Sunday August 31, 2014




Potash slump forces use of rainy day fund

Comments

A drop in potash revenue means the government will dip into the province’s rainy day fund to maintain a balanced budget.

The 2013-14 Third Quarter Financial Report released today shows General Revenue Fund (GRF) revenue is down $144.2 million from budget estimates.  A transfer of $135 million from savings in the Growth and Financial Security Fund (GFSF) is needed to offset the revenue shortfall, resulting in a $7.2 million GRF surplus.

The government is still expecting a surplus in the Summary Financial Statements in excess of $400 million, based on estimates from mid-year.

“The Growth and Financial Security Fund is the province’s rainy day account, “ Finance Minster Ken Krawetz said. “It’s there to buffer the province when extreme, unforeseen events arise, such as the global events affecting the potash price or expenses related to disaster assistance.  “However, we continue to project a healthy surplus on a summary basis.”

Overall, GRF expense is up $48.4 million, or 0.4 per cent compared to budget. This is largely due to higher than forecast expenditures related to disaster assistance, funding for people with disabilities, winter highway maintenance and flood damage reduction measures, as well as higher claims under the Research and Development Tax Credit.

2013 economic growth was projected to be 3.6 per cent at mid-year, up from 2.6 per cent at budget, primarily reflecting a record crop, more people working in the province, higher-than-projected personal income, and higher corporate income, which reflects more business investment.

Following the transfer to the GRF, the GFSF will continue to have a healthy balance of more than $531 million.

“It’s important to remember that government revenues are not necessarily a reflection of the strength of the economy,” Krawetz said.  “Overall, our economy remains very strong.  However, our projections at third quarter underscore the volatility of our resource sectors and reinforce the need for our government to continue to manage spending and meet these fiscal challenges in a prudent and responsible manner, which we have done.”


Comments

Comments


NOTE: To post a comment in the new commenting system you must have an account with at least one of the following services: Disqus, Facebook, Twitter, Yahoo, OpenID. You may then login using your account credentials for that service. If you do not already have an account you may register a new profile with Disqus by first clicking the "Post as" button and then the link: "Don't have one? Register a new profile".

The Yorkton This Week welcomes your opinions and comments. We do not allow personal attacks, offensive language or unsubstantiated allegations. We reserve the right to edit comments for length, style, legality and taste and reproduce them in print, electronic or otherwise. For further information, please contact the editor or publisher, or see our Terms and Conditions.

blog comments powered by Disqus


Quick Vote

Survey results are meant for general information only, and are not based on recognised statistical methods.


Markets





LOG IN



Lost your password?