Saskatchewan surplus to shrink as potash, oil revenues sag

Tue Nov 27, 2012 12:20pm EST
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* 2012-13 budget surplus estimate cut to C$12.4 mln

* C$95 mln surplus was forecast in government's March budget

* New estimate lowers potash, oil price assumptions

By Rod Nickel

Nov 27 (Reuters) - The Western Canadian province of Saskatchewan stuck with a lowered forecast for its 2012-13 budget surplus on Tuesday due to falling revenues from potash and crude oil production.

Saskatchewan's rich resources of the fertilizer potash and crude oil have helped it mark up stronger economic growth than most of Canada's provinces, swelling the government's coffers and giving it the second-lowest unemployment rate in the country after Alberta.

But the government said falling resource prices this year have cut its revenue, and now it expects to post a C$12.4 million surplus for the 2012-13 fiscal year, just 0.1 percent of its C$11.2 billion ($11.3 billion) budget.

The surplus would continue a nearly two-decade-long string of balanced books, but it is below the C$95 million surplus budgeted for in March, although slightly above an August government projection.

Saskatchewan, the world's biggest potash-producing region with more than 40 percent of global reserves, is home to mines operated by Potash Corp Saskatchewan, Mosaic Co and Agrium Inc.   Continued...