EX-99.I 2 publicaccounts.htm PUBLIC ACCOUNTS 2006-07 VOLUME 1

Public Accounts

2006-07

Volume 1

Main Financial Statements







                                                                      


Saskatchewan


2006-07 Public Accounts
 Volume 1 — Main Financial Statements

Contents

3   Letters of Transmittal
4   Introduction to the Public Accounts
 
General Revenue Fund Financial Statements

9   Statement of Responsibility
11   Auditor’s Report
13   Financial Statements
17   Notes to the Financial Statements
25   Schedules to the Financial Statements
 
Summary Financial Statements

39   Statement of Responsibility
41   Auditor’s Report
43   Summary Financial Statements
47   Notes to the Summary Financial Statements
58   Schedules to the Summary Financial Statements
 
Supplementary Information

81   Fiscal Stabilization Fund — Schedule of Transfers and Accumulated Balance
82   Saskatchewan Infrastructure Fund — Schedule of Transfers and Accumulated Balance
83   General Revenue Fund — Public Issue Debentures
88   General Revenue Fund — Debentures Issued to the Minister of Finance of Canada
89   Glossary of Terms










Letters of Transmittal

Regina, Saskatchewan
June 2007

To His Honour
The Honourable Gordon Barnhart
Lieutenant Governor of the Province of Saskatchewan

Your Honour:

I have the honour to submit the main financial statements of the Government of the Province of Saskatchewan for the fiscal year ended March 31, 2007.

Respectfully submitted,

/s/ Pat Atkinson

Pat Atkinson
Minister of Finance

Regina, Saskatchewan
June 2007

The Honourable Pat Atkinson
Minister of Finance

We have the honour of presenting the main financial statements of the Government of the Province of Saskatchewan for the fiscal year ended March 31, 2007.

Respectfully submitted,

/s/ Doug Matthies

 /s/ Terry Paton

Doug Matthies
Deputy Minister of Finance		 Terry Paton
Provincial Comptroller


Government of Saskatchewan - 2006-07 Public Accounts 3

Introduction to the Public Accounts

Public Accounts Content

The 2006-07 Public Accounts of the Government of Saskatchewan are prepared in accordance with the Financial Administration Act, 1993 and consist of two volumes.

Volume 1 contains the General Revenue Fund Financial Statements and the Summary Financial Statements. These are the main financial statements of the Government of Saskatchewan.

The General Revenue Fund (GRF) Financial Statements account for the financial transactions of the GRF and the Province of Saskatchewan Sinking Funds. The GRF is the level at which the annual provincial budget estimates are prepared. All public money is paid into the GRF except where the Legislative Assembly has directed otherwise. The GRF is available for appropriation for the public services of Saskatchewan.

The Summary Financial Statements consolidate the financial transactions of the GRF, Crown corporations, agencies, boards and commissions. These consolidated statements provide a full accounting of the financial affairs and resources of all entities controlled by the Government.

Volume 1 also contains unaudited supplementary information on the Fiscal Stabilization Fund and the Saskatchewan Infrastructure Fund. The Fiscal Stabilization Fund was established April 1, 2000 to stabilize the fiscal position of the Government from year to year and to facilitate the accomplishment of long-term objectives. The Saskatchewan Infrastructure Fund was established December 6, 2006 to provide moneys that may be used to support the provision and maintenance of infrastructure in Saskatchewan. This volume also includes unaudited information on the GRF public issue debentures and GRF debentures issued to the Minister of Finance of Canada. In addition, this volume includes a glossary of terms used throughout.

Volume 2 contains details on the revenue and expense of the GRF. It also provides details on capital asset acquisitions of the GRF; a listing of suppliers who received $50,000 or more for goods and services and capital assets supplied to the GRF and Revolving Funds during the fiscal year; financial information on the assets, liabilities and residual balances of pension plans and trust funds administered by the Government; and a listing of remissions of taxes and fees.

The Public Accounts are available on the Internet at: http://www.gov.sk.ca/finance/paccts

A Compendium is also available on the Internet at: http://www.gov.sk.ca/finance/paccts that contains the financial statements of various government agencies, boards, commissions, pension plans, special purpose funds and institutions, as well as Crown corporations which are accountable to Treasury Board.

