigation supports the growth of diverse, high-value crops which leads to value-added processing opportunities, business attraction and employment.

The 2021-22 Budget extends the Saskatchewan Technology Start-up Incentive for five years, to encourage investment in technology, bring new products to market and create jobs. The program offers a non-refundable 45 per cent tax credit to Saskatchewan investors. To date, the incentive has attracted $22.0 million in investment, benefiting 62 tech companies, creating 144 new jobs.

This Budget includes $3.0 million for investment into an agricultural technology venture capital fund. This initial investment is part of the $15 million commitment announced last summer to further Saskatchewan’s global leadership in the ag-tech sector.

And this Budget includes more than $4 million in operating funding to grow the Vaccine and Infectious Disease Organization (VIDO), in addition to previous commitments of $15 million to support VIDO’s Centre for Pandemic Research and $4.2 million for vaccine development and to support construction of a new vaccine manufacturing facility. Domestic vaccine production is vital to protecting Canadians through the current and any future pandemics. The work being done at VIDO will make Saskatchewan a leader in Canada in research, development and production of new vaccines.

The Growth Plan sets a goal of increasing tourist expenditures in Saskatchewan by 50 per cent by 2030. Saskatchewan’s natural beauty and parks attract visitors from around the world.

In this Budget, $16.5 million will be invested in capital projects and upgrades, including the development of a new serviced campground at Cypress Hills and new group pavilions at Pike Lake, Blackstrap, Echo Valley and Buffalo Pound Provincial Parks, among a number of enhancements at several parks.

This Budget also helps Saskatchewan communities continue to grow by reinstating the Community Rink affordability grant, a Government commitment providing $2,500 per ice surface. The $1.7 million program helps cover eligible operating costs, COVID-related costs and minor capital improvements for more than 600 ice surfaces in more than 350 communities.

The 2021-22 Budget helps the viability of service clubs providing support for veterans and their families and communities in Saskatchewan. Total funding through the Saskatchewan Veteran Service Club Support Program will grow from $100,000 to $1.5 million in 2021-22, another commitment kept by Government.

The Active Families Benefit has been restarted, as promised by Government, helping keep life affordable for families by providing $150 per child enrolled in sport, recreation and cultural activities. The benefit provides an extra $50 per child to families of children with a disability.

These commitments help Saskatchewan grow, enhance quality of life and create jobs while keeping our economy strong.

The 2021-22 Budget strengthens communities through $276 million in Municipal Revenue Sharing. Since 2007-08, Municipal Revenue Sharing has increased by 118 per cent and has provided a stable, predictable source of funding for Saskatchewan’s rural, urban and northern communities.

16  Budget 2021-22

This Budget includes more than $465 million of total investment into municipalities, including revenue sharing, the province’s portion of infrastructure funding and a number of grants and initiatives from multiple Government ministries.

The 2021-22 Budget includes $193.6 million in targeted investment that will help meet the priorities of Indigenous communities, businesses and organizations.

This includes $35 million in emergency pandemic support replacing gaming agreement transfers to First Nations and Métis organizations, as casinos continue to be impacted by the pandemic.

The purpose of growing a strong economy and supporting strong communities as we recover from the pandemic and as life begins to return to normal is to build a better quality of life for Saskatchewan families.

It provides the ability to make life more affordable for Saskatchewan people. Our province has among the lowest personal taxes in the country.

Since 2007, Personal Income Tax (PIT) exemptions have removed 112,000 people from the province’s income tax roll. In total, PIT reductions introduced over the past 12 years are providing over $700 million in annual income tax savings to Saskatchewan people.

Government has reintroduced annual indexation of the provincial income tax brackets, ensuring that these tax savings are not eroded by inflation.

In 2021, a Saskatchewan family of four can earn twice as much before they begin paying provincial income tax than they could in 2007. A family of four pays no provincial income tax on their first $52,250 of combined income. In 2007, a family of four began paying provincial income tax once their combined income reached just $26,150.

A Saskatchewan family of four with $100,000 in total income pays $1,918 less in combined provincial income and sales tax in 2021 compared to 2007.

In 2021, an individual with income of $40,000 pays $744 less in combined provincial income and sales tax than in 2007, when the enhanced Saskatchewan Low-Income Tax Credit is factored in.

PROTECT. BUILD. GROW.

The 2021-22 Budget will protect Saskatchewan people through the rest of the pandemic, as more become vaccinated and life begins to return to normal. It provides

direct funding to fight the pandemic, and record investments in health care, education, social services and assistance and protection of persons and property.

This Budget builds. Capital investment of $3.1 billion will help our economy and create jobs.

This Budget ensures Saskatchewan is ready for growth, as our economy recovers and more investment comes into our province.

The 2021-22 Budget is the right budget for Saskatchewan people. The priority is to protect people and businesses by investing in needed support, services and programs.

By building, by investing in needed capital, our Government will help keep Saskatchewan strong. And it is the right plan to help Saskatchewan recover and grow, and to plan a post-pandemic path to balance.

This Budget protects, builds and grows Saskatchewan. It charts a clear course for our province through the remainder of the pandemic and into the strong recovery that will follow.

Budget 2021-22   17

2021-22 COVID-19 RESPONSE

Government’s response is $4.8 billion in economic, health and safety support to protect Saskatchewan people and businesses through the pandemic, to invest in capital and to help the economy recover and grow.

The 2021-22 Budget includes $1.5 billion in support, following more than $1.9 billion in 2020-21, for a total of $3.4 billion since the start of the COVID-19 pandemic.

More than $1.3 billion is planned over the next two years to continue to help Saskatchewan people and help the province’s economy recover.

COVID-19 SUPPORTS

(millions of dollars)	2020-21		2021-22		Future Years		Total
Health and Public Safety
Health Sector Response		75.6		90.0		–		165.6
Saskatchewan Safe Schools Plan		134.2		20.7		–		154.9
Northern Isolation Support Program		4.8		6.8		–		11.6
Other Measures		35.2		5.0		–		40.2
Canada-Saskatchewan Safe Restart Agreement		338.1		–		–		338.1
Saskatchewan Temporary Wage Supplement Program		56.0		–		–		56.0
U of S Vaccine and Infectious Disease Organization		15.0		–		–		15.0
Total Health and Public Safety		658.9		122.5		–		781.4
Economic Support
Saskatchewan Capital Plan		405.4		488.1		1,106.5		2,000.0
Auto Fund Recovery Rebate		–		285.0		–		285.0
Accelerated Site Closure Program		100.0		200.0		100.0		400.0
SaskPower Customer Rebate Program		85.2		174.8		–		260.0
Home Renovation Tax Credit		12.9		66.4		44.7		124.0
Small Business Tax Rate Reduction		45.1		64.6		40.1		149.8
Emergency Pandemic Support – Gaming Partner Grants		50.0		39.0		–		89.0
Post-secondary Supports		7.0		30.0		30.0		67.0
Immigration and Career Training Supports		17.0		27.3		–		44.3
Saskatchewan Tourism Sector Support Program		35.0		5.0		–		40.0
Other Measures		38.0		6.4		–		44.4
Small Business Emergency Payment Program		70.0		–		–		70.0
Relief for the Oil and Gas Sector		26.0		–		–		26.0
Agriculture Sector Support		17.5		–		–		17.5
Total Economic Support		909.1		1,386.6		1,321.3		3,617.0
Total Direct Support		1,568.0		1,509.1		1,321.3		4,398.4
Deferral Programs		382.2		–		–		382.2
Total Government Support		1,950.2		1,509.1		1,321.3		4,780.6

18  Budget 2021-22

HEALTH AND PUBLIC SAFETY SUPPORT IN 2021-22

The 2021-22 Budget includes $90.0 million in health sector response through the Ministry of Health, to provide testing equipment, personal protective equipment and to fund operating costs to address the pandemic.

A total of $155 million will be invested under the Saskatchewan Safe Schools Plan, including $134.2 million in 2020-21 and another $20.7 million in 2021-22 for school divisions to continue to support the safe return to classrooms.

This Budget includes $6.8 million for the Northern Isolation Support Program, as part of an agreement with the federal government to help individuals in remote locations voluntarily isolate. The program will provide access to suitable commercial accommodations and mobile residential units as part of a temporary community housing solution.

Other measures include $4.2 million for justice and corrections facilities and $800,000 extending care to youth during the pandemic who will otherwise age out of care.

HEALTH AND PUBLIC SAFETY SUPPORT IN 2020-21

The federal government provided $338.1 million through the Canada-Saskatchewan Safe Restart Agreement to support the safe re-opening of the provincial economy and to help with costs associated with protecting people through the pandemic.

Safe Restart funding has been fully allocated to the Ministry of Health ($218.1 million) for health care capacity, mental health and substance abuse support, personal protective equipment, and testing, contact

tracing and data management; to the Ministry of Government Relations ($70.4 million) for municipalities; to the Ministries of Social Services and Corrections, Policing and Public Safety ($26.0 million) for vulnerable populations; to the Ministry of Education ($20.6 million) for child care for returning workers; and to various other ministries ($3.0 million) for personal protective equipment.

The Government is committing $15 million to further support pandemic research by the Vaccine and Infectious Disease Organization (VIDO) at the University of Saskatchewan. The commitment is contingent on the Government of Canada committing to the project.

There was $75.6 million provided for health sector response, and $4.8 million for the Northern Isolation Support Program.

The Saskatchewan Temporary Wage Supplement program is a $56.0 million federal-provincial cost-shared program providing temporary top-ups to the salaries of workers who provide care to some of the province’s most vulnerable, through the pandemic.

And $35.2 million in other health and safety measures includes online systems and facility enhancements in the justice system during the pandemic, as well as additional costs for custody services.

Also, the Saskatchewan Public Safety Agency costs for COVID-19 response include expenses for the Provincial Emergency Operations Centre. Personal protective equipment, checkpoints, communications and other services were among the costs. And funding was provided for upgrades to the Saskatchewan Polytechnic Dental Lab facility to ensure compliance with COVID-19 protocols.

Budget 2021-22   19

ECONOMIC SUPPORT IN 2021-22

Last year, Government announced $2 billion in incremental infrastructure funding, a stimulus booster to help the province’s economy recover and create jobs in the years ahead. In the 2021-22 Budget, $488.1 million in stimulus spending is targeted to infrastructure investment on needed maintenance and on major projects, described in the 2021-22 Capital Plan, following $405.4 million in 2020-21.

Saskatchewan drivers will receive a one-time rebate of $285, on average, calculated on a proportion of vehicle premiums paid in the previous three years. The full rebate from the Auto Fund is $285 million, announced in February, and is to be provided to Saskatchewan drivers in May.

All SaskPower customers will receive a one-year, 10 per cent rebate on electricity charges on power bills, to support Saskatchewan’s economic recovery from COVID-19. In total, the rebate is $174.8 million in 2021-22, after $85.2 million last year.

With these rebates factored in, Saskatchewan people will pay the lowest rates in the country on their bundle of utilities.

The three-year, $400 million federal Accelerated Site Closure Program sees $200 million budgeted in 2021-22 to help oilfield service companies through the pandemic, with work on site abandonment and reclamation work in the oil patch, helping the environment and providing economic stimulus.

The small business tax rate reduction will protect Saskatchewan small businesses through the pandemic. At a cost of $64.6 million in forgone tax revenue in 2021-22, the rate was reduced from 2.0 to 0.0 per cent, effective October 1, 2020. The rate will increase to 1.0 per cent July 1, 2022 and return to 2.0 per cent on July 1, 2023 as Saskatchewan recovers from the pandemic.

The new Saskatchewan Home Renovation Tax Credit will provide a 10.5 per cent tax credit on up to $20,000 of eligible home renovations done between October 1, 2020 and December 31, 2022, beginning with the 2021 tax year. The tax credit is forecast to save taxpayers $124 million over the life of the program, including $66.4 million in 2021-22.

In recognition of lost gaming transfer revenue as a result of casino closures, $39 million in emergency pandemic response gaming partner grants in 2021-22 are providing pandemic support for First Nations and Métis organizations, and the Community Initiatives Fund. The emergency grants totaled $50 million in 2021-22.

The 2021-22 Budget has $30 million as part of a $60 million COVID-19 response package and multi-year funding plan for post-secondary institutions, through the Ministry of Advance Education. In 2020-21, $7.0 million in COVID-19 response was provided.

This Budget has $27.3 million in increased funding for Workforce Development, Employability Assistance for Persons with Disabilities top-up, the Canada-Saskatchewan Job grant, and the Newcomer and Settlement program, to help people seeking to immigrate to Saskatchewan and address the backlog due to border closures, and to help those disadvantaged by the pandemic with training support and financial supports for employers through the Ministry of Immigration and Career Training.

There is $5.0 million for the Saskatchewan Tourism Sector Support Program to help tourism-related businesses who have experienced a loss of sales revenue of at least 30 per cent, following $35.0 million in support through the program last year. There is also $6.4 million in other supports, including an estimated $5.6 million for increased VLT site commissions, $754,000 in reduced revenue, to help outfitters by putting a moratorium on their fees, and $77,000 for increased capital grants to regional parks.

20  Budget 2021-22

ECONOMIC SUPPORT IN 2020-21

A number of supports that were provided in 2020-21 were unique to the year that saw the pandemic emerge.

The Small Business Emergency Payment Program is forecast to provide $70.0 million in grants for small and medium-sized enterprises directly affected by public health orders related to COVID-19, up to $5,000.

Relief for the oil and gas sector provided $26 million to reduce the industry portion of the Oil and Gas Administrative Levy by 50 per cent, extended a series of filing and other deadlines, extended by a year mineral rights that were scheduled to expire in 2020 and allowed industry to reduce lease holdings.

And agricultural sector support in the 2020-21 Budget totaled $17.5 million, through AgriRecovery Response and through the Western Livestock Price Insurance program that helped support producers through COVID-19 related market disruption and uncertainty.

And $38.0 million in other measures went to a variety of initiatives to support businesses and individuals, including VLT site commission increases, Canada Emergency Commercial Rent Assistance, Junior Hockey Support, Self-Isolation Support, the Re-Open Saskatchewan Training Subsidy, Conexus Arts Centre funding and the Buy Local Campaign.

DEFERRAL PROGRAMS

In 2020-21, Government allowed businesses, taxpayers and ratepayers to temporarily defer the payment of certain taxes and fees to support their cash flow. Deferrals of Provincial Sales Tax remittance, Crown utility bills, Education Property Tax collection and an interest-free moratorium on student loans totaled $382.2 million.

FUTURE SUPPORT

Approximately $1.1 billion, the remainder of the capital stimulus plan, is allocated to major infrastructure projects years beyond 2021-22, to help the economy recover, to create jobs and help Saskatchewan grow.

In addition, $100 million for the final year of the $400 million federally funded Accelerated Site Closure Program will be allocated in 2022-23, supporting oil field service companies.

The Home Renovation Tax Credit continues, providing $44.7 million for Saskatchewan people and helping businesses. The Small Business Tax Rate Reduction continues, providing $40.1 million in relief beyond 2021-22.

An additional $30 million in 2022-23 for COVID-19 response and multi-year funding will be provided for post-secondary institutions.

Budget 2021-22   21

S A S K A T C H E W A N   C A P I T A L   P L A N

2021-22 SASKATCHEWAN CAPITAL PLAN

Protect. Build. Grow.

CAPITAL PLAN HIGHLIGHTS

Saskatchewan’s Growth Plan targets $30 billion of infrastructure spending by 2030 to support a growing province and a better quality of life for the people of Saskatchewan. The 2021-22 Saskatchewan Capital Plan contributes toward this goal and furthers Government’s commitment to stimulate economic recovery with projected spending of $11.6��billion over the next four years, which includes $3.1 billion to be provided in 2021-22 through Executive Government and Saskatchewan’s commercial Crown sector.

To Protect, Build and Grow Saskatchewan, Government will invest in new and existing infrastructure, both now and into the future. This plan provides funding for new and ongoing projects to address essential infrastructure needs, encourage local job creation and ensure Saskatchewan’s continued success. Since 2008-09, including the amounts provided in this Budget, Saskatchewan has committed close to $37 billion towards provincial infrastructure investments. This includes the construction and rehabilitation of health and educational facilities, transportation infrastructure, and public utility enhancements across the province.

CAPITAL PLAN

24  Budget 2021-22

The 2021-22 Saskatchewan Capital Plan contributes toward the Growth Plan’s target of $30 billion in infrastructure spending and furthers Government’s commitment to stimulate economic recovery.

The plan outlines projects approved to date and provides an estimate of anticipated future capital investments. The plan is detailed as follows:

SASKATCHEWAN CAPITAL PLAN – 2021-22 TO 2024-25

(Millions of Dollars)	2020-21 Budget		2020-21   Forecast		2021-22   Budget		2022-23   Projected		2023-24   Projected		2024-25   Projected
Executive Government Ministries and Agencies
Transportation Infrastructure
Highways Capital		411.1		468.1		520.1		378.1		341.0		332.0
Highways Partnerships and Supporting Capital		33.5		46.9		33.1		27.0		19.5		19.5
Municipal Infrastructure
Municipal Programs		315.7		310.3		244.6		291.0		315.6		178.8
Education Capital
School Capital		87.9		49.9		113.3		156.5		114.8		30.0
Maintenance Capital		79.8		79.3		76.7		67.9		67.9		67.9
Advanced Education
Maintenance Capital		33.0		34.8		29.4		23.3		24.3		25.4
Health Care
Maintenance Capital		93.9		93.9		81.2		52.5		52.5		52.5
Health IT and Equipment Capital		42.1		110.7		59.8		28.3		23.1		23.1
Health Facilities		49.4		18.3		21.1		146.2		179.8		253.8
Government Services
IT Capital		29.3		28.9		44.3		42.4		29.6		2.2
Dams and Water Supply Channels		81.1		37.7		70.1		116.1		175.9		162.4
Courts and Corrections Facilities and Equipment		25.0		16.4		81.4		70.6		8.7		7.6
Parks Capital		13.0		13.0		16.5		9.8		9.4		9.8
Equipment Capital		23.5		23.6		27.7		26.8		17.2		17.2
Government Buildings		12.8		28.9		25.5		9.7		9.4		9.4
Targeted and Other Capital		30.1		39.1		58.7		11.8		3.8		3.8
Total Executive Government Ministries and Agencies		1,361.2		1,399.8		1,503.3		1,458.0		1,392.5		1,195.2
Crowns
SaskPower		845.7		743.6		937.6		975.2		844.3		708.3
SaskEnergy		406.7		252.8		276.8		256.9		263.3		222.4
Others		495.5		383.0		399.0		355.9		366.4		397.8
Total Crowns		1,747.9		1,379.4		1,613.4		1,588.0		1,474.0		1,328.5
Total Capital Plan		3,109.1		2,779.2		3,116.7		3,046.0		2,866.5		2,523.7

Budget 2021-22   25

$2 Billion Stimulus Fund

In 2020-21, Government announced an additional $2 billion in infrastructure investments to stimulate economic recovery and encourage local job creation. The stimulus funding has been fully allocated to the following project streams.

• Approximately $1.4 billion for large infrastructure projects. Most of these projects are in advanced planning and designing stages, and are scheduled to be completed over multiple years but will support growth over the long term.

• More than $300 million for highway projects for thin membrane surface upgrades, passing lanes, upgrades to municipal roads and airports. These projects are scheduled to be completed by the end of 2022-23, and the majority of spending will occur in 2021-22.

• Nearly $170 million for renewal projects to reduce deferred maintenance on provincial and third-party assets and reduce operating costs through energy efficiency. Renewal projects are scheduled to be completed by the end of 2021-22.

• $150 million in per capita payments through the Municipal Economic Enhancement Program to support infrastructure projects in communities across the province. Funds have been transferred to municipalities for shovel-ready projects that must be completed by the end of 2021-22.

The delivery and completion of the stimulus projects vary for each stream, and funding requirements have been included in the Capital Plan.

CAPITAL PLAN DETAILS

Transportation Infrastructure

The four-year plan projects approximately $1.7 billion in capital investments for transportation infrastructure across the province, including a total of $553.2 million in the 2021-22 Budget. The amount represents an increase of nearly $109 million or 24 per cent over the prior year, and 1,350 km of provincial highways will be improved in 2021-22.

The 2021-22 Budget provides for major projects that allow the province to continue designing and constructing several passing lanes and twinning projects. This includes passing lanes on Highway 7 – Kindersley to the Saskatchewan-Alberta border, Highway 39 – Corrine to Estevan, Highway 5 – Saskatoon to Highway 2, as well as beginning work on twinning Highway 3 west of Prince Albert.

Budget 2021-22 includes a record level of investment in rural provincial highways by providing over $180 million to deliver 280 km of upgrades. These upgrades include Highway 4, U.S. border to Grasslands National Park; Highway 18, west of Lake Alma; Highway 43, Gravelbourg to east of Highway 19; and Highway 322, Glen Harbour to Rowan’s Ravine.

Protecting drivers with safe highways continues to be one of Government’s highest priorities. The 2021-22 Budget includes funding for the third year of the five-year $100 million commitment to improving intersection and road safety.

26  Budget 2021-22

The 2021-22 Budget supports municipal and regional transportation infrastructure by providing approximately $33 million in capital grants. This includes support to economic growth and safety on rural municipal roads through the Rural Integrated Roads for Growth Program and partnerships with urban municipalities through the Urban Highway Connector Program.

Since 2008-09, almost $10.6 billion has been invested in transportation infrastructure, resulting in improvements to more than 17,100 km of provincial highways, numerous bridge and culvert replacements, as well as the construction and completion of the Regina Bypass, the Estevan Bypass, the Yorkton West Truck Route, and interchanges in Martensville and Warman, among others.

The 2021-22 Budget represents an increase of nearly $109 million over the prior year and continues funding for key stimulus projects.

Municipal Infrastructure

Over $1 billion in capital spending will be provided to support municipal infrastructure projects over the next four years, including $244.6 million in the 2021-22 Budget. This includes commitments under federal-provincial infrastructure agreements, as well as programs such as Transit Assistance for People with Disabilities. In addition to this funding, Saskatchewan will also provide $275.7 million through the Municipal Revenue Sharing program in 2021-22.

Combined, these programs build our communities by providing funding for initiatives such as upgrades and amenity improvements to the Shakespeare on the Saskatchewan festival site in Saskatoon, a recreational complex in Assiniboia, the ultraviolet water disinfection project in Shaunavon, sewer system upgrades in Yorkton, and a lagoon project in Kindersley, among many others.

Since 2008-09, close to $2.2 billion has been invested to support municipal infrastructure projects.

Education Capital

Saskatchewan’s K-12 facilities are integral to building and growing our communities. In recognition of this, the plan will invest $695 million over the next four years into Saskatchewan’s schools. The 2021-22 Budget provides approximately $190 million for new initiatives, as well as continuing support for the repair, renovation and construction of schools across the province.

The 2021-22 Budget provides $65.4 million to complete the design phase and begin construction for 13 school projects as early as spring 2022. These projects include the consolidation of Princess Alexandra, King George and Pleasant Hill elementary schools in Saskatoon; a replacement for St. Frances Elementary School in Saskatoon; a new Francophone elementary school in Regina; a new joint-use facility in Regina’s Harbour Landing

Budget 2021-22   27

neighbourhood; a joint-use consolidation of St. Peter, St. Michael and Imperial elementary schools in Regina; a joint-use facility in Moose Jaw to consolidate four existing schools; the consolidation of the elementary school and high school in Carrot River; a new elementary school to replace Ducharme Elementary School in La Loche; a new K-12 school to replace Blaine Lake Composite School; and the consolidation of the elementary school and high school in Lanigan.

Budget 2021-22 also includes $12.3 million to complete construction on a new elementary school in Weyburn that is scheduled to open in fall 2021, consolidating three existing schools; and begin the construction on a new joint-use facility to replace Argyle and St. Pius elementary schools in Regina.

$24.3 million is provided in 2021-22 for major renovations to the Yorkton Regional High School, John Paul II Collegiate in North Battleford, Holy Rosary High School in Lloydminster, Lloydminster Comprehensive High School, and Athol Murray College of Notre Dame.

The Budget also provides $76.7 million for the maintenance of K-12 schools. Preventive maintenance and renewal of existing facilities remain a primary focus as it extends the useful life of existing school facilities, provides for energy efficiency upgrades, and serves as a cost-effective alternative to major reconstructions.

To meet the immediate needs for additional classroom space to accommodate increases in enrolments, the Budget also includes $10.3 million for relocatable classrooms.

