DECEMBER 2019€¦ · 6. Diversified Economy. 6. 2018 GDP BY INDUSTRY. Agriculture, forestry,...
Transcript of DECEMBER 2019€¦ · 6. Diversified Economy. 6. 2018 GDP BY INDUSTRY. Agriculture, forestry,...
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DECEMBER 2019
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The Saskatchewan Difference
Economic Stability
• Diversified economy balanced with natural
resources
• Growing population
• Majority government with strong mandate
Fiscal Responsibility
• Budget 2019-20: Achieved plan to return
to balance
• Targeted infrastructure investments
Financial Flexibility
• 2nd lowest provincial debt in Canada
• Low taxation levels
• Strong credit ratings
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Renewable and Non-Renewable Resources
Uranium
Gold & Base Metals
Potash
Diamonds
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TOP SASKATCHEWAN PRODUCTS 2018
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Diversified Economy
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2018 GDP BY INDUSTRY
Agriculture, forestry, fishing & hunting
9%
Mining and petroleum27%
Manufacturing6%
Construction7%
Transportation, warehousing & utilities7%
Wholesale and retail trade9%
Finance, insurance & real estate
12%
Business services8%
Gov't services5%
Education and healthcare
10%
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Export DrivenHighest proportion of international exports
among provinces
39% of GDP
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Food, Fuel and Fertilizer INTERNATIONAL EXPORTS BY PRODUCT
2018 = $30.8B
Oil and Petroleum
25%
Potash21%
Wheat11%
Canola Seed10%
Processed Canola
(oil/meal)8%
Other Crops9%
Uranium2%
Other 14%
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Export Driven
SASKATCHEWAN EXPORTS TO USA2018 = $16.9B
INTERNATIONAL EXPORT MARKETS2018 = $30.8B
USA, 55%
Other, 16%
Japan, 4%
Brazil, 3%
Mexico, 3%
Indonesia, 2%India, 2%
China, 15%
Oil, 45%
Potash, 18%
Canola, 10%
Line Pipe for Oil and Gas
Pipelines, 3%
Uranium, 3%
Wheat and Oats, 5%
Other, 16%
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Among the lowest personal taxes
in Canada
Competitive business tax environment
Commitment to Low Taxes
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Economic Forecasts 2019-20 Mid-Year
(Per Cent Change Unless Otherwise Noted)
Actual2018 2019 2020 2021
Real GDP 1.3 0.6 1.7 2.6
Nominal GDP 1.4 3.3 2.3 5.0
CPI 2.3 1.7 1.8 1.8
Employment Growth (000 jobs) 2.4 11.5 5.0 5.2
Unemployment Rate (%) 6.2 5.6 5.3 4.9
Retail Sales (0.3) (0.1) 2.3 3.1
SASKATCHEWAN ECONOMIC INDICATORS
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Strong Population Fundamentals
-10,000
-5,000
0
5,000
10,000
15,000
20,000
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Num
ber o
f Peo
ple
Source: Statistics Canada
1999-2008Average (-720)
SASKATCHEWAN POPULATION GROWTH (January 1)
2009-2018 Average (+14,666)
POPULATION GROWTH
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Fiscal Track Record
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
(2.0)
(1.5)
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(0.5)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
1990
-91
1991
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1992
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1993
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1994
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1995
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1996
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1997
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1998
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1999
-00
2000
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2001
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2002
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2003
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2004
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2005
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2006
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2007
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2008
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2009
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2010
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2011
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2012
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2013
-14
2014
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2015
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2016
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2017
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2018
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2019
-20
$ bi
llion
s
Surplus/Deficit (left axis)
Total Revenue (right axis)
Total Expense (right axis)
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Balanced Revenue Sources
2019-20F RevenueTotal = $15.4B
Taxation49%
Resources12%
Net Income from GBEs8%
Other Own Source
14%
Federal Transfers17%
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Non-Renewable Resource Revenues
Forecasting 12% of revenues from
resource royalties32%
18%
11%12%
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
$ bi
llion
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Other Revenues
Resource Revenues
→ Forecast
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Crop Production
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Oil Production
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Potash Production
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Resource Assumptions &Sensitivities
2019-20 Mid-Year
2019 2020 2021
WTI Oil Price (US$/bbl) 56.50 57.00 62.00
Average Well-Head Price (C$ per barrel) 57.98 56.01 61.64
Natural Gas (C$ per GJ) 1.40 1.85 1.95
Potash (C$ per K20 tonne) 507.36 492.49 498.41
Potash (US$ per KCI tonne) 234.25 228.47 232.49
Wheat (C$ per tonne) 245.51 245.79 245.97
Canola (C$ per tonne) 469.58 465.00 482.91
Oil Price (WTI US$/barrel)
Exchange Rate (USD/CAD)
Potash Prices (US$/KCI tonne)
$1
1 cent
$10
$15M
$28M
$54M
SENSITIVITIES TO BUDGET ASSUMPTIONS
Change Net Impact
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Targeted Infrastructure Investments 2019-20
Saskatchewan Builds Capital Plan = $1.1B
Crown Corporation InfrastructureInvestments = $1.6B
Total Infrastructure Investment= $2.7B
SaskPower = $883M
SaskTel = $298M
SaskEnergy = $268M
SaskWater = $34M
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Saskatchewan’s Climate Change Strategy
Targeting 50% renewable power sources by 2030
Carbon Capture
Industry Emission Targets
Zero-till farming practices
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Debt Management Program CPP
4%
MTNs7%
Promissory Notes11%
Public (CAD)72%
Public (USD)6%
DEBT OUTSTANDING
CAD Focused
Long Maturity Profile (+18 years)
Sinking Fund
Modest Near-Term Maturities
$4.0B Short-Term Borrowing Capacity
Forecast as at March 31, 2020
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Manageable Debt
One of the lowest net debt-to-GDP ratios among provinces
MANAGEABLE DEBT
($M)
Budget2019-20
Mid-YearProjection
General Revenue Fund
- Operating 6,150.0 6,150.0
- SaskBuilds Capital Plan 5,404.0 5,404.0
Other GSO Debt 380.1 404.7
GSO Debt 11,934.1 11,958.7
Crown Corporation Debt 9,757.8 9,431.1
Public Debt 21,691.9 21,389.8
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2019-20 Borrowing Program (CAD)
BORROWING SOURCES
(millions of dollars)Actual
2018-19Budget
2019-20Mid-Year
Projection
Canadian Debentures 2,750.0 1,950.0 1,900.0 Promissory Notes 391.0 210.8 203.7 Canada Pension Plan 18.0 103.9 70.0 Total 3,159.0 2,264.7 2,173.7
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Credit Ratings
RATING AGENCYCURRENT RATING
LONG-TERMCURRENT RATING
SHORT-TERM
MOODY’S Aaa Not Rated
STANDARD & POOR’S AA A-1+
FITCH AA F1+
DBRS AA R-1 (high)
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Province of Saskatchewan
CONTACT INFORMATION:Rod BalkwillExecutive Director1 (306) [email protected]
saskatchewan.ca 26
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APPENDIX
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Manageable Debt
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Term Debt Outstanding
Forecast as at March 31, 2020
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Crude Oil Production
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Oil & Gas Pools
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Saskatchewan Builds Capital Plan
1,361
927
1,174
612 780 823
954
1,154
1,757
1,552
1,172 1,123 1,042 982 958
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2008-09 2010-11 2012-13 2014-15 2016-17 2018-19Forecast
2019-20Budget
2021-22Target
SASKATCHEWAN BUILDS CAPITAL PLAN($ Millions)