A Picture of Provincial Debt: Part 4, Saskatchewan
Saskatchewan has been perhaps the most overlooked province in Canada for some time. It’s flat, historically there haven’t been a lot of job opportunities, and unless you were born and raised there, the only reason to visit Saskatchewan was probably just to get either farther East or farther West. But, all of that is changing. And Saskatchewan has the recession to thank for it.
Throughout its history, the citizens of Saskatchewan have felt that their own economic well-being was out of their control, and that outside measures such as federal policy and importing and exporting, largely dictated what their own fiscal situation would be like. That was partially true, and in the past, few resources (albeit an abundance in agricultural resources,) seemed to only make the situation worse. With only agricultural, forestry, and fishing as the large resources in the province, it simply wasn’t enough for them to take hold of their own destiny. It seems like it has been this way forever, but in fact being incorporated only in 1905, Saskatchewan is still a relatively new province to Canada, and this could just be a new province struggling to get on its feet.
At the end of the last century though, things started to turn around for Saskatchewan. In the fiscal year of 2001-2002, the province’s debt only stood at $7,561,899. And while that may seem like a huge number to some, it’s far less than what other provinces are currently holding in debt. And those are provinces with far more resources than Saskatchewan. In addition to this, Saskatchewan has also steadily been paying off its debt since that time. The only real increase came in the 2003-2004 fiscal year, when the debt edged up by about $300,000.
Since that time though, Saskatchewan has been very good at paying off their debt. The next year the province was able to reduce their debt by about $500,000; and the year after, just before the recession in the fiscal year of 2007-2008, Saskatchewan paid off almost $1 million of their debt. From there they’ve been on steady declines – and it’s all been due to the global recession that really hit hard in the 2008-2009 fiscal year.
Up until then, Saskatchewan’s main source of revenue was through taxes – income taxes, sales taxes, gasoline taxes, and corporation income taxes. While agriculture still played a part in the province’s revenue, it was taxes that made up the bulk of the province’s revenue. However, a huge increase in commodity prices during the recession changed that, and started bringing huge revenues to Saskatchewan.
Wheat, canola, and other forms of agriculture still brought in revenues for the province, but new opportunities were also abound. Those came in the form of mining and oil. In fact, in the 2009-2010 revenue, it was projected that $1.9 billion in revenue would come from potash – the pink mineral that’s used to make fertilizer – and that means that $1 out of every $5 Saskatchewan makes comes from potash.
But it’s not just mining that has given a huge boost to Saskatchewan – oil also plays a huge part. That same fiscal year, oil brought in $537 million for the province, yet another huge boon.
As for the debt Saskatchewan currently holds, they also have about $2.3 billion saved in a fund, specifically for paying down their debt. That leaves about $4.1 billion in unfunded debt. And while that may sound like a lot, Saskatchewan’s debt is the second-lowest in the country, falling behind Alberta only. In 2011, the province also received its first-ever “AAA” credit rating from Standard and Poor, the highest rating the agency gives out.
The ten biggest cities in Saskatchewan are:
Later on, we’ll be taking a look at each of these cities, and the debt picture within them.