Approximately $2.1 billion has been invested in education capital since 2008-09, including 57 new schools and 28 major renovation projects.

Advanced Education

Since 2008-09, Government has invested nearly $685 million in post-secondary infrastructure across Saskatchewan. This includes the Health Sciences Building and the International Vaccine Centre at the University of Saskatchewan, and a new student residence at the University of Regina.

The four-year plan provides over $102 million for infrastructure improvements in the post-secondary sector, including $29.4 million in the 2021-22 Budget. This funding supports major renovation and repair works required to ensure that facilities meet both current and future needs while providing a safe and healthy learning environment.

Since 2008-09, Government has invested nearly $685 million in post-secondary infrastructure across Saskatchewan.

Health Care

Protecting the lives and health of Saskatchewan people is Government’s topmost priority, and the four-year plan targets over $974 million in infrastructure improvements to the health care system. In 2021-22, the Budget provides a total of $162 million for maintenance and improvement of existing facilities, the construction of new facilities, and equipment and technology acquisitions.

The 2021-22 Budget provides $20 million to support ongoing capital projects, including the Prince Albert Victoria Hospital’s redevelopment, urgent care centres in Regina and Saskatoon, long-term care facilities in La Ronge and Grenfell, and the replacement of the Weyburn General Hospital. The Budget also includes an additional $1.1 million to begin planning activities for long-term care facilities in Watson, Estevan and Regina.

28  Budget 2021-22

Government will continue to focus on the preservation and maintenance of health care infrastructure to further strengthen the capacity of our system and provide high-quality care to Saskatchewan people. The Budget includes $81.2 million for ongoing maintenance and major renovations to existing health facilities.

The 2021-22 Budget contains $59.8 million for the replacement and repair of medical equipment and to support health care IT projects, including the scheduled replacement of medical linear accelerators at provincial cancer centres.

Government has invested over $1.9 billion in the construction of new health facilities, facility renewals, and equipment since 2008-09. This includes the new Saskatchewan Hospital North Battleford, Jim Pattison Children’s Hospital in Saskatoon, Dr. F. H. Wigmore Hospital in Moose Jaw, and multiple long-term care facilities across the province. During this time, capital improvements have been completed at numerous health facilities, including the Humboldt Hospital, Prince Albert Youth Addictions Treatment Centre, Lloydminster Hospital, and the Dubé Centre for Mental Health.

Government has invested over $1.9 billion in the construction of new health facilities, facility renewals and equipment since 2008-09.

Government Services

Government services capital spending includes the rehabilitation of provincial dams and water supply channels, upgrades to courts and correctional facilities, IT projects, parks and recreation facilities,

environmental protection, and support for other government programs. Over the course of the plan, Government will invest approximately $1.1 billion in these areas to support high-quality program and service delivery, including $324.2 million provided in the 2021-22 Budget.

As part of the Government’s initiative to rehabilitate water dams and supply channels, the 2021-22 Budget includes $70.1 million. This funding provides for various infrastructure projects, including the Lake Diefenbaker Irrigation Expansion Project which will promote Saskatchewan’s economic growth by expanding its irrigation capacity, diversifying into higher-value crop production, attracting more value-added processing, and adding to long-term food security.

The 2021-22 Budget provides $16.5 million for capital improvements and upgrades to provincial parks. Planned capital improvements in parks for 2021-22 include new group pavilions for Pike Lake, Blackstrap, Echo Valley and Buffalo Pound Provincial Parks; a new serviced campground at Cypress Hills Interprovincial Park; new campground service centres for Saskatchewan Landing and The Battlefords Provincial Parks; interior and exterior refurbishing at the historic Holy Trinity Church in Lac La Ronge; and various other improvements. Since 2007-08, over $160 million has been invested in park infrastructure improvements, including electrical expansion to over 2,000 campsites, four campground developments providing over 300 new campsites, 33 new or replaced campground service centres, as well as major improvements to water and wastewater systems, roads, boat launches, and trails.

To protect the people of Saskatchewan, investment in public safety remains a Government priority. The Budget provides $17.8 million to the Saskatchewan Public Safety Agency for major upgrades and equipment replacement, including the modernization of the province’s wildfire aerial fleet.

Budget 2021-22   29

The 2021-22 Budget also includes approximately $52 million for a remand expansion at the Saskatoon Correctional Centre. The remand centre will offer a modern facility to hold remand accused persons taken into custody securely. It will consist of two units collectively containing 216 cells capable of holding 427 people.

Commercial Crowns

Substantial investments in Saskatchewan’s public utility infrastructure are planned to ensure the safety and integrity of aging infrastructure. Saskatchewan’s Crown sector will invest approximately $1.6 billion in 2021-22 to maintain and enhance utility infrastructure while supporting economic recovery. Over the next four years, Government will invest over $6 billion to ensure safe, reliable and high-quality services are available for the people of Saskatchewan.

Through SaskPower, the Government will invest $937.6 million in improvements to the province’s electricity system to meet growing customer demand, maintain reliability and advance environmental mandates. Planned investments include constructing a new 350 MW natural gas-fired electrical plant at Moose Jaw, unit extensions at the EB Campbell hydroelectric station, and rebuilding transmission power lines.

The 2021-22 Budget invests $276.8 million in the province’s natural gas distribution system through SaskEnergy. These investments will ensure the integrity, reliability, and regulatory compliance of infrastructure; and expand the transmission system. Notable transmission capacity projects include Rosetown to Vanscoy gas line expansion, the Southwest Saskatchewan expansion and the Pierceland supply expansion.

The 2021-22 Budget supports SaskTel’s vision to be the best at connecting people to their world by investing $323.2 million in the province’s information and communications technology infrastructure. Capital investments will include sustainment projects that support quality networks and meet the wireless growth demand, upgrades to broadband facilities and fibre optic networks, and completion of the Wireless Saskatchewan program.

Since 2008-09, Government has invested approximately $20.4 billion through the Crown sector in public utility and infrastructure services. The projects completed during this period include replacing the ultrafiltration modules at the Gravelbourg water treatment plant, a new natural gas-fired power station located near Swift Current, and improving digital communications between rural and major centres through the Regional Ethernet Transport Strategy.

Capital Plan Financing

The Capital Plan balances the need for infrastructure investments to support a growing province and stimulate economic recovery while preserving the province’s long-term fiscal health.

Capital expenditures will continue to be funded through a disciplined financing strategy to ensure that Saskatchewan’s Growth Plan goal of investing over $30 billion in infrastructure by 2030 is fiscally sustainable and matches the benefits of the assets with the term of payments.

Low interest rates, combined with the Province’s excellent credit rating, continue to make this a cost-effective time to finance capital.

30  Budget 2021-22

T E C H N I C A L   P A P E R S

THE SASKATCHEWAN ECONOMY

INTRODUCTION

Saskatchewan faces challenges as a result of the unprecedented impact of the COVID-19 health emergency and weak oil prices in 2020.

Most economic indicators suggest the impact of these events on the Saskatchewan economy appear to have been less than initially forecast for 2020.

In 2021, Saskatchewan’s economy is expected to continue on a path of recovery as global demand and oil prices recover. In addition, business and consumer confidence is expected to regain momentum.

Overall, Saskatchewan’s real gross domestic product (GDP) and nominal GDP are forecast to grow in 2021 by 3.4 per cent and 5.9 per cent, respectively.

GLOBAL ECONOMIC OUTLOOK

Global economic performance in 2020 was significantly impacted by the spread of COVID-19. The lockdowns and restrictions on economies not only limited consumer activities, but also affected business confidence. In April 2020, oil prices crashed into negative territory for the first time in history due to the sudden collapse in global demand.

In 2020, the global economy was in recession with the exception of China. The Chinese economy experienced growth of 1.7 per cent, which was well below its initial target range of 6.0 per cent growth.

Among other developed economies, the Eurozone economy was impacted the most and is expected to contract by 7.1 per cent. Contractions are expected elsewhere but to a lesser extent – the Canadian economy by 6.0 per cent, the Japanese economy by 5.2 per cent, and the U.S. economy by 3.5 per cent.

GLOBAL REAL GDP GROWTH ASSUMPTIONS

Sources: Bank of Canada (January 2021), IHS (December 2020)

32  Budget 2021-22

Supported by governments’ fiscal stimulus measures, central banks’ accommodative monetary policy, and vaccine availability and their subsequent roll out, global economic recovery is expected by most countries beginning in 2021.

Uncertainties and challenges remain and will affect the pace of recovery in both the near and medium terms.

Forecasts for 2021 and 2022 show a quick rebound for China’s economy, with growth of 8.4 per cent and 5.4 per cent, respectively. Over the same period, the Eurozone economy is expected to grow by 4.4 per cent and 4.5 per cent.

Japan’s economic recovery is expected to be moderate, growing by 2.8 per cent in 2021 and 1.9 per cent in 2022.

The U.S. economy has been less impacted by the pandemic than Canada because, although similar strong fiscal and monetary stimuli were in place, the U.S. utilized less restrictive containment and public health measures.

Expected continuity of both fiscal stimulus measures and favourable quantitative easing is forecast to result in real GDP growth for the U.S. of 3.1 per cent in 2021 and 2.5 per cent in 2022.

CANADIAN ECONOMIC OUTLOOK

Canada’s economy was significantly and negatively impacted by the pandemic, the global recession, and weak oil prices and demand. No sector was immune.

Canada’s real GDP contracted by annualized rates of 7.5 per cent and 38.5 per cent, in the first and second quarters of 2020, respectively. In the third quarter, the combined gradual reopening of the economy, increasing household consumption, strengthening of residential and business investment, and recovering exports resulted in a quick rebound with an annualized rate of 40.6 per cent growth. Fourth-quarter growth returned to a moderate pace of 9.6 per cent. Overall, Canada’s real GDP declined by 5.4 per cent in 2020.

Canada’s real GDP is expected to grow by 3.7 per cent in 2021 and by 3.6 per cent in 2022.

CANADIAN AND U.S. ECONOMIC ASSUMPTIONS

	Actual 2020			2021		2022		2023		2024		2025
Can. Real GDP Growth (%)		(5.4	)		3.7		3.6		2.2		2.2		2.1
U.S. Real GDP Growth (%)		(3.5	)		3.1		2.5		2.5		2.9		3.0
Short-term Interest Rate (%)		0.45			0.17		0.20		0.50		0.88		1.38
10-year Government of Canada Bond (%)		0.77			0.81		1.08		1.30		1.47		1.72
Canadian Dollar (US cents)		74.60			78.80		80.00		81.20		82.30		81.60

      Sources: Statistics Canada (March 2021), IHS (December 2021), Ministry of Finance (March 2021)

Budget 2021-22   33

CANADIAN AND U.S. INTEREST RATES

Source: Bank of Canada (March 2021)

Both the Bank of Canada and the U.S. Federal Reserve have been easing interest rates to cope with the unprecedented and combined impacts of the pandemic and oil price crash. In 2020, the Bank of Canada cut its overnight lending rate three times for a total of 150 basis points, from 1.75 per cent in February to 0.25 per cent in December. Comparatively, U.S federal fund rates dropped by a total of 146 basis points, from approximately 1.55 per cent in early 2020 to approximately 0.10 per cent in December.

The value of the Canadian dollar has been under pressure due to slow economic growth and weak oil prices. In 2020, it weakened from 76.4 U.S. cents in January to 71.1 U.S. cents in April.

With the improvement of West Texas Intermediate (WTI) oil prices and the strong economic rebound in the third quarter of 2020, the value of the Canadian dollar has continued to rise.

The value of the Canadian dollar is expected to average 78.8 U.S. cents in 2021 and 80.0 U.S. cents in 2022.

CANADIAN DOLLAR AND WTI PRICES

Sources: Bank of Canada (March 2021),

               Ministry of Energy and Resources (March 2021)

SASKATCHEWAN PERFORMANCE IN 2020

Saskatchewan’s economy has been affected by both the global pandemic and the fall in oil prices. Without exception, all key economic indicators were down significantly during the first few months of public health restrictions.

Implementation of the government’s five-phased Re-Open Saskatchewan plan combined with government financial support measures resulted in gradual economic improvements commencing in late May. As such, some sectors of the economy are outperforming those in other provinces.

Total employment in Saskatchewan declined by 70,400 in April 2020 compared to April 2019. The level of job losses has gradually improved since April 2020.

Despite an average of 26,800 job losses reported in 2020, Saskatchewan had the highest employment rate and the second-lowest unemployment rate in all of Canada.

For 2020, Saskatchewan’s unemployment rate averaged 8.4 per cent, well below the national average of 9.6 per cent. Additionally, the provincial employment rate averaged 61.3 per cent, well above the Canadian average of 58.0 per cent.

34  Budget 2021-22

EMPLOYMENT RATES IN 2020

Source: Statistics Canada (March 2021)

Since the onset of the pandemic in March 2020, some provincial economic indicators have in fact performed well during 2020 and experienced year-to-date positive growth when compared with the same period in 2019.

For example, compared to the national average Saskatchewan had the highest growth in new housing starts (24.2 per cent increase), the highest growth in wholesale trade (4.4 per cent increase), and the highest growth in international exports (2.2 per cent increase).

Average weekly earnings grew by 5.4 per cent, the seventh-highest growth in Canada.

Saskatchewan’s performance in manufacturing sales and investment in building construction, however, remained weak and below the national average.

Some economic indicators were significantly and negatively impacted by COVID-19, but overall, the impacts were smaller than those in other provinces.

Sales at food services and drinking places declined by 21.3 per cent, the smallest decline in Canada. The Canadian average decline for these sales was 31.5 per cent.

SASKATCHEWAN ECONOMIC INDICATORS IN 2020

	Saskatchewan				Canada       Per Cent      Change
	Level	Per Cent Change		Rank
Population at Jan. 1 (000s)	1,178.8	(0.0	)	9	0.4
Employment (000s)	544.1	(4.7	)	5	(5.2)
Unemployment Rate (%)	8.4	8.4		2nd lowest	9.6
Employment Rate (%)	61.3	61.3		1	58.0
Consumer Price Index (2002=100)	141.9	0.6		5	0.7
Average Weekly Earnings ($)	1,092.5	5.0		7	6.7
Retail Sales ($B)	19.3	(1.0	)	7	(1.4)
Wholesale Trade ($B)	27.1	3.0		1	(1.0)
New Motor Vehicle Sales (# of units)	38,719	(15.1	)	3	(20.9)
Food Services and Drinking Places Sales ($M)	1.6	(17.8	)	1	(28.2)
Manufacturing Sales ($B)	13.4	(14.0	)	7	(11.4)
International Goods Exports ($B)	30.4	2.5		1	(12.2)
Building Permits ($B)	1.4	(12.9	)	9	(2.3)
Housing Starts (# of units)	3,087	27.2		1	4.4
Investment in Building Construction ($B)	3.1	(18.1	)	10	(2.0)
Residental ($B)	1.9	(15.5	)	10	(1.8)
Non-Residential ($B)	1.2	(21.9	)	9	(2.3)

        Source: Statistics Canada (March 2021)

Budget 2021-22   35

ECONOMIC PERFORMANCE DURING THE PANDEMIC

(March to December 2020 versus March to December 2019)

  

    Source: Statistics Canada (March 2021)

Saskatchewan had the fourth-lowest decline in new motor vehicle sales at 16.8 per cent while these sales declined by 22.9 per cent nationally.

COMMODITIES PERFORMANCE AND OUTLOOK

Saskatchewan’s economy is expected to continue a path of recovery in 2021 supported by both an increase in consumer and business confidence, and improvements in commodity markets.

In 2020, Saskatchewan recognized its second-largest crop on record. Total crop production is estimated at 39.1 million tonnes, an increase of 0.6 per cent from 2019.

On a 10-year average basis, total crop production in Saskatchewan increased by 43.3 per cent from an average 24.0 million tonnes during the 2001-10 period to 34.4 million tonnes during the 2011-20 period.

Total crop production is expected to rise to 41.5 million tonnes by 2025.

SASKATCHEWAN CROP PRODUCTION

(Second-highest production in 2020

at 39.01 million tonnes)

Sources: Statistics Canada (November 2020),

               Ministry of Agriculture (January 2021)

Despite a weakening of potash prices, from $511.03 per K₂O tonne in 2019 to $387.85 per K₂O tonne in 2020, Saskatchewan’s potash production recorded the second-highest level at 13.6 million tonnes.

36  Budget 2021-22

The price of potash is expected to improve slightly to $396.48 per K₂O tonne in 2021 and strong global demand for potash is expected to continue over the forecast period. As such, total potash production is anticipated to reach 15.2 million K₂O tonnes by 2025.

SASKATCHEWAN POTASH PRICE AND PRODUCTION

(Second-highest production in 2020

at 13.6 million tonnes)

Source: Ministry of Energy and Resources (February 2021)

Due to the temporary shutdowns at the Cigar Lake mine, uranium production dropped significantly in 2020. Uranium production is expected to return to a nominal pace when operations are resumed.

Uranium does not trade on an open market like other commodities; buyers and sellers negotiate contracts privately. Prices are published by independent market consultants and are expected to remain relatively flat over the medium term.

The sudden drop in global demand for oil resulted in an oil price crash in April of 2020. The WTI oil price dropped from an average high of US$57.50 per barrel in January to an average of US$16.70 per barrel in April.

Since then, the WTI oil price gradually increased to an average of US$47.10 per barrel in December.

The WTI oil price is expected to average US$55.00 per barrel in both 2021 and 2022, up from US$39.40 per barrel in 2020.

Impacted by weak oil prices, drilling activity declined significantly from 1,880 wells in 2019 to 1,057 wells in 2020. With the expected improvement to oil prices over the forecast period, the total number of wells drilled is likewise forecast to improve, with a modest increase to 1,250 in 2021 and up to a total of 3,000 by 2025.

WTI OIL PRICE AND OIL WELLS DRILLED

Source: Ministry of Energy and Resources (March 2021)

Historically, oil prices have significantly affected Saskatchewan’s economic performance. For example, when the WTI price dropped from an average of US$99.60 per barrel in 2008 to an average of US$61.80 per barrel in 2009, Saskatchewan’s real GDP subsequently declined by 5.3 per cent.

Budget 2021-22   37

COMMODITY PRICE ASSUMPTIONS – CALENDAR YEAR

	2020		2021		2022		2023		2024		2025
WTI Oil (US$/barrel)		39.4		55.0		55.0		56.0		57.5		59.0
Well-head Oil (C$/barrel)		34.8		50.0		49.3		49.6		50.2		52.2
Natural Gas (C$/GJ)		2.3		2.8		2.8		2.8		2.8		2.9
Potash (C$/K2O tonne)1		387.9		396.5		396.2		398.3		403.1		415.9
Potash (US$/KCl tonne)1		176.5		190.6		193.4		197.3		202.4		207.0
Wheat (C$/tonne)		224.2		234.0		232.1		232.4		235.2		235.6
Canola (C$/tonne)		468.7		477.4		470.4		476.9		479.7		480.4

¹ The potash industry quotes prices in US dollars per KCl tonne. Provincial royalty calculations, however, are based on the Canadian dollar price per K₂O tonne.

Sources: Ministry of Energy and Resources (March 2021), Ministry of Agriculture (January 2021)

REAL GDP AND WTI OIL PRICES

Conversely, when the WTI price recovered, to US$72.90 per barrel in 2010 and to US$76.70 per barrel in 2011, Saskatchewan’s real GDP displayed growth of 4.7 per cent and 5.3 per cent, respectively, in each of those years.

Impacted by the pandemic and weak oil prices, Saskatchewan’s real GDP and nominal GDP are expected to decline by 4.2 per cent and 7.8 per cent in 2020, respectively.

With the rollout of vaccinations, global economic recovery, improving oil prices and demand and an increase in consumer and business confidence, Saskatchewan’s real GDP is expected to improve and rise by 3.4 per cent in 2021 and 3.2 per cent in 2022.

Nominal GDP is forecast to increase by 5.9 per cent and 4.1 per cent, respectively, in 2021 and 2022. Continued economic recovery is expected throughout the forecast period.

38  Budget 2021-22

SASKATCHEWAN FORECAST AT A GLANCE

(Per Cent Change Unless Otherwise Noted)

	2020			2021		2022		2023		2024		2025
Real GDP		(4.2	)		3.4		3.2		2.5		2.3		2.9
Nominal GDP		(7.8	)		5.9		4.1		3.2		3.4		4.3
CPI*		0.6			1.2		1.5		1.6		1.7		1.6
Employment Growth (000s)*		(26.8	)		15.7		7.9		6.1		6.0		6.8
Unemployment Rate (%)*		8.4			6.5		6.4		6.0		5.7		5.4
Retail Sales*		(1.0	)		3.2		3.3		3.3		3.2		3.3

* 2020 actual

Source: Ministry of Finance (March 2021)    

FORECAST COMPARISON

All private sector forecasters expect Saskatchewan’s economy to recover beginning in 2021.

On average, private sector forecasters expect Saskatchewan’s real GDP to grow by 4.6 per cent in 2021, after their predicted 5.2 per cent contraction in 2020.

These forecasts range from a low of 3.3 per cent to a high of 5.9 per cent.

While private sector forecasts differ from this budget’s assumptions of a 4.2 per cent contraction in 2020 and 3.4 per cent growth in 2021, total growth over the two-year period is similar.

Saskatchewan’s real GDP growth outlook ranked fifth amongst all provinces in both 2020 and 2021, according to the private sector forecasts.

PRIVATE SECTOR REAL GDP GROWTH FORECASTS FOR SASKATCHEWAN*    

(Per Cent)    

	2020			2021		Total   Growth			Release     Date
IHS Global Insight		(6.1	)		3.3		(2.8	)		Jan./21
Conference Board of Canada		(5.2	)		5.4		0.2			Mar./21
TD Bank		(5.6	)		4.7		(0.9	)		Dec./20
RBC		(4.2	)		5.2		1.0			Mar./21
BMO		(5.0	)		4.5		(0.5	)		Dec./20
CIBC		(5.2	)		4.1		(1.1	)		Jan./21
Scotiabank		(5.2	)		5.9		0.7			Mar./21
National Bank		(5.0	)		4.5		(0.5	)		Dec./20
Laurentian Bank		(5.0	)		4.0		(1.0	)		Jan./21
Average of Private Sector Forecasts		(5.2	)		4.6		(0.5	)
2021-22 Budget Forecast		(4.2	)		3.4		(0.8	)

  * As of March 12, 2021    

Budget 2021-22   39

PRIVATE SECTOR FORECASTS OF REAL GDP GROWTH BY PROVINCE*

(Per Cent Change)

	2020			Rank		2021		Rank		2022		Rank
British Columbia		(5.2	)		6		5.0		1		4.3		3
Alberta		(7.1	)		10		4.9		4		4.6		1
Saskatchewan		(5.2	)		5		4.6		5		3.6		6
Manitoba		(4.3	)		4		4.2		7		3.6		5
Ontario		(5.7	)		8		4.9		2		4.3		2
Québec		(5.4	)		7		4.9		2		4.0		4
New Brunswick		(3.7	)		2		4.0		8		3.0		10
Nova Scotia		(4.1	)		3		4.3		6		3.3		8
Prince Edward Island		(3.7	)		1		4.0		9		3.5		7
Newfoundland and Labrador		(5.8	)		9		3.9		10		3.1		9
Canada		(5.5	)				4.8				4.2

    * As of March 12, 2021

CONCLUSION

Saskatchewan, like other small, open economies, experienced an exceptionally challenging year due to COVID-19 and weak oil prices. Saskatchewan’s economy, however, was less severely impacted than was originally estimated in the early part of 2020. With the combination of vaccine availability, global economic recovery, oil price and demand improvement, and consumer and business confidence rising, Saskatchewan’s real GDP is expected to regain momentum on a path to recovery over the forecast period. Overall, Saskatchewan’s real GDP is expected to grow by 3.4 per cent in 2021 and by 3.2 per cent in 2022. Nominal GDP is expected to increase by 5.1 per cent in 2021 and 4.2 per cent in 2022.

40  Budget 2021-22

2021-22 FINANCIAL OUTLOOK

OVERVIEW

The Saskatchewan Provincial Budget includes the financial activity for all organizations within the control of the Government of Saskatchewan, including Government Service Organizations (GSOs), Government Business Enterprises (GBEs) and government partnerships.