4 Government of Saskatchewan - 2006-07 Public Accounts

Introduction to the Public Accounts

Government of Saskatchewan - 2006-07 Public Accounts 5



































General Revenue Fund Financial Statements




































General Revenue Fund

Responsibility for the General Revenue Fund Financial Statements

The Government is responsible for the General Revenue Fund Financial Statements. The Government maintains a system of accounting and administrative controls to ensure that accurate and reliable financial statements are prepared and to obtain reasonable assurance that transactions are authorized, assets are safeguarded, and financial records are maintained.

The Provincial Comptroller prepares these statements in accordance with the Government’s stated accounting policies and using the Government’s best estimates and judgement when appropriate.

The Provincial Auditor expresses an independent opinion on these statements. His report, which appears on the following page, provides the scope of his audit and states his opinion.

Treasury Board approves the General Revenue Fund Financial Statements. The statements are tabled in the Legislative Assembly as part of the Public Accounts and referred to the Standing Committee on Public Accounts for review.

On behalf of the Government of the Province of Saskatchewan.

/s/ Pat Atkinson

Pat Atkinson
Minister of Finance


/s/ Doug Matthies

Doug Matthies
Deputy Minister of Finance


/s/ Terry Paton

Terry Paton
Provincial Comptroller

Regina, Saskatchewan
June 2007

Government of Saskatchewan - 2006-07 Public Accounts 9

























General Revenue Fund



Auditor’s Report

To the Members of the Legislative Assembly of Saskatchewan

These financial statements report transactions and events of the General Revenue Fund only. Significant financial activities of the Government occur outside this Fund. Readers should not use the General Revenue Fund’s financial statements to understand and assess the Government’s management of public financial affairs and resources as a whole; rather they should use the Summary Financial Statements of the Government of Saskatchewan (Summary Financial Statements).

Volume 1 of the Public Accounts includes the Summary Financial Statements. These statements report the full nature and extent of the financial affairs and resources for which the Government is responsible.

I have audited the statement of financial position of the General Revenue Fund as at March 31, 2007 and the statements of operations, accumulated deficit, change in net debt, and cash flow for the year then ended. These financial statements are the responsibility of Treasury Board. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

1. The Government through the General Revenue Fund is responsible for the liabilities of several pension plans. Notes 1 and 4 state that the pension liabilities are not recorded in these financial statements. Canadian generally accepted accounting principles for the public sector require that the pension liabilities be recorded in the financial statements. Had pension liabilities been recorded, liabilities and accumulated deficit would increase by $4,659 million (2006 — $4,246 million) as at March 31, 2007 and, for the year, expenses would increase by $413 million (2006 — $103 million), and surplus would decrease by the same amounts.

2. The Government records transactions between the General Revenue Fund and the Fiscal Stabilization Fund and Saskatchewan Infrastructure Fund as revenue or expense of the General Revenue Fund. The substance of the transactions between the General Revenue Fund and these Funds is that the amounts that the General Revenue Fund owes to or has paid to these Funds must be repaid by these Funds to the General Revenue Fund. Canadian generally accepted accounting principles for the public sector do not allow the General Revenue Fund to record changes in the amounts due or paid to these Funds as revenue or expense of the General Revenue Fund.

  The financial statements show an expense (as transfer to Saskatchewan Infrastructure Fund) of $105 million (2006 — $139 million as transfer to Fiscal Stabilization Fund) for the year and a liability (as deposits held) of $0 million (2006 — $888 million) as at March 31, 2007. It is not appropriate to record an expense

Government of Saskatchewan - 2006-07 Public Accounts 11

General Revenue Fund

  because these Funds must return all amounts to the General Revenue Fund. Instead of recording an expense, the financial statements should record an asset equal to the amount it owed or paid to these Funds. Had the Government properly recorded these transactions, financial assets would increase by $993 million (2006 — $888 million) and accumulated deficit would decrease by the same amount as at March 31, 2007 and, for the year, transfer to the Saskatchewan Infrastructure Fund would decrease by $105 million (2006 — $0), transfer to the Fiscal Stabilization Fund would decrease by $0 (2006 — $139 million), and surplus would increase by $105 million.

