March 24, 2010 / 8:41 PM / in 8 years

Saskatchewan sees budget surplus, spending cuts

TORONTO (Reuters) - Saskatchewan’s government said on Wednesday it expects to have a small C$20 million ($19.6 million) surplus in the coming fiscal year, but only by dipping into the province’s rainy day fund to offset dropping revenues.

The budget presented by Premier Brad Wall’s Saskatchewan Party assumes revenue of C$9.95 billion for the 2010-11 fiscal year, down C$711 million from a year earlier.

Spending is expected to decline 1.2 percent from a year earlier to C$10.12 billion.

To make up the difference, the government will transfer C$194.2 million from its “Growth and Financial Security Fund”, leaving the reserve fund with a balance of C$510.8 million.

As a result, the province said its outstanding government debt will not rise. The government forecast it will have public debt of C$4.15 billion on March 31, 2011.

The province of one million people is a major producer of the crop nutrient potash, uranium, grain and oil.

The budget assumes a potash price of $307.17 per tonne. Saskatchewan potash sales fell by 63 percent last year to levels not seen since 1971.

“This budget is not about potash. It is about making the right decisions -- balanced, forward-looking, responsible decisions to keep our province on the path of steady, long-term growth,” Finance Minister Rod Gantefoer said in his budget address.

“While other provinces continue to increase spending, we’re reducing our expenditures. Where some governments are laying off hundreds of government workers, we are reducing government primarily through attrition.”

Growth in gross domestic product in the province will reach 2.6 percent this year and 4,100 jobs will be created, according to the budget.

($1=$1.02 Canadian)

Editing by Jeffrey Hodgson

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