The inclusion of these organizations is based on standards established by the Public Sector Accounting Board (PSAB) for senior Canadian governments, and the method of consolidating these entities in the budget is consistent with the policies described in the Saskatchewan Public Accounts.

All organizations in the budget, with the exception of GBEs, are defined as GSOs or – in situations where Government has entered into a contractual relationship with one or more parties and share risks and benefits – a government partnership. GSOs typically provide public services and receive Government grants to sustain their operations. Examples of GSOs include Government of Saskatchewan ministries, as well as entities such as the Saskatchewan Health Authority, Boards of Education, the Saskatchewan Housing Corporation and the Water Security Agency.

The revenue and expense budgets of GSOs (and Government’s proportionate share of partnership revenue and expense) are consolidated after adjusting for differences in accounting policies and eliminating inter-organizational transactions. Adjustments are made to account for differences in entity year-ends that do not align with the Government of Saskatchewan’s year-end of March 31.

GSO revenue is classified into four major categories (taxes, non-renewable resources, federal transfers and other own sources), while GSO expense is classified into 11 expense themes. In some cases, particularly with executive government ministries, an entity’s expense can be allocated across more than one theme depending on the purpose of the activity.

GBEs are self-sufficient and have the authority to sell goods and services to external parties as their principal activity. Budgets for GBEs are incorporated as a single amount in a fifth revenue category called “Net Income from Government Business Enterprises” using the modified-equity method, which includes the Government of Saskatchewan’s proportionate share of net earnings or losses.

The 2021-22 Budget estimates a deficit of $2.6 billion.

FINANCIAL OVERVIEW

	2018-19			2019-20			2020-21			2021-22
(millions of dollars)	Actual			Actual			Forecast			Budget
Revenue		14,502			14,887			14,096			14,478
Expense		14,769			15,206			15,961			17,089
Deficit		(268	)		(319	)		(1,865	)		(2,611	)

Totals may not add due to rounding.

Budget 2021-22   41

2021-22 REVENUE RECONCILIATION

	2020-21		2021-22		Change
(millions of dollars)	Forecast		Budget		Dollars			Per Cent
Taxation		6,706.2		7,238.0		531.8			7.9
Non-Renewable Resources		1,096.2		1,328.5		232.3			21.2
Net Income from GBEs		1,104.9		899.2		(205.7	)		(18.6	)
Other Own-Source Revenue		1,969.1		2,104.1		135.0			6.9
Transfers from the Federal Government		3,219.3		2,908.5		(310.8	)		(9.7	)
Total Revenue		14,095.7		14,478.3		382.6			2.7

REVENUE

The revenue outlook included in the 2021-22 Budget includes all tax and other revenue measures presented in the budget, as well as changes to provincial fees and charges announced in advance of the budget.

Total revenue is forecast to be $14.5 billion in 2021-22, an increase of $383 million (2.7 per cent) from the 2020-21 forecast. The increase is largely due to higher tax revenue, non-renewable resources revenue and other own-source revenue, partially offset by a decrease in federal transfers and lower net income from GBEs.

Relative to the 2020-21 Budget, revenue is up $830 million, or 6.1 per cent, reflecting increases across all categories.

Despite the year-over-year improvement in the revenue outlook for 2021-22, after accounting for the forgone tax revenue due to the Home Renovation Tax Credit and small business tax rate reduction, this year’s revenue budget of $14.5 billion is $1.0 billion lower than what was projected in the 2019-20 Budget prior to the onset of the COVID-19 pandemic and the oil price collapse.

Tax Revenue

Tax revenue is budgeted at $7.2 billion in 2021-22 and accounts for 50 per cent of total revenue. This is an increase of $532 million, or 7.9 per cent, from the 2020-21 forecast.

Corporation Income Tax (CIT) revenue is budgeted at $755 million, an increase of $336 million from the 2020-21 forecast. The increase reflects a one-time

TOTAL REVENUE – 2018-19 TO 2021-22

(millions of dollars)	2018-19 Actual		2019-20 Actual		2020-21 Budget		2020-21 Forecast		2021-22 Budget
Taxation		7,116.7		7,553.3		7,202.8		6,706.2		7,238.0
Non-Renewable Resources		1,735.1		1,750.3		997.4		1,096.2		1,328.5
Net Income from GBEs		1,011.2		855.3		728.8		1,104.9		899.2
Other Own-Source Revenue		2,128.3		2,138.4		1,933.1		1,969.1		2,104.1
Transfers from the Federal Government		2,510.3		2,589.8		2,786.6		3,219.3		2,908.5
Total Revenue		14,501.6		14,887.1		13,648.7		14,095.7		14,478.3

42  Budget 2021-22

COMPOSITION OF 2021-22 REVENUE

negative adjustment recorded in 2020-21 for prior-year assessments. In addition, CIT revenue is forecast to increase this year as a result of a higher federal forecast of the 2021 and 2022 national corporate tax base, partially offset by the full-year impact of the temporary small business income tax rate reduction to 0 per cent.

Individual Income Tax revenue is budgeted at $2.4 billion, a $44 million decrease from the 2020-21 forecast, primarily due to an expected prior-year

negative adjustment as a result of anticipated weakness in 2020 assessments, combined with the full-year impact of the Saskatchewan Home Renovation Tax Credit, partially offset by anticipated growth in the 2021 and 2022 tax base.

Provincial Sales Tax (PST) revenue is budgeted at $2.1 billion, an increase of $173 million from the 2020-21 forecast. The increase is consistent with the expected post-COVID recovery in the Saskatchewan

TAX REVENUE – 2018-19 TO 2021-22

									Change from
	2018-19		2019-20		2020-21		2021-22		2020-21 Forecast
(millions of dollars)	Actual		Actual		Forecast		Budget		Dollars			Per Cent
Corporation Income Tax		585.5		787.5		418.5		754.6		336.1			80.3
Fuel Tax		555.6		507.9		444.0		477.9		33.9			7.6
Individual Income Tax		2,340.0		2,629.1		2,465.0		2,420.8		(44.2	)		(1.8	)
Property Tax		763.3		774.0		773.0		784.8		11.8			1.5
Provincial Sales Tax		2,224.8		2,205.8		1,971.1		2,144.0		172.9			8.8
Tobacco Tax		236.4		206.8		201.7		201.8		0.1			0.0
Other Taxes		411.1		442.2		432.9		454.1		21.2			4.9
Total		7,116.7		7,553.3		6,706.2		7,238.0		531.8			7.9

Budget 2021-22   43

NON-RENEWABLE RESOURCE REVENUE – 2018-19 TO 2021-22

									Change from
	2018-19 Actual		2019-20 Actual		2020-21 Forecast		2021-22 Budget		2020-21 Forecast
(millions of dollars)									Dollars		Per Cent
Crown Land Sales		58.1		17.1		6.7		9.2		2.5		37.3
Oil and Natural Gas		681.6		667.8		362.3		505.1		142.8		39.4
Potash		536.0		554.4		404.5		431.8		27.3		6.7
Resource Surcharge		393.8		413.3		265.8		302.6		36.8		13.8
Other		65.6		97.6		56.9		79.8		22.9		40.2
Total		1,735.1		1,750.3		1,096.2		1,328.5		232.3		21.2

economy, including growth in population, household spending and business investment. However, the 2021-22 Budget includes a $52 million reduction in PST revenue compared to last year’s budget as a result of a new accounting treatment that eliminates the PST paid on capital purchases by ministries and certain GSOs in the summary budget.

All remaining taxes are budgeted to increase by a combined $67 million, including a $34 million increase in Fuel Tax revenue as a result of the rebound in economic activity, a $21 million increase in other taxes, mainly comprised of a return to normal collection levels of Corporation Capital Tax and Liquor Consumption Tax, and a $12 million

increase in Property Tax revenue, reflecting changes to Education Property Tax mill rates in line with year-over-year inflation.

Non-Renewable Resource Revenue

Non-renewable resource revenue is budgeted at $1.3 billion, or 9 per cent of total revenue, in 2021-22. This is a $232 million, or 21.2 per cent, increase from the 2020-21 forecast.

Oil and natural gas royalties are budgeted at $505 million in 2021-22, an increase of $143 million from the 2020-21 forecast. The increase is primarily due to an increase in West Texas Intermediate (WTI)

WTI OIL PRICES AND THE CANADIAN DOLLAR

44  Budget 2021-22

NON-RENEWABLE RESOURCE FORECAST ASSUMPTIONS – FISCAL YEAR

	2018-19		2019-20		2020-21		2021-22
	Actual		Actual		Forecast		Budget
WTI Oil Price (US$/barrel)		62.87		54.80		42.27		54.33
Light-Heavy Differential (% of WTI)		31.8		20.9		18.1		19.7
Well-head Oil Price (C$/barrel)1		54.58		52.54		39.05		49.31
Oil Production (million barrels)		178.6		178.9		154.0		160.0
Potash Price (mine netback, US$/KCl tonne)2		215		223		180		191
Potash Price (mine netback, C$/K O tonne)2		457		490		390		396
Potash Sales (million K2O tonnes)2		13.4		12.7		14.0		14.3
Canadian Dollar (US cents)		76.23		75.19		75.70		79.12

¹ The average price per barrel of Saskatchewan light, medium and heavy oil.

² Ministry of Finance calculations derived from calendar-year forecasts.

oil prices and a forecast increase in production, partially offset by a higher exchange rate forecast and a wider light-heavy oil price differential.

WTI oil prices are forecast to average US$54.33 per barrel in 2021-22, consistent with private sector forecasts. This is a US$12.06 per barrel increase from the 2020-21 average price forecast of US$42.27 and reflects current market optimism as the world starts to recover from COVID-19 and its corresponding decline in demand.

WTI oil prices are an important benchmark for the oil market and provincial revenue. However, the majority of oil produced in Saskatchewan is heavier and more sour than WTI oil and requires further processing to become refined products. As a result, Saskatchewan oil typically trades at a discount to WTI oil. Increasing production in Western Canada and North Dakota, as well as pipeline and transportation capacity constraints, have also contributed to a general widening of the price discount for Saskatchewan oil in recent years.

The light-heavy oil price differential – a proxy for the price discount on oil produced in Saskatchewan – is expected to increase from 18.1 per cent (as a share of WTI prices) in 2020-21 to 19.7 per cent in 2021-22.

The value of the Canadian dollar is projected to average 79.1 U.S. cents in 2021-22, up from an average of 75.7 U.S. cents in 2020-21. As the price of Saskatchewan oil at the well-head is generally determined based on prevailing prices in the United States, a higher exchange rate translates to lower prices in Canadian dollars, all else being equal.

The result of these factors is a 2021-22 well-head oil price forecast, in Canadian dollars, of $49.31 per barrel, up from the 2020-21 average well-head price of $39.05.

Finally, oil production is forecast at 160.0 million barrels in 2021-22, up from the 2020-21 forecast of 154.0 million barrels as demand continues to increase.

Revenue from the Resource Surcharge is forecast to increase $37 million from the 2020-21 forecast, primarily reflecting continued recovery in the resource sector, including increasing WTI oil prices and higher average potash prices.

Potash revenue is budgeted at $432 million in 2021-22, up $27 million from the 2020-21 forecast. The outlook incorporates increases in both average price and sales volume forecasts.

Budget 2021-22   45

In 2021-22, average realized prices are forecast at US$191 per KCl tonne (C$396 per K₂O tonne), up from US$180 (C$390) in 2020-21. The potash forecast incorporates a small increase in sales in 2021-22, from 14.0 million K₂O tonnes in 2020-21 to 14.3 million K₂O tonnes.

Revenue from Crown land sales and all other non-renewable resources (including uranium, coal and other minerals) is forecast to increase by $25 million, mainly due to higher uranium revenue, reflecting the expected resumption of production at the Cigar Lake mine.

The economic and fiscal forecasts in the 2021-22 Budget rely on a set of assumptions regarding Canadian, U.S. and global economic growth, commodity prices and the value of the Canadian dollar. These factors are beyond government’s control, yet they heavily influence Saskatchewan’s fiscal performance, particularly non-renewable resource revenue.

The ongoing COVID-19 pandemic, along with OPEC decisions, transportation disruptions and exchange rate volatility have the potential to impact resource revenue this year. In an attempt to minimize risk to the fiscal plan, the assumptions used to develop the

non-renewable resource forecast are prudent and incorporate a number of private sector forecasts. But because of the volatile nature of these key external factors, the non-renewable resource revenue forecast will always be subject to risk. This risk is quantified throughout the year.

For 2021-22, the following sensitivities are estimated:

• a US$1 per barrel change in the fiscal-year average WTI oil price results in an estimated $14 million change in oil royalties;

• a US$10 per KCl tonne (C$21 per K₂O tonne) change in the fiscal-year average realized potash price results in an estimated $43 million change in potash royalties; and,

• a 1 U.S. cent change in the fiscal-year average exchange rate results in an estimated $20 million change in non-renewable resource revenue.

Net Income from Government Business Enterprises

Government Business Enterprise (GBE) net income is forecast at $899 million in 2021-22 and accounts for 6 per cent of budgeted revenue. This is a $206 million decrease from the current 2020-21

NET INCOME FROM GOVERNMENT BUSINESS ENTERPRISES – 2018-19 TO 2021-22

													Change from
	2018-19			2019-20			2020-21			2021-22			2020-21 Forecast
(millions of dollars)	Actual			Actual			Forecast			Budget			Dollars			Per Cent
Saskatchewan Auto Fund		77.5			(46.7	)		213.0			192.1			(20.9	)		(9.8	)
Saskatchewan Gaming Corporation		22.5			20.1			(7.1	)		11.5			18.6			(262.0	)
Saskatchewan Government Insurance		48.0			49.9			135.8			40.0			(95.8	)		(70.5	)
Saskatchewan Liquor and Gaming Authority		485.1			470.3			326.6			423.4			96.8			29.6
SaskPower		231.2			204.8			136.4			16.7			(119.7	)		(87.8	)
SaskTel		123.1			115.4			126.0			100.0			(26.0	)		(20.6	)
SaskEnergy		165.7			43.5			58.9			49.7			(9.2	)		(15.6	)
Workers’ Compensation Board		(153.6	)		(12.3	)		111.1			(1.3	)		(112.4	)		(101.2	)
Other		11.7			10.4			4.2			67.1			62.9			1,497.6
Total		1,011.2			855.4			1,104.9			899.2			(205.7	)		(18.6	)

46  Budget 2021-22

forecast, largely reflecting a budgeted return to normal levels of investment returns at Saskatchewan Government Insurance (SGI), Workers’ Compensation Board and the Auto Fund, following large gains in 2020-21. In addition, higher operating costs and depreciation are projected to reduce net income at SaskPower in 2021-22.

These declines are partially offset by higher net income at Saskatchewan Liquor and Gaming Authority and Saskatchewan Gaming Corporation under the assumption of a re-opening of the entertainment sector and an improvement in overall economic conditions in 2021.

GBE net income in the 2021-22 Budget also includes a $64.4 million consolidation adjustment to recognize federal and provincial revenue to be received by SaskPower for capital projects, for which there is an offsetting expense in the Economic Development theme as the funding will flow through SaskBuilds Corporation.

Other Own-Source Revenue

Other own-source revenue includes fees for services and licenses, proceeds from the sale of goods and services, investment income, fees collected by insurance entities and other miscellaneous sources of revenue. Most government organizations generate own-source revenue in order to finance additional spending not funded by government grants.

Other own-source revenue is budgeted at $2.1 billion in 2021-22 and accounts for 15 per cent of total revenue. This is a $135 million, or 6.9 per cent, increase from 2020-21 and reflects an anticipated return to normal economic conditions following the pandemic.

The 2021-22 Budget includes increases in miscellaneous and fees revenue of $133 million and $38 million, respectively, as both items are budgeted to return to pre-pandemic levels. These gains are partially offset by a $31 million decline in investment income mainly due to lower sinking funding earnings, as well as minor decreases in transfers from other governments ($4 million) and insurance revenue ($2 million).

In total, own-source revenue in the 2021-22 Budget is expected to return to a level slightly less than its 2018-19 to 2019-20 average.

Transfers from the Federal Government

Federal transfers are budgeted at $2.9 billion in 2021-22 and account for 20 per cent of total revenue. This is a $311 million decrease from 2020-21.

The Canada Health Transfer and Canada Social Transfer will increase by $34 million and $12 million, respectively, in 2021-22 in accordance with the legislated funding formula.

OTHER OWN-SOURCE REVENUE – 2018-19 TO 2021-22

									Change from
	2018-19		2019-20		2020-21		2021-22		2020-21 Forecast
(millions of dollars)	Actual		Actual		Forecast		Budget		Dollars			Per Cent
Fees		1,191.8		1,200.2		1,131.8		1,170.0		38.2			3.4
Insurance		290.3		279.3		284.2		282.7		(1.5	)		(0.5	)
Investment Income		113.9		118.6		119.7		88.4		(31.3	)		(26.1	)
Transfers from Other Governments		76.4		77.5		76.8		73.2		(3.6	)		(4.7	)
Miscellaneous		455.8		462.8		356.6		489.8		133.2			37.4
Total		2,128.3		2,138.4		1,969.1		2,104.1		135.0			6.9

Budget 2021-22   47

FEDERAL TRANSFERS – 2018-19 TO 2021-22

									Change from
	2018-19		2019-20		2020-21		2021-22		2020-21 Forecast
(millions of dollars)	Actual		Actual		Forecast		Budget		Dollars			Per Cent
Canada Health Transfer		1,203.3		1,262.7		1,296.5		1,330.4		33.9			2.6
Canada Social Transfer		441.6		456.2		465.2		477.4		12.2			2.6
Other		865.3		870.9		1,457.6		1,100.7		(356.9	)		(24.5	)
Total		2,510.3		2,589.8		3,219.3		2,908.5		(310.8	)		(9.7	)

Other federal transfers are budgeted to decline $357 million compared to the 2020-21 forecast, mainly due to one-time federal contributions in 2020-21 that are not budgeted to repeat, including:

• $338 million for Saskatchewan’s share of the federal Safe Restart Agreement;

• $75 million for Saskatchewan’s share of the federal Safe Return to Class Fund;

• $53 million for Saskatchewan’s share of the federal Essential Workers Support Fund; and,

• $19 million for the finalization of Saskatchewan’s 2016-17 claim under the federal Fiscal Stabilization Program.

These decreases are partially offset by a $100 million increase in federal funding for the Accelerated Site Closure Program, consistent with expected activity under the program.    

EXPENSE

Expense in the 2021-22 Budget is classified into 11 themes, consistent with the presentation in the Saskatchewan Public Accounts. The expenses of all GSOs (and proportionate share of partnerships) within the control of the Government of Saskatchewan, including the GRF, are included.

Total expense is budgeted at $17.1 billion in 2021-22, an increase of $1.0 billion, or 6.3 per cent, from the 2020-21 Budget.

Health, Education and Social Services and Assistance account for almost 70 per cent of the 2021-22 Budget, roughly similar to last year.

COMPOSITION OF 2021-22 EXPENSE

48  Budget 2021-22

Pension expense in the 2021-22 Budget is $433 million higher than last year’s budget. The increase is primarily due to a $415 million deterioration in the pension accrual adjustment to account for pensions on an accrual basis. The deterioration reflects the fall-off of net actuarial gains experienced in 2020-21 and changes in actuarial assumptions, including a lower discount rate to value the Province’s closed defined benefit pension plans.

The change in the pension accrual adjustment accounts for 40 per cent of the overall expense increase in this year’s budget.

Health is budgeted at $6.5 billion, or 38.2 per cent of total expense.

The most significant components of the Health theme are the Ministry of Health, the Saskatchewan Health Authority, eHealth, the Saskatchewan Cancer Agency and 3SHealth.

Health expense is up $359 million (5.8 per cent) compared to the 2020-21 Budget, mostly reflecting:

• $123 million increase for compensation across the sector, mainly for settled bargaining agreements and physician contracts;

• $90 million of new, one-time funding for the health system’s response to COVID-19;

• $81 million increase for general operating costs and high-priority initiatives across the health sector, including investments in mental health and addictions, diagnostic imaging wait times, emergency medical services, drug costs and information security;

• $47 million increase as a result of the consolidation of clinical funding for the College of Medicine from the Education theme; and,

• $18 million increase for 2020 platform commitments, including lowering the cost of seniors’ ambulance fees, adding 300 continuing care aides for long-term and home care and expanding supports for people with diabetes.

2021-22 EXPENSE RECONCILIATION    

	2020-21		2021-22		Change
(millions of dollars)	Budget		Budget		Dollars			Per Cent
Agriculture		798.8		879.3		80.5			10.1
Community Development		762.8		690.4		(72.4	)		(9.5	)
Economic Development		389.8		527.0		137.2			35.2
Education		3,361.9		3,753.2		391.3			11.6
Environment and Natural Resources		362.4		414.9		52.5			14.5
Financing Charges		718.2		755.0		36.8			5.1
General Government1		421.9		524.6		102.7			24.3
Health		6,176.3		6,535.3		359.0			5.8
Protection of Persons and Property		806.5		845.1		38.6			4.8
Social Services and Assistance		1,490.3		1,556.7		66.4			4.5
Transportation		585.8		607.7		21.9			3.7
Health and Public Safety Contingency		200.0		–		(200.0	)		(100.0	)
Total Expense		16,074.7		17,089.2		1,014.5			6.3

¹ General Government expense was previously named Other.    

Budget 2021-22   49

Education is budgeted at nearly $3.8 billion, or 22.0 per cent of total expense.

The most significant components of the Education theme are portions of the Ministries of Advanced Education, Education, and Immigration and Career Training, as well as the Boards of Education, Saskatchewan Polytechnic, Regional Colleges, the Saskatchewan Student Aid Fund and the Saskatchewan Apprenticeship and Trade Certification Commission.

Education expense is up $391 million (11.6 per cent) from last year’s budget.

The majority of the increase is due to a $320 million increase in pension expense, as previously noted, largely as a result of the completion of the amortization of prior-year net actuarial gains in 2020-21 and a decrease in the discount rate used to value pension liabilities.

The 2021-22 Budget also includes $78 million of COVID-19 response funding, including:

• $30 million in new funding as part of a $60 million COVID-19 response package and multi-year funding plan for post-secondary institutions;

• $27 million for career training and employment supports for those disadvantaged by COVID-19; and,

• $21 million to support school divisions as they make preparations for fall 2021.

In addition, there is a $50 million increase in Boards of Education expense, mostly due to salary increases and stimulus maintenance funding. The 2021-22 Budget also includes a $4 million increase for the Saskatchewan Advantage Scholarship.

Partially offsetting these increases is a $47 million decrease reflecting the consolidation of clinical funding for the College of Medicine to the Health theme.

Social Services and Assistance is budgeted at nearly $1.6 billion, or 9.1 per cent of total expense.

The most significant components of this theme are the Ministry of Social Services and portions of the Ministries of Government Relations and Justice and Attorney General. Social Services and Assistance expense also includes spending through the Saskatchewan Housing Corporation and the Saskatchewan Legal Aid Commission.

Social Services and Assistance expense is up $66 million (4.5 per cent) from the 2020-21 Budget. The increase is primarily due to:

• $19 million increase for Child and Family Services utilization pressures to support the program’s core mandate of keeping children safe from abuse and neglect;

• $15 million increase for supports to clients with intellectual disabilities, expanding the existing individualized funding for Autism Spectrum Disorder Program to include children under 12 and improving services for deaf and hard of hearing persons;

• $13 million increase for the national housing strategy and increased housing operations costs;

• $9 million net increase for Income Assistance utilization; and,

• $7 million increase to community-based organizations.

Protection of Persons and Property is budgeted at $845 million, or 4.9 per cent of total expense.

The most significant components of this theme are the Ministries of Corrections, Policing and Public Safety, Labour Relations and Workplace Safety, the Integrated Justice Services vote, as well as portions of the Ministries of Government Relations and Justice and Attorney General. The Saskatchewan Public Safety Agency, Victim’s Fund, the Sask911 Account and the Financial Consumer Affairs Authority of Saskatchewan are also included.

50  Budget 2021-22

Protection of Persons and Property is up $39 million (4.8 per cent), primarily reflecting increases across the justice system, including COVID-19 response measures in the court services, policing programs, salary increases and custody services.

Agriculture is budgeted at $879 million, or 5.1 per cent of total expense.

The most significant components of this theme are the Ministry of Agriculture, Saskatchewan Crop Insurance Corporation, Saskatchewan Agricultural Stabilization Fund and Prairie Agricultural Machinery Institute.