In my opinion, except for the effects of not recording pension liabilities and recording the amounts that the General Revenue Fund has paid to the Fiscal Stabilization Fund and the Saskatchewan Infrastructure Fund as revenue or expense of the General Revenue Fund as described in the preceding paragraphs, these financial statements present fairly, in all material respects, the financial position of the General Revenue Fund as at March 31, 2007 and the results of its operations, the changes in its net debt and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

/s/ Fred Wendel

Fred Wendel, CMA, CA
Provincial Auditor

Regina, Saskatchewan
June 8, 2007







12 Government of Saskatchewan - 2006-07 Public Accounts

General Revenue Fund

Statement of Financial Position
 As at March 31, 2007
(thousands of dollars)

2007


 2006
Financial Assets                
Cash and temporary investments       414,469     1,027,206  
Accounts receivable (schedule 1)       700,198     629,062  
Agricultural land held for resale (note 2)       103,447     105,343  
Deferred charges       22,335     39,382  
Loans to Crown corporations (schedule 2)       3,557,068     3,630,985  
Other loans (schedule 3)       129,767     132,192  
Equity investment in Crown Investments Corporation of Saskatchewan       1,181,152     1,181,152  
Total Financial Assets       6,108,436     6,745,322  
                 
Liabilities                
Accounts payable and accrued liabilities (schedule 4)       1,384,259     1,339,590  
Deposits held (schedule 5)       310,893     1,161,000  
Unearned revenue       69,520     69,298  
Public Debt (note 3)(schedule 6)       10,802,006     10,828,208  
Unamortized foreign exchange loss       (12,573 )   (16,828 )
Total Liabilities       12,554,105     13,381,268  
Net Debt       (6,445,669 )   (6,635,946 )
                 
Non-financial Assets                
Prepaid expenses       6,299     6,102  
Inventories held for consumption       74,626     66,784  
Tangible capital assets (schedule 9)       2,363,518     2,240,259  
Total Non-financial Assets       2,444,443     2,313,145  
Accumulated Deficit       (4,001,226 )   (4,322,801 )
Retirement benefits (note 4)    
Contingencies (note 5)    
Contractual obligations (note 6)    
Guaranteed debt (note 5)(schedule 8)    

The accompanying notes and schedules are an integral part of these financial statements.

Government of Saskatchewan - 2006-07 Public Accounts 13

General Revenue Fund

Statement of Operations
 For the Year Ended March 31, 2007
(thousands of dollars)

2007
 2006
Budget

 Actual

 Actual
Revenue                      
Taxation       4,010,900     4,484,545     4,115,818  
Non-renewable resources       1,511,800     1,694,252     1,721,099  
Transfers from Government entities       536,600     587,096     613,887  
Other own-source revenue       344,300     488,324     501,383  
Transfers from the federal government       1,323,600     1,388,829     1,265,365  
Total Revenue (schedule 10)       7,727,200     8,643,046     8,217,552  
                       
Operating Expense                      
Executive Branch of Government                      
Advanced Education and Employment       603,936     689,414     --  
Agriculture and Food       264,936     369,995     422,390  
Community Resources       602,415     711,193     630,819  
Corrections and Public Safety       129,612     163,078     140,205  
Culture, Youth and Recreation       50,340     67,004     62,662  
Environment       179,739     194,151     146,030  
Executive Council       8,909     9,311     8,569  
Finance       259,862     258,964     247,447  
First Nations and Metis Relations       51,095     59,842     48,314  
Government Relations       199,407     207,534     198,236  
Health       3,178,583     3,202,965     2,990,625  
Highways and Transportation       288,930     307,310     263,938  
Highways and Transportation - commercial operations (schedule 11)       --     4,198     5,715  
Industry and Resources       91,493     67,862     62,395  
Information Technology Office       5,508     6,812     4,853  
Information Technology Office - commercial operations (schedule 11)       --     89     --  
Justice       231,945     237,622     217,415  
Labour       15,680     15,369     14,751  
Learning       906,219     978,090     1,472,946  
Northern Affairs       5,716     5,351     5,184  
Property Management       9,942     13,993     (765 )
Property Management - commercial operations (schedule 11)       --     63,248     58,384  
Public Service Commission       14,443     15,868     8,908  
Regional Economic and Co-operative Development       11,151     11,361     8,142  
Saskatchewan Research Council       8,446     8,446     12,390  
SaskEnergy Incorporated       --     7,000     74,700  
Legislative Branch of Government                      
Chief Electoral Officer       807     1,281     809  
Children's Advocate       1,295     1,298     1,195  
Conflict of Interest Commissioner       138     128     114  
Information and Privacy Commissioner       599     599     487  
Legislative Assembly       20,267     19,740     18,987  
Ombudsman       1,816     1,779     1,643  
Provincial Auditor       6,063     6,054     5,932  
Total Operating Expense (schedules 12 and 13)       7,149,292     7,706,949     7,133,420  
Operating Surplus       577,908     936,097     1,084,132  
Servicing Government Debt (schedule 14)       (551,000 )   (538,303 )   (544,666 )
Pre-transfer Surplus       26,908     397,794     539,466  
Transfer (to) from the Fiscal Stabilization Fund       75,000     --     (139,000 )
Transfer to the Saskatchewan Infrastructure Fund       --     (105,090 )   --  
Surplus       101,908     292,704     400,466  
The accompanying notes and schedules are an integral part of these financial statements.
14 Government of Saskatchewan - 2006-07 Public Accounts