Agriculture is up $81 million (10.1 per cent), primarily due to $73 million in higher crop insurance expense resulting from a higher insured liability and increased AgriStability payments, as well as increases for AgriInvest and Agricultural Water Development projects.

Financing Charges are budgeted at $755 million, or 4.4 per cent of total expense. This is an increase of $37 million (5.1 per cent) from last year’s budget, largely reflecting an increase in debt-servicing costs as a result of growth in Saskatchewan Capital Plan and operating debt.

Community Development is budgeted at $690 million, or 4.0 per cent of total expense.

The most significant components of Community Development are portions of the Ministries of Government Relations, Education and Parks, Culture and Sport, as well as the Northern Municipal Trust Account and the Saskatchewan Lotteries Trust Fund for Sport, Culture and Recreation.

Community Development is down $72 million (9.5 per cent) from last year’s budget, primarily due to a $150 million decrease for the Municipal

Economic Enhancement Program, partially offset by increases of $68 million for the Investing in Canada Infrastructure Program, $7 million for the Gas Tax Program and $5 million for the New Building Canada Fund, as well as a $4 million increase for the Active Families Benefit.

Transportation is budgeted at $608 million, or 3.6 per cent of total expense.

The most significant components of this theme are the Ministry of Highways and a portion of the Ministry of Government Relations, as well as the Transportation Partnerships Fund.

Transportation is up $22 million (3.7 per cent) from last year’s budget, largely due to a $15 million increase in amortization expense for completed highway projects, as well as increases for the Transportation Partnership Fund and the Strategic Partnership Program for road improvement, air services, and other projects.

Economic Development is budgeted at $527 million, or 3.1 per cent of total expense.

The most significant components of Economic Development are the Ministries of Energy and Resources and Trade and Export Development, as well as portions of the Ministries of Environment, Immigration and Career Training, Finance and Parks, Culture and Sport. The theme also includes Innovation Saskatchewan, Saskatchewan Opportunities Corporation, a portion of the Saskatchewan Research Council, Tourism Saskatchewan and SaskBuilds Corporation.

Economic Development is up $137 million (35.2 per cent), largely reflecting:

• $175 million for the Saskatchewan Economic Recovery Rebate provided to SaskPower customers;

Budget 2021-22   51

• $64 million increase provided to SaskPower (offset by higher GBE net income) to invest in multiple projects, including infrastructure in rural communities, a battery energy storage system and distributed energy resource enablement;

• $15 million increase for VIDO to construct a Centre for Pandemic Research; and,

• $5 million increase for the Saskatchewan Tourism Sector Support Program;

partially offset by,

• $121 million decrease due to the fall-off of the one-time emergency COVID-19 support programs in the 2020-21 Budget.

Environment and Natural Resources is budgeted at $415 million, or 2.4 per cent of total expense.

This theme is comprised of portions of the Ministries of Environment and Parks, Culture and Sport. As well, the theme includes the Commercial Revolving Fund, the Water Security Agency and a portion of the Saskatchewan Research Council.

Environment and Natural Resources expense is up $53 million (14.5 per cent), primarily reflecting a $50 million increase in federal flow-through funding for the Accelerated Site Closure Program for the reclamation of inactive oil and gas wells and facilities.

General Government (formerly Other) expense is budgeted at $525 million, or 3.1 per cent of total expense. This is an increase of $103 million (24.3 per cent) from the 2020-21 Budget, primarily reflecting a $112 million increase in pension expense, as previously noted, partially offset by a $20 million reduction for the Chief Electoral Officer due to the fall-off of funding related to the 2020 provincial election.

Finally, this year’s budget does not include a Health and Public Safety Contingency, resulting in a $200 million decrease in expense when compared to last year’s budget.

MEDIUM-TERM OUTLOOK

The impact to the Saskatchewan economy in 2020 from COVID-19 appears to have been less than initially forecast. However, several sectors of the economy and the labour market experienced an unprecedented shock last year. Significant economic challenges remain as public health measures remain in place and COVID-19 variants spread.

While the approval of vaccines in recent months and the beginning of mass vaccination efforts offer hope that the virus will soon be contained, it is clear that full recovery will take longer than originally assumed. Economic growth is forecast for 2021 and beyond, but the ongoing pandemic has altered the previous path for a return to fiscal balance.

In the near term, the 2021-22 Budget faces a revenue shortfall compared to the previous outlook, largely as a result of a delayed economic recovery. In addition, another year of COVID-related spending will be required to support the provincial economy and health care system, and to set the stage for economic recovery.

Beyond 2021-22, deficits are now forecast across the planning horizon, including a deficit of $770 million in 2024-25. While this is a deterioration in the fiscal outlook since the 2020-21 First Quarter Report, Saskatchewan is well positioned to withstand a longer return to balance due to its low debt burden.

The medium-term fiscal outlook is consistent with the provincial economic forecast and its underlying assumptions. In particular, the outlook assumes that public health measures and vaccination efforts are successful in ending the pandemic this year and that there are no negative structural changes to the economy that further delay recovery.

52  Budget 2021-22

KEY MEDIUM-TERM NON-RENEWABLE RESOURCE FORECAST ASSUMPTIONS

	2019-20		2020-21		2021-22		2022-23		2023-24		2024-25
	Actual		Forecast		Budget		Outlook		Outlook		Outlook
WTI Oil Price (US$/barrel)		54.80		42.27		54.33		55.25		56.38		57.88
Light-Heavy Differential (% of WTI)		20.9		18.1		19.7		19.4		19.0		19.0
Well-head Oil Price (C$/barrel)1		52.54		39.05		49.31		49.41		49.73		50.69
Oil Production (million barrels)		178.9		154.0		160.0		162.1		163.5		166.7
Potash Price (mine netback, US$/KCl tonne)2		223		180		191		194		199		204
Potash Price (mine netback, C$/K O tonne)2		490		390		396		397		400		406
Potash Sales (million K2 O tonnes)2		12.7		14.0		14.3		14.9		15.2		15.2
Canadian Dollar (US cents)		75.19		75.70		79.12		80.30		81.48		82.13

  ¹ The average price per barrel of Saskatchewan light, medium and heavy oil.

  ² Ministry of Finance calculations derived from calendar-year forecasts.

After growth of 2.7 per cent in 2021-22, total revenue is forecast to grow by 4.2 per cent per year, on average, over the medium term. This is higher than average nominal GDP growth of 3.6 per cent over the same time frame and results in own-source revenue returning to its pre-crisis share of GDP (14.9 per cent) in 2024-25.

Total revenue is not forecast to return to pre-crisis levels until 2022-23. In the 2019-20 Budget, revenue was forecast to reach $16.0 billion in 2022-23. In the current outlook, revenue does not surpass $16.0 billion until 2024-25, two years later than anticipated prior to the onset of the COVID-19 pandemic.

Tax revenue is forecast to grow by 4.9 per cent per year, on average, over the forecast period. Revenue growth is supported by continued recovery in the Saskatchewan economy over the medium term. In addition, the wind-down of the Home Renovation Tax Credit and the small business income tax rate reduction by the end of the forecast period contributes to the robust growth outlook over the period.

Non-renewable revenue growth is forecast to increase 7.5 per cent per year, on average, between 2021-22 and 2024-25. Despite this relatively high rate of growth, revenue does not return to its 2019-20 level over the forecast horizon.

WTI oil prices are forecast to gradually increase over the forecast period and average nearly US$58 in 2024-25. A decrease in the light-heavy oil price differential over the same time period provides another boost to well-head oil prices in Saskatchewan. However, a strengthening Canadian dollar outlook over the next four years offsets these price gains. As a result, well-head prices, in Canadian dollars, are not expected to surpass 2019-20 prices by 2024-25. Finally, oil production in 2024-25 is forecast at 166.7 million barrels, nearly 7 per cent lower than 2019-20 levels.

Potash prices, in U.S. dollars, are forecast to modestly increase over the forecast horizon, as are sales. Similar to oil, a stronger Canadian dollar over the forecast horizon offsets US-dollar price improvements and mutes the overall price increase in Canadian dollars.

In total, non-renewable resource revenue is projected to account for 10 per cent of total revenue by 2024-25. This is an increase from a forecasted 8 per cent share in 2020-21, but lower than its 12 per cent share of revenue over the 2018-19 and 2019-20 period.

Budget 2021-22   53

NON-RENEWABLE RESOURCE REVENUE – 1990-91 TO 2024-25

GBE net income and other own-source revenue are projected to increase at a combined annual average rate of 4.5 per cent. In the fiscal plan, GBE net income is assumed to not return to pre-crisis levels until 2024-25. Other own-source revenue is forecast to surpass its pre-crisis level in 2022-23 and then grow at a more normal rate of 3.4 per cent per year, on average, in the subsequent two years.

Finally, federal transfers are projected to remain flat over the four-year horizon. The 2021-22 Budget includes $200M of federal funding for the Accelerated Site Closure Program that will wind down by 2023-24. This decline is offset by increases in the Canada Health Transfer and the Canada Social Transfer in the outlook, while all other federal cost-sharing programs are projected to remain relatively flat.

COMPOSITION OF REVENUE – 1990-91 TO 2024-25

54  Budget 2021-22

MEDIUM-TERM FINANCIAL OUTLOOK

	2021-22			2022-23			2023-24			2024-25
(millions of dollars)	Budget			Outlook			Outlook			Outlook
Revenue		14,478			15,107			15,729			16,367
Expense		17,089			16,792			16,889			17,137
Deficit		(2,611	)		(1,685	)		(1,160	)		(770	)

Growth in base, or ongoing, expense over the medium term is targeted at 1.5 per cent per year. This growth will be offset by the fall-off of COVID-related and stimulus spending over the next two years. As a result, total expense is expected to fall by 1.7 per cent in 2022-23, followed by growth of 0.6 per cent in 2023-24 and 1.5 per cent in 2024-25.

As a result, the annual budget balance is projected to improve over the next three years, from a $2.6 billion deficit in 2021-22 to a $770 million deficit in 2024-25. A return to balance is now targeted for the 2026-27 fiscal year.

While a return to balance is not forecast over the four-year forecast horizon, Saskatchewan is well positioned to withstand this development given its low debt burden. Saskatchewan’s net-debt-to-GDP ratio, a key measure of financial sustainability, is forecast at 19.0 per cent on March 31, 2021, the lowest among Canadian provinces.

Under the current set of planning assumptions and a delayed return to balance timeline, Saskatchewan’s net-debt-to-GDP ratio is forecast to increase to 21.7 per cent in 2021-22 and peak at 26.3 per cent in 2024-25, before levelling off and declining as annual deficits are reduced and the economy continues to grow.

Despite the increase in the net debt over the medium term, Saskatchewan’s net-debt-to-GDP ratio is expected to remain one of the lowest in Canada and well below the levels the Province experienced in the 1990s.

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2021-22 BORROWING AND DEBT

The Province’s debt consists of:

• General Debt – all debt of government entities other than Government Business Enterprise (GBE) Specific Debt; and,

• Government Business Enterprise Specific Debt – amounts borrowed by, or specifically on behalf of self-sufficient government organizations.

Government business enterprises have the financial and operating authority to sell goods and services to individuals and organizations outside government as their principal activity. Amounts borrowed by, or specifically for these entities are classified separately because they are expected to be repaid from cash flows generated by these business enterprises. In other words, this debt has been incurred to finance the business activities of Crown corporations, and it is supported by revenue from those Crown business activities.

PUBLIC DEBT

As at March 31

    

Public debt as reported in this budget paper is comprised of:

• Gross Debt – the amount of money owed to lenders; less

• Sinking Funds – the amount of money that has been set aside for the repayment of debt.

Public debt at March 31, 2021 is forecast to be $0.8 billion lower than estimated, due to decreased GBE debt.

For 2021-22, public debt is expected to increase by $4.2 billion from the March 31, 2021 forecast. This is due to a $2.2 billion increase in operating debt to cover revenue shortfalls and incremental expenses, a $1.5 billion increase in debt for infrastructure assets under the Saskatchewan Capital Plan, and $0.5 billion of increased debt for the utility Crown corporations.

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DEBT

As at March 31

			GBE
	General		Specific
	Debt		Debt		Budget		Forecast		Budget
(Millions of Dollars)	2022		2022		2022		2021		2021
Government Service Organizations
Gross Debt		19,230.2		–		19,230.2		15,404.7		15,497.2
Sinking Funds		1,374.8		–		1,374.8		1,165.4		1,160.6
Government Service Organization Debt		17,855.4		–		17,855.4		14,239.3		14,336.6
Government Business Enterprises
Gross Debt		275.0		10,708.2		10,983.2		10,476.2		11,150.8
Sinking Funds		37.8		1,034.5		1,072.3		1,118.7		1,118.2
Government Business Enterprise Debt		237.2		9,673.7		9,910.9		9,357.5		10,032.6
Public Debt		18,092.6		9,673.7		27,766.3		23,596.8		24,369.2
Guaranteed Debt		0.1		–		0.1		0.2		0.8

BORROWING

Virtually all borrowing is done by the General Revenue Fund (GRF). Where the GRF borrows on behalf of a government entity, the entity is responsible for the principal and interest payments on this debt.

The GRF’s 2021-22 borrowing requirements are estimated to be $4,657.0 million. Of this amount, $284.2 million is for the purpose of refinancing maturing debt and the remaining amount is to assist with financing infrastructure assets and the deficit.

BORROWING REQUIREMENTS

	Budget		Forecast
(Millions of Dollars)	2021-22		2020-21
General Revenue Fund – Operating		2,300.0		2,120.0
Saskatchewan Capital Plan and     Other Government Service Organizations		1,600.0		1,400.0
Government Service Organizations		3,900.0		3,520.0
Government Business Enterprises		757.0		1,026.1
Borrowing Requirements		4,657.0		4,546.1

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SINKING FUNDS

	Forecast		Contributions		Earnings		Redemptions			Budget
(Millions of Dollars)	2021		2022		2022		2022			2022
Government Service Organizations		1,165.4		194.0		27.0		(11.6	)		1,374.8
Government Business Enterprises		1,118.7		95.4		24.5		(166.3	)		1,072.3
Total Sinking Funds		2,284.1		289.4		51.5		(177.9	)		2,447.1

SINKING FUNDS

Sinking funds are monies set aside for the orderly retirement of a portion of the government’s debt. Sinking funds at March 31, 2021 are forecasted to be $2,284.1 million, which is $5.3 million higher than estimated. The variance is primarily due to higher-than-expected earnings during 2020-21.

For 2021-22, sinking funds are expected to increase by $163.0 million to $2,447.1 million.

DEBT CHARGES

In addition to interest payments, debt charges include other costs related to general gross debt, such as the amortization of premiums, discounts, and commissions. Debt charges also include interest that is accrued on pension liabilities.

The 2021-22 debt charges assume interest rates of 0.5 per cent for short-term borrowing transactions and 2.0 per cent for long-term borrowings. An interest rate of 3.0 per cent is assumed for pension liabilities. A one percentage point increase in interest rates from levels assumed in the Budget would increase debt charges in 2021-22 by approximately $69.4 million.

DEBT CHARGES – GENERAL DEBT

	Budget			Forecast
(Millions of Dollars)	2021-22			2020-21
General Revenue Fund		558.0			509.4
Less: GRF Interest Paid to Other Government Entities		(20.5	)		(12.2	)
		537.5			497.2
Pension Liabilities		181.0			190.5
Other General Debt		36.5			25.8
Debt Charges – General Debt1		755.0			713.5

¹ Debt charges do not include amounts pertaining to Government Business Enterprise Specific Debt. These amounts are reflected in Net Income from Government Business Enterprises.

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CREDIT RATINGS

Saskatchewan receives credit ratings from three major credit rating agencies: Moody’s Investors Service (Moody’s), Standard & Poor’s (S&P) and DBRS Morningstar (DBRS).

CREDIT RATINGS OF CANADIAN PROVINCES

As at March 19, 2021

Jurisdiction	Moody’s	S&P	DBRS
BC	Aaa	AAA**	AA(high)
SK	Aaa**	AA	AA(low)
QC	Aa2	AA-	AA(low)
NS	Aa2	AA-	A(high)
MB	Aa2	A+	A(high)
NB	Aa2	A+	A(high)
ON	Aa3	A+	AA(low)
AB	Aa3	A+**	AA(low)**
PE	Aa2	A	A
NL	A1**	A**	A(low)**

* Positive outlook

** Negative outlook

A credit rating is an important indication of a government’s fiscal health as it represents an assessment of a province’s ability to repay its debt. Overall, Saskatchewan’s credit rating ranks second best among Canadian provinces.

NET DEBT

Another measure of a province’s financial position is “net debt.” Net debt aggregates all of a province’s liabilities, and subtracts the financial assets that it has at its disposal to repay these obligations.

The chart below shows that the Province of Saskatchewan’s net debt as a percentage of GDP is forecasted to be 19.0 per cent, which is best among provinces.

The chart on the following page illustrates the trend and forecast for net debt as a percentage of GDP.

PROJECTED NET DEBT AS A % OF GDP

As at March 31, 2021

    

Sources: Net Debt: Jurisdictions’ most recent data (as of March 16, 2021)

                      GDP, SK: Saskatchewan Ministry of Finance

                      All others: Statistics Canada, IHS Markit

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NET DEBT AS A % OF GDP

As at March 31

    

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2021-22 REVENUE INITIATIVES

In response to the challenges posed by the pandemic, the Government introduced initiatives in the fall of 2020 to support Saskatchewan’s economic recovery. This included helping with the cost of home renovations and reducing taxes on small businesses.

The 2021-22 Budget introduces further revenue initiatives to improve affordability, drive sustained growth and ensure the consistent and fair application of taxes in Saskatchewan.

This paper describes in more detail the tax measures announced in the Budget. However, it is only a summary and the reader is advised to contact the responsible ministry or authority and consult the enacting legislation or regulation for specific details.

MAKING LIFE MORE AFFORDABLE

Saskatchewan Home Renovation Tax Credit

Last fall, the Government introduced a new Saskatchewan Home Renovation Tax Credit to help stimulate residential construction activity and improve housing affordability. Saskatchewan homeowners may save up to $1,155 in provincial income tax in 2021 by claiming a tax credit on eligible home renovation expenses incurred between October 1, 2020 and December 31, 2021. A further $945 in savings may be claimed in 2022 in respect of eligible expenses incurred between January 1, 2022 and December 31, 2022.

Further information on this initiative can be found at www.saskatchewan.ca/residents/taxes-and-investments/tax-credits.

Active Families Benefit

Making children’s activities more affordable for low and moderate income families is a key priority for the Government. As a result, the Active Families Benefit (AFB) is being reinstated to provide a refundable income tax credit to assist families with the cost of registering children in cultural, recreational and sports activities.

Eligible programs are those that are suitable for children and require children to actively participate; are offered by a service provider located in Saskatchewan; involve instruction and supervision; and require registration and payment of a fee.

• The benefit will provide a refundable tax credit of up to $150 per year per child to eligible families.

• Families of children with a disability can claim an additional $50, for a total tax credit of up to $200 per year per child.

• The AFB will be an income-tested tax credit. In order to be eligible, families must have a combined net income of $60,000 or less.

As the AFB will be retroactive to January 1, 2021, eligible families who enroll their children in qualifying sports, arts and cultural activities in 2021 are reminded to keep their receipts so they may claim the benefit with their 2021 income tax filings.

For further information on this initiative, please contact the Ministry of Parks, Culture and Sport at 306-787-3828.

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GROWING THE ECONOMY

The purpose of economic growth is to improve the quality of life for the people of Saskatchewan. Growth is a shared mission that engages all Saskatchewan residents – it creates new jobs and opportunities for people to realize their future in the province, and correspondingly lowers unemployment; it allows for increased investment in and improvements to public services; and growth provides for a resilient economy that results in a stronger Saskatchewan now and for years to come. A competitive tax environment is one of the ways to drive and sustain economic growth.

Saskatchewan’s tax system includes several incentives that cover a broad range of economic sectors, including manufacturing, agriculture, non-renewable resources, and innovation and technology. These initiatives support competitiveness and encourage new investment in the provincial economy. As part of the commitment to a strong economic recovery and a strong Saskatchewan, existing incentives will remain in place and the 2021-22 Budget announces additional incentives that will drive growth for the benefit of all residents.

For further information on initiatives that improve Saskatchewan’s competitive business environment and encourage investment in the province, please visit www.saskatchewan.ca/business/investment-and-

economic-development/business-incentives-and-tax-credits.

Reduction to the Small Business Tax Rate

Last fall, to support Saskatchewan small businesses through the pandemic and to help them recover, the Government temporarily eliminated its small business corporate income tax rate, effective October 1, 2020. The tax rate will return to 1 per cent on July 1, 2022 and to 2 per cent on July 1, 2023. The amount which small businesses can earn at the small business tax rate will remain at $600,000 – the highest threshold

in Canada. Lowering taxes for Saskatchewan small businesses over the next three years will help them to bolster employment and keep Saskatchewan on the path to economic recovery.

Saskatchewan Technology Start-up Incentive

With the goal of growing Saskatchewan’s technology sector, the Saskatchewan Technology Start-up Incentive (STSI) program is being extended for an additional five years, through to 2025-26.

The 2018-19 Budget originally announced the introduction of the STSI as a pilot program, ending in 2020-21, to encourage business investment in early stage technology start-ups.

The program provides for a non-refundable 45 per cent income tax credit for individual, corporate or venture capital corporation investments in Eligible Start-up Businesses (ESBs) that are developing new technologies, or applying existing technologies in a new way, to create new proprietary products, services or processes that are repeatable and scalable.

In addition to extending the program for five years, and in response to feedback received from the sector and with the intent of making the program more effective, the following changes will be made:

• the amount that an ESB can raise under the program will double, from $1 million to $2 million;

• the carry-forward period to claim unused tax credits increases from four years to seven years; and,

• an annual cap of $2.5 million per year is established on the maximum value of tax credits that can be issued.

For further information on the STSI program, contact Innovation Saskatchewan at 306-933-7222.

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Associated Natural Gas

Royalty Moratorium

The Saskatchewan Growth Plan committed to introducing a moratorium on associated natural gas royalties. With the 2021-22 Budget, the Province is meeting this commitment by implementing a royalty rate of 0 per cent for a period of five years on all natural gas produced in association with oil. This will provide oil producers with approximately $3.8 million in annual royalty relief.

This initiative is part of Saskatchewan’s Methane Action Plan, which in turn is part of the Province’s overall climate change strategy. It is designed to encourage oil producers to invest in new methane emission reduction projects and further reduce venting and flaring of natural gas.

The royalty moratorium begins April 1, 2021 and will remain in place for five years, with a sunset date of March 31, 2026.

For further information on this initiative, please contact the Ministry of Energy and Resources at 306-787-4765.

High Water-Cut Oil Royalty Incentive

The 2021-22 Budget introduces a modernized and expanded High Water-Cut Program (HWCP), to encourage capital investment and increase oil production rates from wells that produce high volumes of water.

The modernized program provides a new royalty benefit where substantial investments in water handling capacity are made.

• Eligible active oil wells must have produced at least 90 per cent water-cut for the previous three consecutive calendar months.

• Eligible shut-in/suspended wells must have been shut-in/suspended for the previous six consecutive calendar months, with the previous three producing months having a minimum 90 per cent water-cut.

• An average minimum capital investment of $20,000 per well must be incurred to directly improve water handling capabilities and extend the producing life of the well, excluding standard repair and maintenance activities.

Eligible Old, New, and 3rd Tier HWCP oil wells will be assigned 4th Tier royalty status only on their incremental oil production. Eligible 4th Tier HWCP oil wells will receive a two percentage point royalty rate reduction on all their production.

This update to the existing HWCP is designed to increase program participation and encourage new capital investments and increased oil production that would otherwise not occur.

The new HWCP begins April 1, 2021 and will remain in place for five years, with a sunset date of March 31, 2026.

For further information on this initiative, please contact the Ministry of Energy and Resources at 306-787-4765.

Sodium Sulphate Royalty Incentive

The 2021-22 Budget introduces a new sodium sulphate royalty system which simplifies the existing royalty calculation and provides a modernized investment incentive.

Budget 2021-22   63

Retroactive to April 6, 2020, the sodium sulphate royalty changes will have two components.

• Replacement of the scaled production-based royalty with a flat royalty rate of 3 per cent on all sodium sulphate production.

• A credit of 10 per cent of qualifying capital expenditures that will be eligible for use against current year royalties otherwise payable. This capital investment credit will be for approved capital projects that diversify products or improve operating efficiency.

These sodium sulphate royalty changes are designed to help the industry through its current market challenges and create new diversification investment opportunities.

For further information on this initiative, please contact the Ministry of Energy and Resources at 306-787-4765.

IMPROVING TAX FAIRNESS

The 2021-22 Budget also introduces several measures to improve the fair application of Saskatchewan’s taxes, including the taxation of vapour products, heat-not-burn tobacco products and electric vehicles; as well as the application of Education Property Tax.

Taxation of Vapour Products

The Government has made a number of changes in recent years to bring the marketing of vapour products in line with existing tobacco legislation. To help prevent vapour products from being attractive to youth and non-smokers, the 2021-22 Budget introduces a new Vapour Products Tax (VPT) with a rate of 20 per cent on the retail price of all vapour liquids, products and devices, effective September 1, 2021.

Retailers selling vapour products will be required to obtain a VPT license and to submit a VPT return.

For further information on the VPT, please refer to the Ministry of Finance website at www.sets.saskatchewan.ca/taxinfo or contact the Ministry at sasktaxinfo@gov.sk.ca.

Taxation of Heat-Not-Burn

Tobacco Products

To help maintain tax equity between different types of tobacco products and to bring heat-not-burn (HNB) tobacco sticks in line with existing tobacco legislation, the 2021-22 Budget adds HNB tobacco sticks as a separate category under The Tobacco Tax Act at a rate of approximately 75 per cent of the tax rate on tobacco cigarettes, effective June 1, 2021. The current tax rate on cigarettes is 27.0¢ per stick, resulting in a HNB tax rate of 20.5¢ per stick.

For further information on the taxation of HNB tobacco sticks, please refer to the Ministry of Finance website at www.sets.saskatchewan.ca/taxinfo or contact the Ministry at sasktaxinfo@gov.sk.ca.

Taxation of Electric Vehicles

The Fuel Tax Accountability Act ensures that the Fuel Tax applicable to on-road travel in Saskatchewan is directed at preserving and improving the provincial highway system. For the Government’s 2019-20 fiscal year, road-use Fuel Tax revenues totaled almost $454 million, while road maintenance expenditures totaled almost $616 million.

64  Budget 2021-22

Electric vehicles (EVs) are being purchased in ever increasing numbers across Canada and around the world. While the number of these vehicles in Saskatchewan is currently relatively low, they are increasing in number every year. These vehicles contribute to wear and tear on provincial roadways, but because they do not consume traditional fuels they are not contributing to highway maintenance through the provincial Fuel Tax.

The 2021-22 Budget therefore introduces a new annual tax of $150 for each passenger EV registered in Saskatchewan, effective October 1, 2021. Revenue from this tax will be included in the calculations under The Fuel Tax Accountability Act, ensuring that this and all other road-use Fuel Tax revenues are dedicated to provincial highway maintenance.

The tax will be collected by Saskatchewan Government Insurance when the EV is registered. While this tax will only apply to passenger vehicles, the Government will continue to examine the future potential for expanding the tax to commercial vehicles and interjurisdictional trucking. The Government will also consider options to apply a tax at charging stations.

For further information regarding the tax on EVs, please refer to the Ministry of Finance website at www.sets.saskatchewan.ca/taxinfo or contact the Ministry at sasktaxinfo@gov.sk.ca.

Education Property Tax Mill Rates

Provincial legislation requires all Saskatchewan properties to be revalued every four years, since their values change over time. The 2021 revaluation follows the recent decision by the Government to reduce the percentage of value taxable assessment rate for commercial/industrial and resource properties from 100 per cent to 85 per cent.

Since the 2017 revaluation, taxable assessments of agricultural properties have increased, while taxable assessments of residential, commercial/industrial and resource properties have declined.

In this context, the 2021-22 Budget is introducing changes to Education Property Tax (EPT) mill rates to slightly increase overall revenues to the Province in line with year-over-year inflation. The 2021 EPT mill rates for the various property classes will be: agricultural 1.36; residential 4.46; commercial/industrial 6.75; and resource 9.79.

For further information on Saskatchewan’s EPT mill rates, please visit www.saskatchewan.ca/residents/taxes-and-

investments/property-taxes/education-property-tax-system.

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SASKATCHEWAN’S TAX EXPENDITURES

INTRODUCTION

Although the primary purpose of taxation is to raise revenue, governments also attain some of their social and economic goals by reducing the taxes paid by certain taxpayers. These reductions are commonly called “tax expenditures” and may include exemptions, deductions, credits, preferential rates or deferrals. Taken together, they provide assistance to a variety of individuals and businesses, including families, farmers, senior citizens and small businesses.

While tax expenditures are usually absorbed in the overall revenue estimates and are not presented in the same way as direct spending programs, they reduce the amount of revenue generated by a government and they affect the fiscal position in the same way as direct expenditures. This paper provides estimates of the revenue impacts of several of Saskatchewan’s tax expenditures.

RATIONALE FOR TAX EXPENDITURES

Tax expenditures can achieve a number of objectives, such as enhancing the fairness of the tax system or promoting certain types of economic activity. In pursuing these objectives, some tax expenditures have become fundamental elements of the tax system.

Saskatchewan’s Provincial Sales Tax (PST) does not apply to certain essential items such as basic groceries, residential natural gas and electricity and reading materials, thereby reducing the taxes paid by families consuming these items.

Other exemptions from the PST are intended to support particular key sectors of the provincial economy, including manufacturing and farming.

To provide tax relief to key economic sectors and ensure tax competitiveness with other jurisdictions, Saskatchewan provides reduced Fuel Tax rates to farmers and primary producers. Saskatchewan also exempts heating fuels from the Fuel Tax to ensure consistent tax treatment with the PST exemption for natural gas used for heating.

Saskatchewan’s personal income tax system applies provincial marginal tax rates directly to taxable income as defined for federal income tax purposes. As a result, deductions that contribute to the federal determination of taxable income can be considered fundamental aspects of the provincial income tax system that reduce Saskatchewan income tax revenue.

In addition, Saskatchewan’s personal income tax system has distinct provincial non-refundable tax credits that recognize the personal circumstances of the taxpayer, including family-based credits and disability-related credits.

Saskatchewan’s income tax system also delivers several programs designed to encourage specific taxpayer behaviours, including investment incentives and retention incentives.

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To improve tax competitiveness, Saskatchewan levies a lower income tax rate on small businesses and a special income tax rate on manufacturing and processing (M&P) profits. In addition, Saskatchewan provides a refundable Investment Tax Credit to assist M&P companies that invest in qualifying new or used M&P assets for use in the province. Saskatchewan also provides a Research and Development (R&D) Tax Credit in support of qualifying R&D activities.

The rationale for each tax expenditure is provided in the notes that follow the tables.

ASSOCIATED COSTS

While tax expenditures serve important social and economic objectives, the introduction of any tax expenditure results in associated costs. These costs take several forms.

• First, there is the cost of forgone revenue. Tax expenditures result in the reduction of revenue collected and have a significant impact on a government’s financial position.

• Second, tax expenditures may add to the complexity of the tax system, leading to increased administrative effort and compliance costs for businesses, consumers and governments.

• Third, tax expenditures may create distortions in consumer and other economic behaviour by providing preferential treatment for certain categories of consumer expenditure.

GOVERNMENT OF CANADA

TAX EXPENDITURES

The federal government produces a detailed presentation on tax expenditures that are part of the federal tax system. Since Saskatchewan’s personal and corporate income taxes are based upon the federal definition of taxable income, many of the federal tax

expenditures have an impact on Saskatchewan’s revenue. Readers interested in examining the federal government’s presentation of tax expenditures are invited to visit the Finance Canada website at www.canada.ca/en/department-finance and go to “Publications.”

2021 SASKATCHEWAN TAX

EXPENDITURE ACCOUNTS

The following tables provide estimates of the major tax expenditures of the Government of Saskatchewan. This year’s tables also provide updates to the 2018, 2019 and 2020 tax expenditure estimates that were reported last year.

Tax expenditure estimates for PST and Fuel Tax are derived from historical tax collection data and Statistics Canada data on personal and business consumption patterns, along with assumptions regarding expected changes in population, retail sales and investment intentions.

Tax expenditure estimates for personal and corporate income taxes are derived from the Government’s internal tax simulation model, which uses actual income tax assessment data for the 2018 taxation year, along with assumptions regarding expected changes in population, employment, income and investment intentions for subsequent taxation years.

The 2021-22 Saskatchewan Tax Expenditure Accounts incorporate the re-indexation of the personal income tax system effective for the 2021 taxation year and the temporary elimination of the small business corporate income tax rate.

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2021 Government of Saskatchewan

Tax Expenditure Accounts

(Value of Tax Expenditures in Millions of Dollars)

Provincial Sales Tax		2018 Revised		2019 Revised		2020 Revised		2021 Estimate		Notes
Exemptions
1.	Basic groceries		170.6		179.0		184.1		189.2	1
2.	Prescription drugs		46.7		49.3		50.1		51.7	1
3.	Reading materials		12.3		11.1		11.9		12.6	1
4.	Personal services		45.9		46.7		47.6		48.0	1
5.	Feminine hygiene products		2.1		2.2		2.3		2.3	1
6.	Used goods and vehicles – exempt amounts		37.6		11.3		13.9		14.1	1
7.	Electricity		66.5		72.6		67.4		68.2	1
8.	Natural gas		35.4		36.5		36.2		35.5	1
9.	Farm machinery and repair parts		105.6		102.6		105.7		109.6	2
10.	Fertilizer, pesticide and seed		224.2		236.3		226.3		230.0	2
11.	Direct agents		28.1		28.2		28.3		28.5	2
12.	Agriculture, life and health insurance		136.9		145.4		147.6		151.5	1
Other
1.	Saskatchewan Low-Income Tax Credit		133.3		135.5		137.1		140.0	3
2.	Rebate for New Residential Construction		–		–		2.8		2.9	1,2
Fuel Tax		2018 Actual		2019 Revised		2020 Revised		2021 Estimate		Notes
1.	Exemption for farm activity		79.7		83.7		93.7		104.9	2
2.	Exemption for heating fuels		35.8		37.9		31.3		25.8	1
3.	Exemption for primary producers		1.2		1.3		1.4		1.6	2

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Personal Income Tax		2018 Actual		2019 Revised		2020 Revised		2021 Estimate		Notes
Deductions from Income
1.	Registered Pension Plan contributions		103.2		103.8		103.1		105.9	4
2.	Registered Retirement Savings Plan contributions		148.4		149.7		148.7		148.7	4
3.	Annual union, professional or like dues		16.8		17.0		16.8		17.7	4
4.	Child care expenses		14.4		14.5		11.5		14.6	4
5.	Moving expenses		1.5		1.5		1.5		1.5	4
6.	Carrying charges		22.6		22.8		22.6		23.1	4
7.	Allowable employment expenses		13.4		13.5		16.0		13.6	4
8.	Capital gains deduction		97.0		89.2		88.6		89.7	4
Saskatchewan Non-Refundable Tax Credits
1.	Basic personal tax credit		1,041.6		1,049.9		1,042.6		1,054.8	4
2.	Spousal tax credit		53.2		53.6		53.3		54.3	4
3.	Equivalent-to-spouse tax credit		23.2		23.4		23.2		23.7	4
4.	Age tax credit		34.0		34.3		34.0		35.2	4
5.	Supplement to the age tax credit		14.5		14.6		14.5		14.8	5
6.	Dependent child tax credit		106.1		106.9		106.2		107.6	5
7.	Canada Pension Plan contributions tax credit		95.5		96.3		95.6		98.3	4
8.	Employment Insurance premiums tax credit		27.4		27.6		27.4		28.1	4
9.	Pension income tax credit		13.0		13.1		13.0		13.2	4
10.	Student loan interest tax credit		1.1		1.1		1.1		1.1	4
11.	Disability tax credit		23.3		23.5		23.3		24.0	4
12.	Caregiver tax credit		3.2		3.2		3.2		3.3	4
13.	Medical expenses tax credit		29.8		30.0		29.8		31.1	4
14.	Charitable contributions tax credit		50.4		50.8		50.4		52.0	4
15.	First-time homebuyers tax credit		4.5		4.5		4.5		4.5	4
16.	Volunteer tax credits		–		–		2.5		2.5	4
Other Saskatchewan Tax Measures
1.	Labour-sponsored Venture Capital Tax Credit		10.8		10.5		12.0		12.0	4
2.	Mineral Exploration Tax Credit		0.1		0.1		0.5		0.5	4
3.	Political Contributions Tax Credit		1.3		1.4		2.0		1.2	4
4.	Graduate Retention Program Tax Credit		64.9		64.7		64.6		64.9	6
Corporation Income Tax			2018 Actual		2019 Revised		2020 Revised		2021 Estimate	Notes
1.	Lower tax rate for small business		380.0		339.7		393.2		469.9	2,7
2.	Manufacturing and Processing Profits Tax Reduction		12.7		8.7		15.0		15.0	2,7
3.	Investment Tax Credit for Manufacturing and Processing		38.6		28.2		40.0		40.0	2
4.	Research and Development Tax Credit		7.9		10.4		15.0		15.0	2,4

Budget 2021-22   69

TAX EXPENDITURES – NOTES

1. These measures provide tax relief for individuals and families (and in some cases, businesses) who purchase these particular essential items, thereby reducing the overall cost and contributing to affordability.

2. These measures provide tax relief to key sectors of the provincial economy and help ensure tax competitiveness with similar businesses in other jurisdictions.

3. This measure mitigates the impact of the PST for Saskatchewan residents with low and modest incomes.

4. Most of Saskatchewan’s tax expenditures related to personal and corporate income taxes are provided because they form part of the federal definition of taxable income; others parallel similar federal tax expenditures. Descriptions of these measures and their objectives can be found in the federal government’s report on tax expenditures, as previously noted.

5. Saskatchewan’s dependent child tax credit and supplement to the age tax credit provide tax relief to families with children and to seniors. The dependent child tax credit recognizes the non-discretionary expenses of families with children. The supplement to the age tax credit provides broad tax relief to all seniors, recognizing that the age tax credit is income-tested.

6. The Graduate Retention Program encourages students who have graduated from a post-secondary institution to live and work in Saskatchewan by providing a tax credit of up to $20,000 on their income tax.

7. While there is only one statutory tax rate for corporations, these preferential tax rates for small businesses and M&P businesses create a de facto progressive tax rate structure for some corporations. These measures are designed to encourage or attract investment, support business activity in key economic sectors, and allow these businesses to retain more of their earnings to reinvest and create jobs.

70  Budget 2021-22

2021 INTERCITY COMPARISON

OF TAXES AND UTILITIES

INTRODUCTION

A number of factors contribute to the quality of life enjoyed by individuals and families in Saskatchewan and across Canada. For example, access to excellent health care, education and social services is a key part of overall quality of life.

Other important factors that affect quality of life are the level of taxation and the cost of utilities and auto insurance. Calculating the combined cost of provincial taxes and utilities is a reliable way to compare the attractiveness of living in different parts of Canada.

For the purposes of such a comparison, the total cost of these taxes and utilities for representative families living in Regina has been compared with the costs those families would face in other major cities across the country.

The provincial taxes and utilities costs associated with the following family characteristics and income levels have been calculated to provide a representative comparison:

• a single person, living in rental accommodation, with an annual income of $40,000;

• a family of two adults and two dependent children, owning its own home, with an annual family income of $75,000;

• a family of two adults and two dependent children, owning its own home, with an annual family income of $100,000; and,

• a family of two adults and two dependent children, owning its own home, with an annual family income of $125,000.

SASKATCHEWAN’S RANKING FOR 2021

In 2021, Saskatchewan individuals and families will pay total provincial taxes that are very competitive with those paid in other Canadian cities, with a ranking among the lowest in Canada for all four representative family situations.

• A single person earning $40,000 will pay $3,094 in total provincial taxes.

• A two-income family earning $75,000 will pay $4,552 in total provincial taxes.

• A two-income family earning $100,000 will pay $7,581 in total provincial taxes.

• A two-income family earning $125,000 will pay $10,779 in total provincial taxes.

Regina also ranks favourably with other cities in Canada when comparing provincial taxes and utilities. For the representative family situations, Regina again ranks among the lowest overall for combined taxes and utilities of the 10 cities surveyed.

As described in the Notes section of this paper, the following tables reflect actual utility rates for the 2020 calendar year. They therefore do not incorporate the full impact of the SaskPower and Auto Fund rebates in 2021. If the tables were based on 2021 utility rates and rebates known as of publication for all jurisdictions then Saskatchewan’s bundle of utility costs would be the lowest in the country.

Budget 2021-22   71

2021 Intercity Comparison of Taxes and Utilities

Single Person at $40,000 Total Income

(Values in Dollars)

Vancouver			Calgary		Regina			Winnipeg		Toronto			Montréal			Saint John			Halifax		Charlotte- town			St. John’s
Provincial Taxes
Provincial Income Tax	1,331			1,801		2,221			3,086		1,338			2,737			2,583			3,181		2,955			2,534
Tax Credits and Rebates	(89	)		0		(150	)		0		(329	)		(759	)		(200	)		0		(160	)		(450	)
Health Premiums	0			0		0			0		450			662			0			0		0			0
Sales Tax	746			0		873			893		1,192			1,487			1,490			1,490		1,490			1,490
Gasoline Tax	359			130		150			140		147			222			155			155		145			205
Total Provincial Taxes	2,347			1,931		3,094			4,119		2,798			4,349			4,028			4,826		4,430			3,779
Household Utility Costs
Electricity	502			971		914			505		743			428			678			855		1,039			751
Telephone	362			361		258			394		388			388			391			392		394			389
Auto Insurance	2,850			3,256		1,231			1,355		5,312			1,899			1,621			1,992		1,754			2,991
Total Household Utility Costs	3,714			4,588		2,403			2,254		6,443			2,715			2,690			3,239		3,187			4,131
Total Taxes and Utilities	6,061			6,519		5,497			6,373		9,241			7,064			6,718			8,065		7,617			7,910

2021 Intercity Comparison of Taxes and Utilities

Family at $75,000 Total Income

(Values in Dollars)

Vancouver			Calgary		Regina		Winnipeg		Toronto			Montréal			Saint John			Halifax		Charlotte- town		St. John’s
Provincial Taxes
Provincial Income Tax	2,067			2,837		2,347		4,942		1,505			4,425			4,511			5,357		5,039		4,581
Tax Credits and Rebates	(1,380	)		0		0		0		(1,290	)		(4,324	)		(60	)		0		0		0
Health Premiums	0			0		0		0		750			1,324			0			0		0		0
Sales Tax	1,755			0		1,905		2,003		2,808			3,502			3,511			3,511		3,511		3,511
Gasoline Tax	718			260		300		280		294			444			310			310		302		410
Total Provincial Taxes	3,160			3,097		4,552		7,225		4,067			5,371			8,272			9,178		8,852		8,502
Household Utility Costs
Home Heating	987			851		836		747		933			1,857			2,279			2,119		1,837		1,747
Electricity	830			1,730		1,414		813		1,086			641			1,039			1,410		1,342		1,180
Telephone	362			361		258		394		388			388			391			392		394		389
Auto Insurance	2,850			3,256		1,231		1,355		5,312			1,899			1,621			1,992		1,754		2,991
Total Household Utility Costs	5,029			6,198		3,739		3,309		7,719			4,785			5,330			5,913		5,327		6,307
Total Taxes and Utilities	8,189			9,295		8,291		10,534		11,786			10,156			13,602			15,091		14,179		14,809

72  Budget 2021-22

2021 Intercity Comparison of Taxes and Utilities

Family at $100,000 Total Income

(Values in Dollars)

	Vancouver			Calgary		Regina		Winnipeg		Toronto			Montréal			Saint John		Halifax		Charlotte- town		St. John’s
Provincial Taxes
Provincial Income Tax		3,925			5,167		5,080		7,961		4,076			8,245			7,537		8,800		8,123		7,478
Tax Credits and Rebates		(700	)		0		0		0		(870	)		(3,325	)		0		0		0		0
Health Premiums		0			0		0		0		960			1,324			0		0		0		0
Sales Tax		2,025			0		2,201		2,326		3,274			4,082			4,092		4,092		4,092		4,092
Gasoline Tax		718			260		300		280		294			444			310		310		302		410
Total Provincial Taxes		5,968			5,427		7,581		10,567		7,734			10,770			11,939		13,202		12,517		11,980
Household Utility Costs
Home Heating		987			851		836		747		933			1,857			2,279		2,119		1,837		1,747
Electricity		830			1,730		1,414		813		1,086			641			1,039		1,410		1,342		1,180
Telephone		362			361		258		394		388			388			391		392		394		389
Auto Insurance		2,850			3,256		1,231		1,355		5,312			1,899			1,621		1,992		1,754		2,991
Total Household Utility Costs		5,029			6,198		3,739		3,309		7,719			4,785			5,330		5,913		5,327		6,307
Total Taxes and Utilities		10,997			11,625		11,320		13,876		15,453			15,555			17,269		19,115		17,844		18,287

2021 Intercity Comparison of Taxes and Utilities

Family at $125,000 Total Income

(Values in Dollars)

	Vancouver		Calgary		Regina		Winnipeg		Toronto			Montréal			Saint John		Halifax		Charlotte- town		St. John’s
Provincial Taxes
Provincial Income Tax		5,673		7,588		7,948		11,307		5,990			12,196			10,815		12,726		11,816		10,971
Tax Credits and Rebates		0		0		0		0		(450	)		(2,325	)		0		0		0		0
Health Premiums		0		0		0		0		1,200			1,324			0		0		0		0
Sales Tax		2,329		0		2,531		2,675		3,765			4,694			4,706		4,706		4,706		4,706
Gasoline Tax		718		260		300		280		294			444			310		310		302		410
Total Provincial Taxes		8,720		7,848		10,779		14,262		10,799			16,333			15,831		17,742		16,824		16,087
Household Utility Costs
Home Heating		987		851		836		747		933			1,857			2,279		2,119		1,837		1,747
Electricity		830		1,730		1,414		813		1,086			641			1,039		1,410		1,342		1,180
Telephone		362		361		258		394		388			388			391		392		394		389
Auto Insurance		2,850		3,256		1,231		1,355		5,312			1,899			1,621		1,992		1,754		2,991
Total Household
Utility Costs		5,029		6,198		3,739		3,309		7,719			4,785			5,330		5,913		5,327		6,307
Total Taxes and Utilities		13,749		14,046		14,518		17,571		18,518			21,118			21,161		23,655		22,151		22,394

Budget 2021-22   73

TAXES AND UTILITIES – NOTES

Tax estimates are calculated for the 2021 calendar year using known changes as of March 5, 2021. Household charges for the basic utility services (electricity, home heating, telephone and auto insurance) represent a cost comparison of the actual utility rates for the 2020 calendar year. This methodology has been chosen for the sake of certainty in citing utility costs. The utility figures exclude federal Goods and Services Tax, provincial sales taxes and municipal taxes and surcharges.

Provincial Income Tax is calculated based on the income level for each representative family situation. It is assumed that family income is earned by both spouses at a 60 per cent to 40 per cent ratio and that the families each claim $3,000 in child care expenses for two dependent children (ages 6 and 12). Personal non-refundable credits used include the Canada Pension Plan/Québec Pension Plan and Employment Insurance contribution credits. Gross Québec personal income tax has been reduced by the Québec Child Care Expense Tax Credit and by the 16.5 per cent abatement from federal income tax.

Tax Credits and Rebates refer to refundable provincial income tax credits and rebates designed to reduce the impact of sales taxes.

Health Premiums are annual premiums for hospital insurance and medical services.

Sales Tax is based upon average family expenditure baskets at the total income levels from Statistics Canada’s 2019 Survey of Household Spending. The sales tax base in each province was identified from the enacting legislation, with total expenditures

adjusted to reflect Saskatchewan consumption patterns. The sales tax in each province was then estimated based on taxable expenditures.

Gasoline Tax is based on annual consumption of 1,000 litres by a single person, and 2,000 litres for families. Figures include charges levied by transit commissions as well as provincial carbon taxes applied to the purchase of gasoline.

Home Heating charges are based on an annual consumption level of 2,800 m3 of natural gas. For Charlottetown and St. John’s, the figures represent the BTU equivalent consumption of fuel oil.

Electricity charges are based on an annual consumption level of 4,584 kWh for renters and 8,100 kWh for homeowners.

Telephone charges are the basic service rates for individual residences.

Auto Insurance is based on a composite index developed by SGI modelled after the index developed by the Consumers’ Association of Canada. The index is based on the actual insurance rates quoted for what drivers would pay in each jurisdiction if they had the same car, coverage, claims history and driving record at a consistent point in time. The Consumers’ Association of Canada developed 34 profiles to create this index. The impacts of “Good Driver” discounts/rebates have been factored in for all applicable jurisdictions. Auto insurance rates for Montréal, Saint John, Halifax, Charlottetown and St. John’s are unchanged from last year’s comparison, as SGI no longer has access to rate information in these jurisdictions.

74  Budget 2021-22

2020-21 BUDGET UPDATE

THIRD QUARTER

OVERVIEW

At third quarter, a deficit of $1.9 billion is forecast, a total improvement of $561.2 million from budget, and an improvement of $179.7 million since mid-year.

Revenue is forecast to increase $447.0 million from budget and expense is forecast to decrease $114.2 million from budget.

The $100.0 million revenue risk allowance included at mid-year has been removed in the third quarter forecast update. The budgeted $200.0 million expense contingency has been fully allocated and, therefore, also removed in the forecast update.

2020-21 BUDGET UPDATE – THIRD QUARTER

	Budget			Mid-Year   Projection			Third Quarter Forecast			Third Quarter Change from
(millions of dollars)										Budget			Mid-Year
Revenue
Taxation		7,202.8			7,161.6			6,706.2			(496.6	)		(455.4	)
Non-Renewable Resources		997.4			1,053.8			1,096.2			98.8			42.4
GBE Net Income		728.8			874.4			1,104.9			376.1			230.5
Other Own-Source Revenue		1,933.1			1,933.1			1,969.1			36.0			36.0
Federal Transfers		2,786.6			3,229.3			3,219.3			432.7			(10.0	)
Revenue Risk Allowance		–			(100.0	)		–			–			100.0
Total Revenue		13,648.7			14,152.2			14,095.7			447.0			(56.5	)
Expense
Agriculture		798.8			593.7			561.0			(237.8	)		(32.7	)
Community Development		762.8			834.8			813.0			50.2			(21.8	)
Economic Development		389.8			494.0			503.7			113.9			9.7
Education		3,361.9			3,397.3			3,379.2			17.3			(18.1	)
Environment and Natural Resources		362.4			362.4			302.5			(59.9	)		(59.9	)
Financing Charges		718.2			724.6			713.5			(4.7	)		(11.1	)
General Government		421.9			396.2			395.6			(26.3	)		(0.6	)
Health		6,176.3			6,351.1			6,362.0			185.7			10.9
Protection of Persons and Property		806.5			806.5			842.5			36.0			36.0
Social Services and Assistance		1,490.3			1,490.3			1,464.2			(26.1	)		(26.1	)
Transportation		585.8			585.8			623.3			37.5			37.5
Health and Public Safety Contingency		200.0			160.0			–			(200.0	)		(160.0	)
Total Expense		16,074.7			16,196.7			15,960.5			(114.2	)		(236.2	)
Deficit		(2,426.0	)		(2,044.5	)		(1,864.8	)		561.2			179.7

Budget 2021-22   75

REVENUE UPDATE

Revenue is now forecast to be $14.1 billion in 2020-21, an increase of $447.0 million (3.3 per cent) from budget, and $56.5 million lower than expected at mid-year.

The increase from budget is due to significant increases in federal transfers and net income from Government Business Enterprises, as well as more modest increases in non-renewable resource revenue and other own-source revenue. These gains are partially offset by lower taxation revenue.

Significant changes from budget are described below.

Taxation revenue is forecast to decrease $496.6 million from budget.

Corporate income tax is down $362.4 million from budget. The decrease is primarily due to the cost of accruing a significant liability related to prior-year assessments. In addition, the forecast is down from budget as a result of weaker-than-expected assessments for the 2019 tax year and the impact of the small business income tax rate reduction to 0 per cent, effective October 1, 2020.

Personal income tax is down $140.4 million from budget, primarily due to weaker-than-anticipated 2019 assessments and the October 1, 2020 implementation of the Saskatchewan Home Renovation Tax Credit.

Provincial Sales Tax (PST) is forecast to be down a net $24.9 million from budget. Better-than-expected economic performance this year has resulted in a $35.0 million increase to the PST forecast at third quarter. However, this increase is more than offset by a $59.9 million reduction as a result of a new accounting treatment that eliminates the PST paid on capital purchases by ministries and Government Service Organizations in the summary budget.

Finally, Tobacco Tax and other taxes (primarily Liquor Consumption Tax and Cannabis Excise Tax) are forecast to be up $14.0 million and $11.2 million from budget, respectively, reflecting stronger-than-expected economic activity this year.

Non-renewable resources revenue is forecast to increase $98.8 million from budget.

At third quarter, oil and natural gas revenue is forecast to be $187.2 million higher than budget. The increase is primarily due to an increase in West Texas

2020-21 NON-RENEWABLE RESOURCES FORECAST ASSUMPTIONS

	Budget		Mid-Year   Projection		Third Quarter Forecast		Third Quarter Change from
							Budget			Mid-Year
WTI Oil Price (US$/barrel)		30.00		38.70		42.27		12.27			3.57
Light-Heavy Differential (% of WTI)		40.0		20.5		18.1		(21.9	)		(2.4	)
Well-head Oil Price (C$/barrel)1		21.00		36.00		39.05		18.05			3.05
Oil Production (million barrels)		146.0		156.3		154.0		8.0			(2.3	)
Potash Price (mine netback, US$/KCl tonne)2		188		178		180		(8	)		2
Potash Price (mine netback, C$/K2O tonne)2		434		389		390		(44	)		1
Potash Sales (million K2O tonnes)2		13.9		13.8		14.0		0.1			0.2
Canadian Dollar (US cents)		71.00		74.73		75.70		4.70			0.97

¹  The average price per barrel of Saskatchewan light, medium and heavy oil.

²  Ministry of Finance calculations derived from calendar-year forecasts.

76  Budget 2021-22

Intermediate (WTI) oil prices, a narrower light-heavy oil differential and a forecast increase in production, partially offset by a higher average exchange rate forecast.

WTI oil prices have steadily recovered this fiscal year, increasing from a monthly average of US$16.70 in April to US$59.06 in February. As a result, WTI oil prices are now forecast to average US$42.27 per barrel in 2020-21, compared to the budget assumption of US$30.00 per barrel.

The light-heavy differential (as a per cent of WTI) is expected to average 18.1 per cent in 2020-21, a decrease of 21.9 percentage points from the budget assumption of 40.0 per cent, reflecting Western Canadian heavy crude shut-ins and increased demand from U.S. refineries. A narrower light-heavy oil differential results in higher well-head prices in Saskatchewan and higher oil revenue, all else equal.

The value of the Canadian dollar has also strengthened over the course of the fiscal year, from an average of 71.1 U.S. cents in April to 78.8 U.S. cents in February. The exchange rate is now expected to average 75.7 U.S. cents in 2020-21, up 4.7 U.S. cents from the budget assumption of 71.0 U.S. cents. This increase offsets some of the gains from higher oil prices as a higher Canadian dollar results in lower well-head prices in Canadian dollars and lower oil revenue. Overall, the result of these forecast changes is a well-head price forecast in Canadian dollars of $39.05 per barrel, up $18.05 from the budget forecast of $21.00.

In addition, oil production is forecast to increase from 146.0 million barrels at budget to 154.0 million barrels at third quarter.

Resource Surcharge revenue is forecast to increase $13.4 million from budget, primarily reflecting a higher forecast for oil sales values, partially offset by a lower forecast for potash sales values.

Potash royalties are forecast to decrease $64.9 million from budget, mainly due to lower average realized prices in U.S. dollars and an increase in the average exchange rate forecast. Prices are now forecast to average US$180 per KCl tonne (C$390 per K2O tonne), down from the budget assumption of US$188 (C$434).

Other non-renewable resources revenue, including uranium, coal and other minerals, is forecast to decrease $31.1 million from budget. The decrease is mainly due to a larger-than-budgeted impact of the Cigar Lake mine closures on royalties and a lower uranium price forecast.

Finally, Crown land sales are $5.8 million lower than budgeted, reflecting lower-than-expected actual sales in 2020-21.

Government Business Enterprise (GBE) net income is forecast to increase $376.1 million from budget as net income from all commercial Crowns is forecast to be higher than budget.

This increase in GBE net income reflects the following variances from budget:

• $91.8 million increase in Saskatchewan Auto Fund net income (net of the policy holder rebate and enhanced auto injury benefits announced on February 28, 2021), mostly related to higher investment income; a quicker-than-expected recovery from COVID-19 resulting in higher-than-expected revenue from premiums, registration financing and driver penalties, as well as lower claims expenses;

• $64.1 million increase in SaskPower net income, primarily due to an unbudgeted legal settlement and higher Saskatchewan electricity sales in all customer classes except commercial;

• $63.0 million increase in Saskatchewan Liquor and Gaming Authority net income, primarily due to a better-than-expected recovery from COVID-19 closures;

Budget 2021-22   77

• $54.6 million increase in Saskatchewan Government Insurance net income, mostly related to higher investment income and higher premium revenue as a result of a quicker-than-expected pandemic recovery;

• $44.2 million increase in SaskTel net income, mainly due to strong wireless access growth and device revenue, increased business use of managed video conferencing and teleconferencing services with a resultant increase in network and connectivity usage, and one-time equipment sales driven by the pandemic (work from home and safety protocols);

• $38.9 million increase in SaskEnergy net income, mostly due to higher revenue resulting from colder-than-normal weather and higher natural gas prices, along with lower operating and depreciation expense;

• $15.3 million improvement in Saskatchewan Gaming Corporation results, from a $22.4 million net loss at budget to a $7.1 million net loss at third quarter, primarily due to better-than-anticipated results realized during the period (July 9, 2020 to December 18, 2020) that Casinos Regina and Moose Jaw were open; and,

• $4.2 million net increase across all other entities.

Other own-source revenue is forecast to increase $36.0 million from budget.

Fees revenue is forecast to increase $88.8 million from budget, while miscellaneous revenue is forecast to decrease $78.0 million. A reclassification of certain health-sector revenues from miscellaneous revenue to fees revenue explains the majority of the variances from budget.

Investment income is forecast to increase $14.0 million, mainly due to higher-than-budgeted sinking fund earnings.

Insurance revenue is forecast to increase $6.6 million from budget, mainly due to higher-than-budgeted producer premiums for the Livestock Price Insurance Program, while transfers from other governments are forecast to increase $4.6 million from budget.

Transfers from the federal government are forecast to increase $432.7 million from budget and includes the following increases:

• $338.1 million for Saskatchewan’s share of the federal Safe Restart Agreement;

• $74.9 million for Saskatchewan’s share of the federal Safe Return to Class Fund;

• $20.1 million at the Saskatchewan Crop Insurance Corporation, mainly due to an increase in AgriStability program payments;

• $18.6 million for Saskatchewan’s claim under the federal Fiscal Stabilization Program related to fiscal year 2016-17 (in addition to the initial $20.3 million payment that was received and recorded in 2019-20); and,

• $17.1 million at the Ministry of Immigration and Career Training for one-time Workforce Development Agreement top-up funding.

These increases are partially offset by a $50.0 million decrease in federal funding that will be recognized in the next two fiscal years rather than in 2020-21 for the Accelerated Site Closure Program as fewer projects are expected to be completed this fiscal year. In addition, the Canada Health Transfer and Canada Social Transfer are down $5.4 million and $1.9 million from budget, respectively, due to revised federal population estimates.

Finally, the $100.0 million revenue risk allowance included in the mid-year report to cushion against potential COVID-related revenue deterioration over the second half of the fiscal year has now been removed as the fiscal year comes to a close.

78  Budget 2021-22

EXPENSE UPDATE

At third quarter, expense is forecast to be nearly $16.0 billion in 2020-21, a decrease of $114.2 million (0.7 per cent) from budget and a $236.2 million decrease since mid-year. Major changes in expense themes from budget are described below.

Health is up $185.7 million from budget reflecting additional COVID-related pressures across the health system, including compensation and personal protective equipment, as well as cohorting and other measures at long-term care homes.

Economic Development is up $113.9 million, largely reflecting $85.2 million for the SaskPower customer rebate program. The forecast update also includes a net $28.7 million increase across the rest of the theme, primarily for unbudgeted COVID-19 support programs, including the Saskatchewan Tourism Sector Support Program, the extension of the Small Business Emergency Payment Program and grants to support the Western Hockey League and the Saskatchewan Junior Hockey League.

Community Development is up $50.2 million, reflecting $70.3 million for the municipal portion of the federal-provincial Safe Restart Agreement (which is fully offset by federal transfers), partially offset by lower expense at several entities due to the deferral of projects and COVID-related impacts.

Transportation is up $37.5 million, largely due to higher-than-budgeted winter maintenance costs and additional funding for the Rural Integrated Roads for Growth and the Urban Highway Connector programs.

Protection of Persons and Property is up $36.0 million, mainly due to increased COVID-related expense at the Ministry of Corrections, Policing and Public Safety, the Ministry of Justice and Attorney General and the Saskatchewan Public Safety Agency.

Education is up $17.3 million from budget, reflecting an $84.2 million increase in provincial and federal funding for the safe re-opening of the K-12 school system and $20.7 million of safe restart funding provided to the child-care sector. These increases are partially offset by a $38.3 million decrease in pension expense due to changes in actuarial assumptions, a $37.4 million decrease as school divisions did not utilize the anticipated level of restricted reserves due to the impacts of COVID-19 closures earlier in the year and a $6.5 million decrease in provincial and apprenticeship training allowances.

In addition to the $84.2 million of funding noted above, another $20.7 million of provincial funding has been provided to school divisions to be used next year to continue responding to COVID-19. When combined with $40.0 million of school division spending on COVID-related costs funded from prior-year savings and $10.0 million of COVID-related capital asset purchases, a total of $154.9 million has been invested in the Saskatchewan Safe Schools Plan.

Agriculture is down $237.8 million, primarily due to lower crop insurance indemnities as a result of favourable crop conditions.

Environment and Natural Resources is down $59.9 million, mainly due to lower activity in the Accelerated Site Closure Program in 2020-21 and a shift of projects into the next two fiscal years.

Social Services and Assistance is down $26.1 million due to lower-than-budgeted income assistance expense and reduced spending under the national housing strategy, partially offset by unbudgeted COVID-related expenses, primarily costs for the hotel isolation program and safety measures for children coming into care.

Budget 2021-22   79

General Government expense is down $26.3 million from budget. The decrease includes a $24.9 million decrease in pension expense, largely due to changes in actuarial assumptions, and a $6.7 million decrease in public employees’ dental plan claims, partially offset by a $5.5 million increase for the Chief Electoral Officer to implement COVID-19 safety protocols for the provincial election.

Financing Charges are down $4.7 million from budget, mainly due to lower-than-budgeted interest rates, partially offset by higher pension expense.

Finally, the $200.0 million budgeted health and public safety contingency has been fully allocated as follows:

• $75.6 million for Saskatchewan Health Authority COVID pressures;

• $40.0 million for the Safe Schools Plan;

• $20.0 million for the Saskatchewan Small Business Emergency Payment Program;

• $17.0 million for Tourism supports;

• $14.2 million for Municipal Grants for Growth;

• $12.3 million for Public Safety response;

• $9.9 million for Custody Services;

• $5.5 million for the Chief Electoral Officer;

• $3.2 million for Court Service enhancements;

• $1.8 million for Saskatchewan Polytechnic Dental Lab renovations; and,

• $0.5 million for Conexus Arts Centre support.

80  Budget 2021-22

G O V E R N M E N T  O F  S A S K A T C H E W A N

Budget

For the Year Ended March 31

	(millions of dollars)
	Budget 2021-22		Forecast 2020-21			Budget 2020-21
Revenue
Taxation		7,238.0		6,706.2			7,202.8
Non-renewable resources		1,328.5		1,096.2			997.4
Net income from government business enterprises		899.2		1,104.9			728.8
Other own-source revenue		2,104.1		1,969.1			1,933.1
Transfers from the federal government		2,908.5		3,219.3			2,786.6
Total Revenue		14,478.3		14,095.7			13,648.7
Expense
Agriculture		879.3		561.0			798.8
Community development		690.4		813.0			762.8
Economic development		527.0		503.7			389.8
Education		3,753.2		3,379.2			3,361.9
Environment and natural resources		414.9		302.5			362.4
Financing charges		755.0		713.5			718.2
General government		524.6		395.6			421.9
Health		6,535.3		6,362.0			6,176.3
Protection of persons and property		845.1		842.5			806.5
Social services and assistance		1,556.7		1,464.2			1,490.3
Transportation		607.7		623.3			585.8
Health and public safety contingency1		–		–			200.0
Total Expense		17,089.2		15,960.5			16,074.7
Deficit		(2,610.9)		(1,864.8	)		(2,426.0	)

Totals may not add due to rounding.

¹ The 2020-21 budgeted health and public safety contingency has been reported in the 2020-21 forecast within the applicable expense themes.

82  Budget 2021-22

G O V E R N M E N T  O F  S A S K A T C H E W A N

Statement of Accumulated Deficit

For the Year Ended March 31

	(millions of dollars)
	Budget 2021-22			Forecast 2020-21			Budget 2020-21
Accumulated deficit, beginning of year		(2,094.6	)		(229.8	)1		(191.3	)
Deficit		(2,610.9	)		(1,864.8	)		(2,426.0	)
Accumulated Deficit, End of Year		(4,705.5	)		(2,094.6	)		(2,617.3	)

Totals may not add due to rounding.

¹ Accumulated deficit as at March 31, 2020, as reported in the 2019-20 Summary Financial Statements, increased by $38.5 million to remove provincial sales tax on capital assets.

G O V E R N M E N T  O F  S A S K A T C H E W A N

Statement of Change in Net Debt

For the Year Ended March 31

	(millions of dollars)
	Budget 2021-22			Forecast 2020-21			Budget 2020-21
Deficit		(2,610.9	)		(1,864.8	)		(2,426.0	)
Acquisition of government service organization capital assets		(1,089.9	)		(988.8	)		(1,044.2	)
Amortization of government service organization capital assets1		628.1			630.2			637.3
Increase in Net Debt		(3,072.7	)		(2,223.4	)		(2,832.9	)
Net debt, beginning of year		(14,512.3	)		(12,288.9	)		(12,288.9	)
Net Debt, End of Year		(17,585.0	)		(14,512.3	)		(15,121.8	)

Totals may not add due to rounding.

¹ Includes disposals and adjustments.

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G O V E R N M E N T  O F  S A S K A T C H E W A N

Schedule of Pension Liabilities

As at March 31

	(millions of dollars)
	Budget 2021-22			Forecast 2020-21			Budget 2020-21
Pension liabilities, beginning of year		6,573.5			7,152.3	1		7,152.3
Adjustment to account for pension costs on an accrual basis		(99.8	)		(578.8	)		(514.5	)
Pension Liabilities, End of Year		6,473.7			6,573.5			6,637.8

Totals may not add due to rounding.

¹ Pension liabilities as at March 31, 2020, as reported in the 2019-20 Summary Financial Statements.

G O V E R N M E N T  O F  S A S K A T C H E W A N

Schedule of Capital Assets

As at March 31

												(millions of dollars)
	Net Book Value March 31 2020			– 2020-21 Forecast – Additions1 Amortization2				Forecast Net Book Value March 31 2021		– 2021-22 Budget – Additions1 Amortization2					Budget Net Book Value March 31 2022
Government service organizations		11,820.3	3		988.8	(630.2	)		12,178.9		1,089.9		(628.1	)		12,640.7
Government business enterprises		15,723.9	4		1,330.3	(892.1	)		16,162.1		1,574.3		(944.3	)		16,792.1
Total Capital Assets		27,544.2			2,319.1	(1,522.3	)		28,341.0		2,664.2		(1,572.4	)		29,432.8

Totals may not add due to rounding.

¹ Includes only capital assets acquired by government entities. Capital transfers provided to entities outside the government reporting entity are expensed.

² Includes disposals and adjustments.

³ Net book value as at March 31, 2020, as reported in the 2019-20 Summary Financial Statements, decreased by $38.5 million to remove capitalized provincial sales tax.

⁴ Net book value as at March 31, 2020, as reported in the 2019-20 Summary Financial Statements.

84  Budget 2021-22

G O V E R N M E N T  O F  S A S K A T C H E W A N

Schedule of Public Debt

As at March 31

	(millions of dollars)
	Budget General Debt1 2021-22		Budget GBE Specific Debt 2021-22		Budget Public Debt2 2021-22		Forecast Public Debt2 2020-21		Budget Public Debt2 2020-21
Government Service Organization (GSO) Debt
General Revenue Fund
– Operating		9,400.0		–		9,400.0		7,200.0		7,300.0
– Saskatchewan Capital Plan3		8,142.0		–		8,142.0		6,690.0		6,691.4
Boards of Education		136.9		–		136.9		145.5		144.1
Global Transportation Hub Authority		40.2		–		40.2		44.2		39.8
Health Sector Affiliates		9.6		–		9.6		9.6		9.6
Saskatchewan Health Authority		59.7		–		59.7		76.0		75.5
Saskatchewan Opportunities Corporation		49.3		–		49.3		50.1		52.3
Water Security Agency		14.3		–		14.3		20.0		20.0
Other		3.4		–		3.4		3.9		3.9
Government Service Organization Debt		17,855.4		–		17,855.4		14,239.3		14,336.6
Government Business Enterprise (GBE) Debt
Municipal Financing Corporation of Saskatchewan		91.1		152.7		243.8		236.2		201.4
Saskatchewan Gaming Corporation		–		5.0		5.0		5.0		15.0
Saskatchewan Liquor and Gaming Authority		–		89.8		89.8		94.8		94.2
Saskatchewan Power Corporation		83.5		6,329.7		6,413.2		6,127.5		6,652.8
Saskatchewan Telecommunications
Holding Corporation		–		1,335.3		1,335.3		1,214.9		1,275.1
Saskatchewan Water Corporation		–		80.9		80.9		78.7		79.4
SaskEnergy Incorporated		62.6		1,680.3		1,742.9		1,600.4		1,714.7
Government Business Enterprise Debt4		237.2		9,673.7		9,910.9		9,357.5		10,032.6
Total		18,092.6		9,673.7		27,766.3		23,596.8		24,369.2
Guaranteed Debt		0.1		–		0.1		0.2		0.8

Totals may not add due to rounding.

¹ General debt is issued by GSOs and includes issued amounts subsequently transferred to GBEs.

² Public debt is shown net of sinking funds.

³ General Revenue Fund – Saskatchewan Capital Plan consists of amounts borrowed by the General Revenue Fund to finance investment in capital assets.

⁴ GBE debt includes both general debt and GBE-specific debt. General debt of GBEs is the amount transferred from the General Revenue Fund to a GBE and recorded as a loan receivable in the Summary Financial Statements. GBE-specific debt is debt issued by, or specifically on behalf of, GBEs. GBE-specific debt is included in “Investment in government business enterprises” in the Summary Financial Statements.

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G O V E R N M E N T  O F  S A S K A T C H E W A N

Schedule of Revenue

For the Year Ended March 31

	(millions of dollars)
	Budget   2021-22			Forecast 2020-21			Budget 2020-21
Own-Source
Taxation
Corporation income		754.6			418.5			780.9
Fuel		477.9			444.0			444.0
Individual income		2,420.8			2,465.0			2,605.4
Property		784.8			773.0			767.1
Provincial sales		2,144.0			1,971.1			1,996.0
Tobacco		201.8			201.7			187.7
Other		454.1			432.9			421.7
Total Taxation		7,238.0			6,706.2			7,202.8
Non-Renewable Resources
Crown land sales		9.2			6.7			12.5
Oil and natural gas		505.1			362.3			175.1
Potash		431.8			404.5			469.4
Resource surcharge		302.6			265.8			252.4
Other		79.8			56.9			88.0
Total Non-Renewable Resources		1,328.5			1,096.2			997.4
Net Income from Government Business Enterprises
Municipal Financing Corporation of Saskatchewan		1.1			1.2			1.0
Saskatchewan Auto Fund		192.1			213.0			121.2
Saskatchewan Gaming Corporation		11.5			(7.1	)		(22.4	)
Saskatchewan Government Insurance		40.0			135.8			81.2
Saskatchewan Liquor and Gaming Authority		423.4			326.6			263.6
Saskatchewan Power Corporation		16.7			136.4			72.3
Saskatchewan Telecommunications Holding Corporation		100.0			126.0			81.8
Saskatchewan Water Corporation		7.0			8.6			6.2
SaskEnergy Incorporated		49.7			58.9			20.0
Saskatchewan Workers’ Compensation Board		(1.3	)		111.1			102.4
Consolidation adjustments		59.0			(5.6	)		1.5
Total Net Income from Government Business Enterprises		899.2			1,104.9			728.8
Other Own-Source Revenue
Fees		1,170.0			1,131.8			1,043.0
Insurance		282.7			284.2			277.6
Investment Income		88.4			119.7			105.7
Transfers from other governments		73.2			76.8			72.2
Miscellaneous		489.8			356.6			434.6
Total Other Own-Source Revenue		2,104.1			1,969.1			1,933.1
Total Own-Source		11,569.8			10,876.4			10,862.1
Transfers from the Federal Government
Canada Health Transfer		1,330.4			1,296.5			1,301.9
Canada Social Transfer		477.4			465.2			467.1
Other		1,100.7			1,457.6			1,017.6
Total Transfers from the Federal Government		2,908.5			3,219.3			2,786.6
Total Revenue		14,478.3			14,095.7			13,648.7

Totals may not add due to rounding.

86  Budget 2021-22

G O V E R N M E N T  O F  S A S K A T C H E W A  N

Glossary of Financial Terms

Accumulated Deficit

The amount by which expense has exceeded revenue from the beginning of provincial incorporation (1905), plus any adjustments that were charged directly to the accumulated deficit. It is calculated as the difference between total assets and liabilities.

Accumulated Surplus

The amount by which revenue has exceeded expense from the beginning of provincial incorporation (1905), plus any adjustments that were charged directly to the accumulated surplus. It is calculated as the difference between total assets and liabilities.

Amortization

The systematic process of allocating an amount to revenue or expense over a period. Capital assets are amortized to expense over their expected remaining economic lives. Actuarial gains and losses, such as those experienced by pension plans, and certain amounts relating to financial instruments are also amortized.

Budget

Government’s main financial plan that accounts for the full nature and extent of the planned financial activities of all entities in the government reporting entity.

Capital Asset

An asset with physical substance that has an economic life extending beyond one year, to be used on a continuing basis and not for sale in the ordinary course of operations.

Consolidation

The method used to account for government service organizations (GSOs). Financial accounts of the GSOs are adjusted to the basis of accounting described in note 1 of the Summary Financial Statements and the adjusted amounts are combined with amounts for other GSOs and partnerships. Inter-entity balances and transactions are eliminated.

Debt

Obligations incurred through the issuance of debt instruments. Debt does not include other liabilities such as accounts payable or pension obligations. Terms used to describe debt include:

• Gross Debt: borrowings through the issuance of debt instruments such as promissory notes and debentures.

• Sinking Funds: funds set aside for the repayment of debt.

• Public Debt: gross debt net of sinking funds.

• General Debt: public debt net of loans to Crown corporations for Government Business Enterprise (GBE) specific debt.

• GBE-Specific Debt:

- debt issued by GBEs; or

- debt issued by the General Revenue Fund (GRF) specifically on behalf of a GBE where the government expects to realize the receivable from the GBE and settle the external debt simultaneously.

• Guaranteed Debt: debt of others that the government has agreed to repay if the others default.

Deficit

The amount by which expense exceeds revenue for a fiscal period.

Budget 2021-22   87

Financing Charges

Costs associated with general debt, pension liabilities, obligations under long-term financing arrangements such as public-private partnerships (P3s) and capital lease obligations. Financing charges include interest, foreign exchange gains and losses, discounts, fees and commissions.

General Revenue Fund (GRF)

The primary operational account for the government through which all provincial monies under the direct authority of the Legislative Assembly are collected and disbursed. The GRF is a GSO and is included in the government reporting entity.

Government Business Enterprise (GBE)

An entity that is controlled by the government, is self-sufficient and has the financial and operating authority to sell goods and services to individuals and organizations outside the government reporting entity as its principal activity. GBEs are recorded in the Budget using the modified equity method.

Government Reporting Entity

The set of entities that are either controlled by government (GSOs and GBEs) or subject to shared control (partnerships).

Government Service Organization (GSO)

An entity that is controlled by the government, except those designated as GBEs or partnerships. GSOs are consolidated in the Budget.

Modified Equity

The method used to account for GBEs. The government’s share of GBE net earnings or losses is included in budgeted revenue. The government’s investment, which is originally recorded at cost, is adjusted annually to include the net earnings or losses and other net equity changes of the GBE.

Net Debt

The difference between liabilities and financial assets. Net debt represents the future revenue required to pay for past transactions or events.

Partnership

A contractual arrangement between the government and one or more partners outside the government reporting entity where the partners share, on an equitable basis, the risks and benefits of the arrangement. Partnerships are proportionately consolidated in the Budget.

Pension Liability

An actuarial estimate of discounted future payments to be made to retirees under government pension plans, net of plan assets.

Proportionate Consolidation

The method used to account for partnerships. Financial accounts of the partnership are adjusted to the basis of accounting described in note 1 of the Summary Financial Statements and the government’s proportionate share of the adjusted amounts is combined with amounts for GSOs and other partnerships. Inter-entity balances and transactions are eliminated.

Public Private Partnership (P3)

A partnership arrangement in the form of a long-term performance-based agreement between the public sector and the private sector to deliver public infrastructure. The liabilities arising from P3 arrangements are classified as obligations under long-term financing arrangements.

Surplus

The amount by which revenue exceeds expense for a fiscal period.

For more information on Budget Basics, visit www.saskatchewan.ca/budget.

88  Budget 2021-22

ANNEX D—DEBT SUMMARY AND TERM DEBT OUTSTANDING

Debt Summary as of March 31, 2021

Summary	Thousands
Payable in Canadian Funds:
Term Debt Issued to the Public - Medium-Term Notes		1,269,449,000
Term Debt Issued to the Public - Public Issue Debentures		21,964,020,000
	$	23,233,469,000
Debentures Issued to the Minister of Finance of Canada		635,625,000
Other Term Debt		484,882,500
Term Debt Outstanding	$	24,353,976,500
Promissory Notes Outstanding		1,509,242,353
Gross Debt Oustanding	$	25,863,218,853

Medium-Term Promissory Notes

Series	Date of Original Issue		Maturity Date		Amount Outstanding			Coupon Rate		Canadian Dollars
803854KK3		01-Apr-20		01-Apr-23	$	800,000,000	CAD		CDOR + 0.48	$	800,000,000
803854GZ5		24-Mar-99		05-Mar-29		60,000,000	CAD		5.60		60,000,000
803854HF8		17-Feb-00		25-Jan-30		25,000,000	CAD		6.25		25,000,000
803854JN91		25-Jan-00 / 17-Jan-02		25-Jan-30		169,995,000	CAD		6.25		169,995,000
803854HE1		25-Jan-00		25-Jan-30		30,000,000	CAD		6.25		30,000,000
803854JR06		13-Feb-09		13-Feb-32		29,954,000	CAD		6.30		29,954,000
803854JB5		10-Jun-03		05-Sep-33		104,500,000	CAD		5.80		104,500,000
803854HY74		16-Sep-02		05-Sep-42		50,000,000	CAD		5.70		50,000,000
					$	1,269,449,000				$	1,269,449,000

Public Issue Debentures

Series	Date of Original Issue		Maturity Date		Amount Outstanding			Coupon Rate		Canadian Dollars
803854FD5		04-Feb-92		04-Feb-22	$	255,000,000	CAD		9.60	$	255,000,000
803854FA1		21-Jul-92		15-Jul-22		300,000,000	USD		8.50		384,020,000
803854JW9		26-Feb-14		03-Jun-24		1,250,000,000	CAD		3.20		1,250,000,000
803854FP8		30-May-95		30-May-25		175,000,000	CAD		8.75		175,000,000
803854KM9		27-Jul-30		02-Sep-25		1,200,000,000	CAD		0.80		1,200,000,000
803854KB3		14-Mar-16		02-Jun-26		1,075,000,000	CAD		2.55		1,075,000,000
803854KE7		24-Feb-17		02-Jun-27		1,000,000,000	CAD		2.65		1,000,000,000
803854KF4		18-May-18		02-Dec-28		1,300,000,000	CAD		3.05		1,300,000,000
803854GY8		04-Dec-98		05-Mar-29		350,000,000	CAD		5.75		350,000,000
803854KJ6		04-Oct-19		02-Jun-30		1,400,000,000	CAD		2.20		1,400,000,000
803854HN		08-Aug-01		05-Sep-31		550,000,000	CAD		6.40		550,000,000
803854JA70		12-May-03		05-Sep-33		450,000,000	CAD		5.80		450,000,000
803854JH24		12-Aug-04		05-Sep-35		400,000,000	CAD		5.60		400,000,000
803854JJ89		15-Feb-05		05-Mar-37		425,000,000	CAD		5.00		425,000,000
803854JL36		26-May-06		01-Jun-40		1,050,000,000	CAD		4.75		1,050,000,000
803854JT6		03-Feb-12		03-Feb-42		800,000,000	CAD		3.40		800,000,000
803854JU3		09-Oct-13		02-Jun-45		1,450,000,000	CAD		3.90		1,450,000,000
803854KA5		17-Apr-15		02-Dec-46		2,200,000,000	CAD		2.75		2,200,000,000
803854KC1		13-Dec-16		02-Jun-48		2,125,000,000	CAD		3.30		2,125,000,000
803854KH0		15-Aug-18		02-Jun-50		2,500,000,000	CAD		3.10		2,500,000,000
803854JX7		13-Mar-14		02-Mar-54		725,000,000	CAD		3.75		725,000,000
803854KG2		26-Jun-18		02-Jun-58		650,000,000	CAD		2.95		650,000,000
803854KL1		02-Jun-20		02-Jun-60		250,000,000	CAD		2.35		250,000,000
					$	21,880,000,000				$	21,964,020,000

D-1

Canada Pension Plan Debt¹

Debenture Number	Date of Issue		Maturity Date		Amount Outstanding			Coupon Rate		Canadian Dollars
CPP-58		03-Nov-16		03-Nov-21	$	1,525,000	CAD		1.36	$	1,525,000
CPP-40		01-Dec-11		01-Dec-21		3,900,000	CAD		2.96		3,900,000
CPP-17		11-Jun-07		11-Jun-22		3,900,000	CAD		4.81		3,900,000
CPP-42/43		06-Jul-12		06-Jul-22		62,705,000	CAD		2.53		62,705,000
CHC-19		01-Sep-02		01-Sep-22		8,972,000	CAD		5.95		8,972,000
CHC-20		01-Oct-02		01-Oct-22		7,703,000	CAD		5.78		7,703,000
CHC-21		04-Nov-02		04-Nov-22		9,444,000	CAD		6.01		9,444,000
CHC-22/23		01-Dec-02		01-Dec-22		4,823,000	CAD		5.97		4,823,000
CHC-24		04-Jan-03		04-Jan-23		4,556,000	CAD		5.73		4,556,000
CHC-25		01-Mar-23		01-Mar-23		5,684,000	CAD		5.84		5,684,000
CHC-26		02-May-03		02-May-23		8,200,000	CAD		5.81		8,200,000
CHC-27/28		01-Jun-03		01-Jun-23		17,530,000	CAD		5.46		17,530,000
CPP-65		04-Jul-03		04-Jul-23		6,000,000	CAD		2.42		6,000,000
CPP-66		03-Nov-18		03-Nov-23		5,000,000	CAD		2.80		5,000,000
CPP-67		01-Dec-18		01-Dec-23		7,000,000	CAD		2.77		7,000,000
CHC-29/30		01-Mar-04		01-Mar-24		14,459,000	CAD		5.32		14,459,000
CPP-68		01-Jun-19		01-Jun-24		12,427,000	CAD		1.98		12,427,000
CPP-69		05-Jun-19		05-Jun-24		15,000,000	CAD		1.98		15,000,000
CPP-46		05-Jun-14		05-Jun-24		15,000,000	CAD		2.90		15,000,000
CPP-48		01-Dec-14		01-Dec-24		6,000,000	CAD		2.71		6,000,000
CHC-31		10-Apr-05		10-Apr-25		1,700,000	CAD		5.05		1,700,000
CPP-31		03-Dec-10		03-Dec-25		50,000,000	CAD		4.15		50,000,000
CPP-34		01-Mar-11		01-Mar-26		3,000,000	CAD		4.33		3,000,000
CPP-37		04-Jul-11		04-Jul-26		3,000,000	CAD		3.85		3,000,000
CPP-7		08-Aug-06		08-Aug-26		7,330,000	CAD		4.86		7,330,000
CPP-59		12-Mar-17		12-Mar-27		16,559,000	CAD		2.68		16,559,000
CPP-13		10-Apr-07		10-Apr-27		2,200,000	CAD		4.60		2,200,000
CPP-30		03-Dec-10		03-Dec-30		9,000,000	CAD		4.32		9,000,000
CPP-44		01-Dec-13		01-Dec-33		9,800,000	CAD		3.94		9,800,000
CPP-47		05-Jun-14		05-Jun-34		13,100,000	CAD		3.51		13,100,000
CPP-1		10-Jul-05		10-Jul-35		14,147,000	CAD		4.71		14,147,000
CPP-50		12-Dec-15		12-Dec-35		2,407,000	CAD		3.29		2,407,000
CPP-51		10-Jan-16		10-Jan-36		2,400,000	CAD		3.18		2,400,000
CPP-53		09-May-16		09-May-36		22,010,000	CAD		3.17		22,010,000
CPP-54		02-Jun-16		02-Jun-36		23,557,000	CAD		3.18		23,557,000
CPP-56		04-Jul-16		04-Jul-36		15,552,000	CAD		2.93		15,552,000
CPP-57		03-Nov-16		03-Nov-36		4,575,000	CAD		2.94		4,575,000
CPP-60		10-Apr-17		10-Apr-37		2,800,000	CAD		3.20		2,800,000
CPP-61		11-May-17		11-May-37		2,600,000	CAD		3.02		2,600,000
CPP-62		11-Jun-17		11-Jun-37		18,991,000	CAD		2.85		18,991,000
CPP-64		03-Mar-18		03-Mar-38		5,000,000	CAD		3.15		5,000,000
CPP-19		11-Jul-08		11-Jul-38		23,684,000	CAD		4.71		23,684,000
CPP-70		01-Sep-19		01-Sep-39		4,500,000	CAD		2.39		4,500,000
CPP-71		01-Dec-19		01-Dec-39		33,000,000	CAD		2.46		33,000,000
CPP-49		01-Mar-15		01-Mar-40		5,093,000	CAD		2.20		5,093,000
CPP-72		01-Mar-20		01-Mar-40		10,174,000	CAD		2.77		10,174,000
CPP-29		03-May-10		03-May-40		13,000,000	CAD		4.80		13,000,000
CPP-52		01-Mar-16		01-Mar-41		4,600,000	CAD		3.16		4,600,000
CPP-63		01-Mar-18		01-Mar-41		10,718,000	CAD		3.29		10,718,000
CPP-55		03-Jun-16		03-Jun-41		5,000,000	CAD		3.21		5,000,000
CPP-41		01-Mar-12		01-Mar-42		76,300,000	CAD		3.44		76,300,000
					$	635,625,000				$	635,625,000

D-2

Other Term Debt

Series	Date of Original Issue		Maturity Date		Amount Outstanding			Coupon Rate		Canadian Dollars
N/A		06-Oct-20		06-Oct-50		115,000,000	EUR		2.08	$	179,779,500
N/A		Various		Various		305,103,000	CAD		Various		305,103,000
						420,103,000				$	484,882,500

¹ Debentures held by the Canada Pension Plan Fund are payable between 5 and 30 years after their respective date of issue, are not negotiable, not transferable or assignable, but are redeemable in whole or in part before maturity at the option of the Minister of Finance of Canada, on six months’ prior notice when he deems it necessary in order to meet the requirements of the Canada Pension Plan. The debentures are subject in part to annual sinking funds.

² The Province has executed swap contracts to convert certain interest payments from floating to fixed for the fiscal year ending March 31, 2021. As of March 31, 2021, $650 million in outstanding floating rate debentures have not been swapped to a fixed-rate obligation.

³ The Province has executed currency swap contracts to convert any foreign denominated debt into Canadian denominated debt.

D-3

ANNEX E—MID-YEAR REPORT

See attached.

E-1

TABLE OF CONTENTS

2021-22 MID-YEAR REPORT

2021-22 Mid-Year Highlights	1
Economic Update	3
Revenue Update	7
Expense Update	10
Public Debt Update	11
Net Debt Update	12

2021-22 Mid-Year Report

Government of Saskatchewan

November 29, 2021

2021-22 MID-YEAR

HIGHLIGHTS

Overview

At mid-year, much of Saskatchewan’s economy is performing well.

Higher commodity prices, particularly for oil and potash, have increased non-renewable resource revenue. Individual and Corporate Income Tax and Provincial Sales Tax revenue have also improved, underscoring the province’s economic resilience and strength in the construction, retail and service sectors.

However, the drought that hit Saskatchewan this summer was widespread and has substantially increased crop insurance and drought-relief expenses needed to help producers. Higher costs related to fighting wildfires through a dry spring and summer and health care pressures due to the persistence of the global COVID-19 pandemic also contributed to increased expense.

A deficit of $2.7 billion is forecast at mid-year, $97 million higher than at budget, but a $29 million improvement from the first quarter forecast.

Economy

Saskatchewan real GDP is expected to grow by 3.6 per cent in 2021, slightly higher than the Government of Saskatchewan’s Budget forecast of 3.4 per cent growth. This expected growth is in part due to the lifting of pandemic-related restrictions in July, which helped the labour market recover, strong investments in residential housing and strong commodity prices, particularly potash and oil.

Saskatchewan’s economy is expected to continue to grow by 3.8 per cent in 2022, slightly higher than the 3.2 per cent growth projected in the Budget. This growth is a reflection of the expectation of continued strength in the Saskatchewan economy.

Employment is currently forecast to increase by 15,900 jobs in 2021 and the unemployement rate is forcast to average 7.0 per cent.

2021-22 ECONOMIC AND FISCAL OVERVIEW

(Millions of Dollars)	2020-21 Actual		2021-22 Budget		First Quarter Forecast		Mid-Year Projection		Change From
										Budget	First Quarter
Revenue		14,524		14,478		15,236		16,869		2,391	1,633
Expense		15,651		17,089		17,973		19,577		2,488	1,604
Deficit		(1,127)		(2,611)		(2,737)		(2,708)		(97)	29
Key Metrics
Public Debt ($M)		23,583		27,766		27,857		27,833		66	(25)
Net Debt ($M)		13,683		17,585		n/a		16,714		(871)	n/a
Net Debt as % of GDP		17.6		21.7		n/a		19.4		(2.3)	n/a
Economic Forecast		2020		2021		2021		2021
Real GDP growth (%)		(4.9)		3.4		3.4		3.6		0.2	0.2
Nominal GDP growth (%)		(6.6)		5.9		5.9		11.0		5.1	5.1

Totals may not add due to rounding.

2021-22 Mid-Year Report	page 1

Revenue

Revenue is forecast to increase $2.4 billion from budget, (16.5 per cent), with significant increases in all major categories.

$668.8 million of this revenue increase is from non-renewable resources, mainly due to higher potash and oil prices. Taxation revenue is up $616.7 million from budget reflecting higher 2020 personal and corporate income tax assessments.

Federal transfers are up $542.6 million from budget, mostly due to drought, pandemic, childcare and municipal infrastructure federal funding. Other own source revenue is up $347.1 million, largely due to crop insurance recoveries through private reinsurance purchased by the Saskatchewan Crop Insurance Corporation. Government Business Enterprise net income is forecast to be up $215.4 million at mid-year, due mainly to higher investment earnings.

Expense

Expense is forecast to be up $2.5 billion from budget (14.6 per cent).

The most significant increase over budget at mid-year is in Agriculture expense, which is up $2.1 billion. This includes

$1.8 billion for crop insurance claims, bringing the total indemnity forecast to $2.4 billion, and $292.5 million in relief for livestock producers hit with higher costs due to the widespread drought that impacted Saskatchewan.

In addition, there is a $250.0 million increase in Health expense due to pandemic pressures and drug plan increases. Protection of Persons and Property expense is up $100.9 million at mid-year largely due to the pandemic and wildfires which emerged during a very dry spring and summer.

2021-22 BUDGET UPDATE - MID-YEAR

		First Quarter Forecast		Mid-Year Projection		Change From
(Millions of Dollars)	Budget						Budget	First Quarter
Revenue
Taxation	7,238.0		7,238.0		7,854.7		616.7	616.7
Non-renewable resources	1,328.5		1,688.4		1,997.3		668.8	308.9
Net income from government business enterprises	899.2		850.9		1,114.6		215.4	263.7
Other own-source revenue	2,104.1		2,148.7		2,451.2		347.1	302.5
Transfers from the federal government	2,908.5		3,309.6		3,451.1		542.6	141.5
Total Revenue	14,478.3		15,235.6		16,868.9		2,390.6	1,633.3
Expense
Agriculture	879.3		1,585.9		3,022.8		2,143.5	1,436.9
Community development	690.4		753.0		742.3		51.9	(10.7)
Economic development	527.0		540.3		541.2		14.2	0.9
Education	3,753.2		3,867.1		3,789.9		36.7	(77.2)
Environment and natural resources	414.9		414.9		378.2		(36.7)	(36.7)
Financing charges	755.0		755.0		755.0		-	-
General government	524.6		499.9		500.6		(24.0)	0.7
Health	6,535.3		6,535.3		6,785.3		250.0	250.0
Protection of persons and property	845.1		857.2		946.0		100.9	88.8
Social services and assistance	1,556.7		1,556.7		1,508.0		(48.7)	(48.7)
Transportation	607.7		607.7		607.7		-	-
Total Expense	17,089.2		17,973.0		19,577.0		2,487.8	1,604.0
Deficit	(2,610.9)		(2,737.4)		(2,708.1)		(97.2)	29.3

Totals may not add due to rounding.

2021-22 Mid-Year Report	page 2

Public Debt

Public debt is forecast to be $66.2 million higher than at budget, due to a higher deficit, increased borrowing requirements for SaskTel infrastructure, and additional cash requirements related to the payment of crop insurance indemnity claims, offset partly by a decrease in borrowing for the Saskatchewan Capital Plan and for SaskPower.

Economic Update

Net Debt

At mid-year, net debt is projected to be $16.7 billion at March 31, 2022, $871 million lower than forecast at budget. This reflects improved results for 2020-21 and a lower capital spending forecast.

Saskatchewan is positioned to have one of the lowest net debt to GDP percentages among the provinces.

Saskatchewan’s economy is forecast to rebound by 3.6 per cent in 2021, a substantial turnaround from a 4.9 per cent decline in 2020, a drop predicated by the economic fallout from the global pandemic and low oil prices.

This improvement from the budget forecast, where real GDP in 2021 was forecast to increase by 3.4 per cent, is attributable to a number of factors, including the lifting in July of restrictions related to the pandemic, which allowed for a strong labour market rebound.

In addition, there was higher investment in the residential housing market and strong commodity prices emerged, most notably for potash and oil. While uncertainty remains with respect to the COVID-19 pandemic, and while the drought has impacted the agriculture sector, many aspects of the economy continue to perform well.

CANADA AND U.S ECONOMIC ASSUMPTIONS

	Actual		2021-22 Budget						2021-22  Mid-Year
	2020		2021		2022		2023		2021		2022		2023
Canadian real GDP growth, %		(5.3)		3.7		3.6		2.2		5.1		4.4		1.6
U.S. real GDP growth, %		(3.4)		3.1		2.5		2.5		5.9		4.1		2.5
Canada CPI growth, %		0.7		1.3		1.9		2.0		3.3		2.7		2.0
Canada GDP deflator growth, %		0.7		2.4		1.9		2.3		6.9		1.0		1.4
Canadian short-term interest rate, %		0.42		0.17		0.20		0.50		0.14		0.29		0.85
10-yr Government of Canada bond, %		0.72		0.81		1.08		1.30		1.27		1.30		1.81
Canadian dollar, U.S. cents		74.60		78.80		80.00		81.20		79.88		79.98		80.63

 Source: Statistics Canada, IHS Markit, Ministry of Finance.

Saskatchewan Economic Performance and Outlook

The province’s economy is showing signs of strength as it recovers from the pandemic. Total employment increased year-to-date by 2.5 per cent compared to the same period in 2020, reaching 562,800 people employed in October 2021.

Employment is forecast to increase by 15,900 in 2021 and by another 12,000 jobs in 2022. While unemployment is expected to average 7 per cent in 2021, total employment is up about 13,730 jobs (January to October 2021) compared to the same time period in 2020. Retail and wholesale trade account for 10,170 of the increase in jobs.

2021-22 Mid-Year Report	page 3

Oil prices have strengthened this year due to increased demand driven by the reopening of major economies globally. Natural gas prices have also increased due to recent shortages.

The average West Texas Intermediate (WTI) oil price has increased, to about $US66.47 from January through the end of October 2021, compared to an average of $US38.44 through the same period in 2020. The average well-head oil price in Canadian dollars is expected to increase from $34.85 per barrel in 2020 to $65.74 per barrel in 2021.

Oil production is up by 1.2 per cent from January through September 2021, while drilling is down by about 24.7 per cent over same time frame in 2020.

Potash production in the first nine months of 2021 remains at the same level compared to the same time frame in 2020, while prices have surged. Uranium production is up 2.9 per cent January through September in 2021, compared to the same period in 2020 and sales have increased by 32.9 per cent this year.

Crop production, due to widespread drought conditions in the province, fell by approximately 40.6 per cent. This year’s crop size of roughly 22.3 million tonnes is well below the 10-year average of approximately 33.0 million tonnes.

COMMODITY PRICE ASSUMPTIONS

	2020		2021-22 Budget						2021-22 Mid-Year
	Actual		2021		2022		2023		2021		2022		2023
WTI Oil Price (US$/barrel)		39.39		55.00		55.00		56.00		66.50		69.00		66.00
Average well-head Oil Price (C$/barrel)		34.83		50.00		49.30		49.60		65.74		67.93		62.96
Natural gas, (C$ per GJ)		2.32		2.32		2.32		2.32		3.50		3.60		3.10
Potash (C$/K2O tonne)1		387.32		396.50		396.20		398.30		537.98		616.98		624.54
Potash (US$/KCl tonne)1		176.50		190.60		193.40		197.30		262.14		301.01		307.18

¹ The potash industry quotes prices in US dollars per KCI tonne. However, provincial royalty calculations are based on the Canadian dollar price per K₂O tonne.

Sources: Ministry of Energy and Resources

2021-22 Mid-Year Report	page 4

Year-to-date manufacturing sales are up by 42.2 per cent (January through September) compared to the same period in 2020, the highest growth among provinces. Sales in food services and dining increased significantly from January through August, and are up 19.7 per cent compared to the same period in 2020.

Other major economic indicators such as retail sales, wholesale trade, sales of new motor vehicles, investment in residential building construction, building permits and housing starts have all experienced significant year-to-date growth, compared to the same time period in 2020.

SASKATCHEWAN 2021 YEAR-TO-DATE (YTD) ECONOMIC INDICATORS ¹

(per cent change from same period last year)	SK % Change		SK Ranking Among		CAN
			Provinces
Employment (Oct.)		2.5		10		4.9
Unemployment Rate (Oct.)		6.9		4th lowest		7.9
Employment Rate (Oct.)		62.6		2		60.0
Consumer Price Index (Oct.)		2.4		lowest		3.1
Average Weekly Earnings (Aug.)		1.1		8		3.5
Retail Sales (Aug.)		13.5		8		15.1
Wholesale Trade (Sept.)		10.6		9		15.2
New Motor Vehicle Sales (Sept.)		6.6		10		11.7
Food Services & Drinking Places Sales (Aug.)		19.7		4		12.6
Manufacturing Sales (Sept.)		42.2		1		18.0
International Goods Exports (Sept.)		22.5		5		21.5
Building Permits (Sept.)		32.3		4		27.2
Housing Starts (Q3)		42.8		2		31.7
Investment in Building Construction (Sept.)		14.6		7		24.4
Residential (Sept.)		36.4		6		35.1
Non-residential (Sept.)		(26.9)		10		(4.0)

As of November 18, 2021

¹For the unemployment rate and employment rate, figures represent the YTD average. All other figures represent % change from YTD value [or YTD average, in the case of employment, consumer price index, and average weekly earnings] in 2020 to YTD value [or YTD average] in 2021.

Source: Statistics Canada

Overall, real GDP is forecast by the Government of Saskatchewan to grow by 3.6 per cent in 2021, and nominal GDP is expected to rise 11.0 per cent. In 2022 real GDP is expected to rise 3.8 per cent and nominal GDP is expected to grow by 5.0 per cent.

2021-22 Mid-Year Report	page 5

Private Sector Forecasts

The view of private sector forecasters is that Saskatchewan’s economy is expected to show substantial growth in 2021 compared to 2020.

Based on the latest average of private sector forecasts, Saskatchewan’s real GDP is expected to increase 4.3 per cent in 2021, sixth highest among Canadian provinces. Continued growth is expected in 2022 and the average of private sector forecasts expects Saskatchewan’s real GDP to increase by 4.0 per cent, fourth highest among the provinces.

PRIVATE SECTOR FORECASTS OF SASKATCHEWAN REAL GDP GROWTH ¹

 (per cent change from same period last year)

	2021		2022		Release Date
IHS Markit		4.0		4.5		21-Nov
CBOC		3.6		4.6		21-Nov
TD Bank		4.0		3.4		21-Sep
Royal Bank of Canada		3.8		5.9		21-Sep
Bank of Montreal		3.5		3.4		21-Nov
CIBC		5.6		3.4		21-Jul
Scotiabank		4.4		3.6		21-Oct
National Bank		4.6		3.9		21-Nov
Laurentian Bank		5.6		3.5		21-Jul
Average		4.3		4.0
2021-22 Mid-Year Forecast		3.6		3.8

 ¹As of Nov. 18, 2021.

 Sources: Major Canadian banks, IHS Markit and Conference Board of Canada

PRIVATE SECTOR FORECASTS OF REAL GDP BY PROVINCE ¹

 (per cent change from same period last year)

	2021		Rank		2022		Rank
BC		5.6		3		4.2		3
AB		6.0		2		4.6		1
SK		4.3		6		4.0		4
MB		4.5		5		3.9		5
ON		4.8		4		4.5		2
QC		6.2		1		3.6		6
NB		4.0		8		2.9		9
NS		4.1		7		3.0		8
PE		3.9		9		3.4		7
NL		3.5		10		2.6		10
CA		5.2		--		4.2		--

 ¹As of Nov. 18, 2021.

 Sources: Major Canadian banks, IHS Markit and Conference Board of Canada

2021-22 Mid-Year Report	page 6

Revenue Update

At mid-year, revenue is forecast to be $16.9 billion, an increase of $2.4 billion (16.5 per cent) from budget and $1.6 billion (10.7 per cent) from first quarter, with higher revenue forecast across all major categories.

Taxation

Taxation revenue is forecast to increase $616.7 million from budget.

Individual and Corporate Income Tax are forecast to be up $439.6 million and $90.4 million from budget, respectively, primarily due to stronger-than-anticipated 2020 assessments that resulted in an increase in prior-year reconciliation adjustments in 2021-22.

Provincial Sales Tax revenue is projected to increase by $80.8 million, reflecting stronger-than-budgeted economic activity, particularly in the construction, retail and service sectors.

Higher-than-budgeted cannabis consumption has led to a $5.9 million increase in other taxes revenue, while Fuel Tax, Property Tax and Tobacco Tax are in line with budget expectations at mid-year.

Non-Renewable Resources

At mid-year, revenue from non-renewable resources is forecast to increase $668.8 million from budget.

Potash revenue is expected to be $402.5 million higher than budget, primarily due to higher average prices (US$272 per KCI tonne, up US$81 from budget), partly offset by a higher exchange rate forecast.

Oil and natural gas revenue is expected to be $240.4 million higher mainly due to higher West Texas Intermediate (WTI) oil prices, a narrower light-heavy oil price differential and an increase in oil production, partially offset by a higher exchange rate.

The Mid-Year Report also includes a forecast increase of $18.9 million in resource surcharge revenue, due to strength in the potash and oil sectors, while Crown land sales are forecast to increase $6.6 million due to higher-than-expected April and August subsurface mineral rights sales.

Key Assumptions

•   WTI

On a fiscal year basis, WTI is now forecast to average US$69.29 per barrel in 2021-22, up from US$54.33 at budget. WTI Averaged US$68.32 through the second quarter of the fiscal year. A US$1 per barrel change in the fiscal-year average WTI oil price results in an estimated $14 million change in 2021-22 oil royalties (all else being equal).

•   Oil Differential

The light–heavy oil differential forecast at mid-year is 12.7 per cent, down from 19.7 per cent at budget, reflecting higher-than-expected Western Canadian heavy crude oil demand from U.S. refiners. A lower differential results in higher oil revenue for Saskatchewan (all else being equal).

•   Oil Production

Oil production is forecast to be 162.7 million barrels at mid-year, up from 160.0 million barrels at budget.

•   Exchange Rate

The exchange rate is forecast, at mid-year, to average 80.1 U.S. cents in 2021-22, up from 79.1 U.S. cents at budget. Through the second quarter of the fiscal year, the Canadian dollar averaged 80.4 U.S. cents.

A 1 U.S. cent change in the fiscal-year average exchange rate results in an estimated $33 million change in 2021-22 non-renewable resource revenue (all else being equal).

A lower exchange rate results in higher revenue and a higher exchange rate results in lower revenue, as resource exports are priced in U.S. dollars.

2021-22 Mid-Year Report	page 7

KEY RESOURCE ASSUMPTIONS					2021-22				Change From
	2020-21		2021-22		First		2021-22				First
	Actual		Budget		Quarter		Mid-Year		Budget		Quarter
WTI Oil Price (US$/barrel)		42.32		54.33		68.04		69.29		14.96		1.25
Light-Heavy Differential (% of WTI)		16.9		19.7		13.3		12.7		(7.0)		(0.6)
Well-head Oil Price (C$/barrel)1		36.54		49.31		65.41		68.85		19.54		3.44
Oil Production (million barrels)		152.5		160.0		163.1		162.7		2.7		(0.4)
Potash Price (mine netback, US$/KCl tonne)2		180		191		231		272		81		41
Potash Price (mine netback, C$/K2O tonne)2		390		396		465		558		162		93
Potash Sales (million K2O tonnes)2		14.1		14.3		14.1		14.2		(0.1)		0.1
Canadian Dollar (US cents)		75.75		79.12		82.17		80.13		1.01		(2.04)

 ¹ The average price per barrel of Saskatchewan light, medium and heavy oil.

 ² Ministry of Finance calculations derived from calendar-year forecasts.

Government Business Enterprises (GBE) Net Income

Net income from GBEs is forecast to be up $215.4 million from budget, primarily reflecting the following changes:

• increased earnings for Saskatchewan Government Insurance ($81.1 million), the Auto Fund ($76.5 million) and Workers Compensation Board ($70.1 million) primarily from lower claims and increased investment earnings; and,

• increased earnings from Saskatchewan Liquor and Gaming Authority ($17.7 million) and SaskEnergy ($9.0 million), due to higher sales revenues.

Partially offset by,

• decreased earnings at SaskPower ($36.7 million) due to higher natural gas fuel costs; and,

• other net changes across the GBE sector amount to a decrease of $8.0 million.

Other Own Source Revenue

Other own-source revenue is up $347.1 million from budget, largely due to:

• $442.0 million increase in insurance revenue, mainly due to recoveries from private reinsurance purchased by the Saskatchewan Crop Insurance Corporation along with higher Crop Insurance producer premiums as a result of an increase in insured acres and higher prices; and,

• $25.4 million increase in fees revenue, primarily reflecting higher forestry fee revenue.

Partially offset by,

• $120.3 million decrease in miscellaneous revenue primarily reflecting the continued impact of the pandemic on some sources of revenue across the government.

Federal Transfers

Transfers from the federal government are forecast to increase $542.6 million from budget, largely due to:

• $171.0 million for the Saskatchewan Agricultural Stabilization Fund, related to the Canada-Saskatchewan Drought Response Initiative;

• $131.6 million for Saskatchewan’s share of the Canada wide Early Learning and Child Care Agreement and the Early Learning and Child Care one-time workforce investment;

• $124.1 million for Saskatchewan’s share of the Helping Our Health Systems Recover program;

• $62.6 million in one-time top-up funding for the Canada Community-Building Fund;

• $31.0 million due to a higher federal portion of Crop Insurance premiums as a result of an increase in insured acres and higher prices; and

• $31.0 million for Saskatchewan’s share of Canada’s COVID-19 Immunization Plan.

Partially offset by,

• $41.5 million decrease in funding for the Accelerated Site Closure Program, consistent with expected activity under the program.

2021-22 Mid-Year Report	page 8

2021-22 SCHEDULE OF REVENUE
			First Quarter Forecast		Mid-Year Projection		Change From
(Millions of Dollars)	Budget						Budget		First Quarter
Taxation
Corporation income		754.6		754.6		845.0		90.4		90.4
Fuel		477.9		477.9		477.9		-		-
Individual income		2,420.8		2,420.8		2,860.4		439.6		439.6
Property		784.8		784.8		784.8		-		-
Provincial sales		2,144.0		2,144.0		2,224.8		80.8		80.8
Tobacco		201.8		201.8		201.8		-		-
Other		454.1		454.1		460.0		5.9		5.9
Total Taxation		7,238.0		7,238.0		7,854.7		616.7		616.7
Non-Renewable Resources
Crown land sales		9.2		12.1		15.8		6.6		3.7
Oil and natural gas		505.1		710.0		745.5		240.4		35.5
Potash		431.8		581.1		834.3		402.5		253.2
Resource surcharge		302.6		312.6		321.5		18.9		8.9
Other		79.8		72.6		80.2		0.4		7.6
Total Non-Renewable Resources		1,328.5		1,688.4		1,997.3		668.8		308.9
Net Income from Government Business Enterprises
Municipal Financing Corporation of Saskatchewan		1.1		1.1		1.1		-		-
Saskatchewan Auto Fund		192.1		192.1		268.6		76.5		76.5
Saskatchewan Gaming Corporation		11.5		6.0		3.5		(8.0)		(2.5)
Saskatchewan Government Insurance		40.0		40.0		121.1		81.1		81.1
Saskatchewan Liquor and Gaming Authority		423.4		428.9		441.1		17.7		12.2
Saskatchewan Power Corporation		16.7		(1.5)		(20.0)		(36.7)		(18.5)
Saskatchewan Telecommunications Holding Corporation		100.0		100.0		100.0		-		-
Saskatchewan Water Corporation		7.0		7.1		7.6		0.6		0.5
SaskEnergy Incorporated		49.7		35.0		58.7		9.0		23.7
Saskatchewan Workers’ Compensation Board		(1.3)		(12.5)		68.8		70.1		81.3
Consolidation adjustments		59.0		54.7		64.1		5.1		9.4
Total Net Income from Government Business Enterprises		899.2		850.9		1,114.6		215.4		263.7
Other Own-Source Revenue
Fees		1,170.0		1,180.0		1,195.4		25.4		15.4
Insurance		282.7		317.3		724.7		442.0		407.4
Investment income		88.4		88.4		88.4		-		-
Transfers from other governments		73.2		73.2		73.2		-		-
Miscellaneous		489.8		489.8		369.5		(120.3)		(120.3)
Total Other Own-Source Revenue		2,104.1		2,148.7		2,451.2		347.1		302.5
Transfers from the Federal Government
Canada Health Transfer		1,330.4		1,330.4		1,331.7		1.3		1.3
Canada Social Transfer		477.4		477.4		477.8		0.4		0.4
Other		1,100.7		1,501.8		1,641.6		540.9		139.8
Total Transfers from the Federal Government		2,908.5		3,309.6		3,451.1		542.6		141.5
Total Revenue		14,478.3		15,235.6		16,868.9		2,390.6		1,633.3

Totals may not add due to rounding.

2021-22 Mid-Year Report	page 9

Expense Update

At mid-year, expense is forecast to be $19.6 billion, an increase of $2.5 billion (14.6 per cent) from budget and $1.6 billion from first quarter. The increase is primarily due to higher expense for Crop Insurance indemnities resulting from drought conditions across much of the province as well as funding to livestock producers for drought relief. There is also additional health expense primarily for COVID response.

Agriculture is up $2.1 billion from budget primarily due to $1.8 billion for Crop Insurance indemnities resulting from the widespread drought experienced in much of Saskatchewan, bringing the total indemnity forecast for the year to $2.4 billion. It also includes $292.5 million through the AgriRecovery program, to help producers maintain breeding stock and address the high costs they face due to the drought.

Health increased $250.0 million from budget reflecting $220.0 million for the Saskatchewan Health Authority, due to pandemic response pressures; and $30.0 million for the Ministry of Health for pharmacy vaccine delivery and utilization pressures in the Saskatchewan Prescription Drug Plan.

Protection of Persons and Property expense is up $100.9 million from budget, including $83.3 million for the Saskatchewan Public Safety Agency due to a high wildfire season and pandemic response activities. There is also an increase of $7.6 million from budget for custody, supervision and rehabilitation services primarily due to operational issues related to the pandemic. There is $5.3 million for Courts and Civil Justice primarily attributed to operational pressures due to the pandemic.

Community Development is up $51.9 million from budget primarily due to $62.6 million for the top-up amount for the Canada Community-Building Fund announced in March 2021 by the federal government. This increase will be fully offset by revenue received by the federal government.

Education expense is forecast to increase a net $36.7 million from budget reflecting a $131.6 million increase related to the new child care agreement with the federal government. This is partially offset by $60.0 million lower-than-budgeted spending by the Boards of Education, a $16.3 million decrease to pension expense, $9.4 million lower spending by regional colleges due to reduced operations during the pandemic, and $5.8 million lower-than-budgeted utilization of the Provincial Training Allowance program.

Economic Development is up $14.2 million from budget primarily due to a $10.8 million increase for COVID-19 support programs. The increase also includes $9.5 million for the Saskatchewan Economic Recovery Rebate, due to the timing of program payments over two years, and $6.3 million for SaskBuilds due to increased progress on projects such as the Meadow Lake Tribal Council Bioenergy Project, under the federally—funded Investing in Canada Infrastructure Program.

General Government expense is down $24.0 million from budget due to a $27.1 million decrease in pension expense as a result of changes in interest rates and plan experience, partially offset by $2.0 million to support the Federation of Sovereign Indigenous Nations (FSIN) to research into undocumented deaths and burials on formerly federally operated schools in the province.

Environment and Natural Resources is down $36.7 million from budget due mainly to $41.5 million for the Saskatchewan Research Council because of lower than budgeted program uptake for the Accelerated Site Closure Program, offset by smaller net increases across the theme.

Social Services and Assistance expense is down $48.7 million from budget as the result of lower-than-budgeted utilization of financial assistance programs.

Transportation expense and Financing Charges are unchanged from budget.

2021-22 Mid-Year Report	page 10

Public Debt Update

At mid-year, public debt is now forecast to be $27.8 billion at March 31, 2022, which is $66.2 million higher than at budget.

The increase in forecast public debt is primarily attributable to $275.0 million of higher General Revenue Fund (GRF) operating debt, partially offset by a $100.0 million decrease in GRF – Saskatchewan Capital Plan debt due to a deferral of capital spending to future years due to the timing of projects.

The reduction in capital spending includes $68.0 million less to the education sector for various school projects, $64.0 million less to the corrections and justice sector related to the remand centre and $35.0 million less related to highways projects. The province has received a $62.6 million

federal transfer for the municipal sector, doubling the Canada Community-Building Fund, which partly offsets these reductions.

Also offsetting the increase in GRF debt is a $105.3 million decrease in GBE debt, including $142.5 million of lower debt at SaskPower due to lower-than-expected cash operating needs arising from the elimination of its budgeted equity repayment to CIC and other improvements to operating cash flow.

The decreases in GBE debt are partially offset by $58.6 million of higher debt at SaskTel due to obligations arising from the recently completed 5G spectrum action.

Debt Charges are unchanged from budget at $755.0 million.

2021-22 SCHEDULE OF PUBLIC DEBT	Budget		Mid-Year		Change from
As at March 31, 2022 (Millions of Dollars)			Projection		Budget
Government Service Organization Debt
General Revenue Fund -Operating		9,400.0		9,675.0		275.0
General Revenue Fund -Saskatchewan Capital Plan 1		8,142.0		8,042.0		(100.0)
Boards of Education		136.9		134.4		(2.5)
Global Transportation Hub Authority		40.2		40.2		-
Health Sector Affiliates		9.6		9.6		-
Saskatchewan Health Authority		59.7		59.7		-
Saskatchewan Opportunities Corporation		49.3		48.3		(1.0)
Water Security Agency		14.3		14.3		-
Other		3.4		3.4		-
Government Service Organization Debt		17,855.4		18,026.9		171.5
Government Business Enterprise Debt
Municipal Financing Corporation of Saskatchewan		243.8		237.6		(6.2)
Saskatchewan Gaming Corporation		5.0		5.0		-
Saskatchewan Liquor and Gaming Authority		89.8		89.8		-
Saskatchewan Power Corporation		6,413.2		6,270.7		(142.5)
Saskatchewan Telecommunications Holding Corporation		1,335.3		1,393.9		58.6
Saskatchewan Water Corporation		80.9		80.9		-
SaskEnergy Incorporated		1,742.9		1,727.7		(15.2)
Government Business Enterprise Debt 2		9,910.9		9,805.6		(105.3)
Public Debt 3		27,766.3		27,832.5		66.2
Guaranteed Debt		0.1		0.1		-

¹General Revenue Fund - Saskatchewan Capital Plan consists of amounts borrowed by the General Revenue Fund to finance investment in infrastructure assets.

² GBE debt includes both general debt and GBE-specific debt. General debt of GBEs is the amount transferred from the General Revenue Fund to a GBE and recorded as a loan receivable in the Summary Financial Statements. GBE-specific debt is debt issued by, or specifically on behalf of, GBEs. GBE-specific debt is included in “Investment in government business enterprises” in the Summary Financial Statements.

³ Public debt is shown net of sinking funds.

2021-22 Mid-Year Report	page 11

Net Debt Update

Net debt is an important measure of the Province’s financial position. Net debt provides a measure of the future revenue that is required to pay for past transactions and events.

Credit rating agencies and other users of public sector financial information typically consider both public debt and net debt in their assessment of a province’s financial condition.

At mid-year, net debt is forecast to be $16.7 billion at March 31, 2022, representing a decrease, or improvement, of $870.6 million from budget. The improvement is primarily due to positive adjustments for the 2020-21 fiscal year-end

actual results and a reduction in forecasted government capital spending for 2021-22, partly offset by a larger forecast deficit, compared to budget.

Net debt as a percentage of GDP is projected to be 19.4 per cent at March 31, 2022, an improvement compared to the budget estimate of 21.7 per cent and is expected to remain one of the lowest ratios among provinces.

  2021-22 NET DEBT UPDATE MID-YEAR

   As at March 31, 2022

(Millions of Dollars)	Budget		Mid-Year Projection		Change From Budget
Deficit		(2,610.9)		(2,708.1)		(97.2)
Acquisition of government service organization capital assets		(1,089.9)		(958.2)		131.7
Amortization of government service organization capital assets		628.1		634.6		6.5
Increase in Net Debt		(3,072.7)		(3,031.7)		41.0
Net debt, beginning of year		(14,512.3)		(13,682.7)		829.6
Net Debt, End of Year		(17,585.0)		(16,714.4)		870.6

PROJECTED NET DEBT AS A PER CENT OF GDP

As at March 31, 2022

Sources: Net Debt. Jurisdictions most recent data (as of November 18, 2021)

GDP: SK: Saskatchewan Ministry of Finance; All others: Conference Board of Canada

2021-22 Mid-Year Report	page 12

U.S.$1,000,000,000

PROVINCE OF

SASKATCHEWAN

(CANADA)

3.25% Bonds due June 8, 2027

PROSPECTUS SUPPLEMENT

CIBC Capital Markets

National Bank of Canada Financial Markets

RBC Capital Markets

TD Securities

BMO Capital Markets

Scotiabank

Barclays

Casgrain

Desjardins Capital Markets

June 1, 2022