General Revenue Fund

Statement of Accumulated Deficit
 For the Year Ended March 31, 2007
(thousands of dollars)

2007
 2006
Budget


 Actual


 Actual
Accumulated deficit, beginning of year       (4,322,801 )   (4,322,801 )   (5,047,210 )
Adjustment to accumulated deficit (note 10)       --     28,871     323,943  
Surplus       101,908     292,704     400,466  
Accumulated Deficit, End of Year       (4,220,893 )   (4,001,226 )   (4,322,801 )

Statement of Change in Net Debt
 For the Year Ended March 31, 2007
(thousands of dollars)

2007
 2006
Budget


 Actual


 Actual
Surplus       101,908     292,704     400,466  
                       
Tangible Capital Assets                      
Acquisitions (schedule 9)       (241,001 )   (249,510 )   (221,278 )
Amortization (schedule 9)       143,896     141,657     134,530  
Net loss (gain) on disposal       --     12,722     (391 )
Proceeds on disposal       --     1,569     3,243  
Write downs (schedule 9)       --     82     2,927  
Net Acquisition of Tangible Capital Assets       (97,105 )   (93,480 )   (80,969 )
                       
Other Non-financial Assets                      
Net (acquisition) use of prepaid expenses       --     (197 )   337  
Net acquisition of inventories held for consumption       --     (7,842 )   (5,862 )
Net Acquisition of Other Non-financial Assets       --     (8,039 )   (5,525 )
                       
Decrease in net debt       4,803     191,185     313,972  
Net debt, beginning of year       (6,635,946 )   (6,635,946 )   (6,880,388 )
Transfers from government organizations       --     (908 )   (69,530 )
Net Debt, End of Year       (6,631,143 )   (6,445,669 )   (6,635,946 )
The accompanying notes and schedules are an integral part of these financial statements.  
Government of Saskatchewan - 2006-07 Public Accounts 15

General Revenue Fund

Statement of Cash Flow
 For the Year Ended March 31, 2007
(thousands of dollars)

2007


 2006
Operating Activities                
Surplus       292,704     400,466  
Non-cash items included in surplus (schedule 15)       111,308     75,973  
Net change in non-cash operating activities (schedule 16)       (17,237 )   6,067  
Adjustment to accumulated deficit       --     10,513  
Cash Provided by Operating Activities       386,775     493,019  
           
Capital Activities                
Acquisition of tangible capital assets (schedule 9)       (249,510 )   (221,278 )
Proceeds on disposal of tangible capital assets       1,569     3,243  
Cash Used for Capital Activities       (247,941 )   (218,035 )
           
Investing Activities                
Loan Advances       (204,144 )   (432,305 )
Loan Repayments       236,019     364,669  
Sinking fund contributions received from Crown corporations       32,411     69,045  
Contributions made to sinking funds       (95,132 )   (135,070 )
Government debt redemption funded from sinking funds       --     30,912  
Other       1,489     892  
Cash Used for Investing Activities (schedule 17)       (29,357 )   (101,857 )
           
Financing Activities                
Proceeds from public debt       1,421,164     829,511  
Repayment of public debt       (1,293,271 )   (1,014,404 )
(Decrease) increase in deposits held       (850,107 )   179,385  
Cash Used for Financing Activities       (722,214 )   (5,508 )
           
(Decrease) increase in Cash and Temporary Investments       (612,737 )   167,619  
Cash and temporary investments, beginning of year       1,027,206     859,587  
Cash and Temporary Investments, End of Year       414,469     1,027,206  
The accompanying notes and schedules are an integral part of these financial statements.
16 Government of Saskatchewan - 2006-07 Public Accounts

General Revenue Fund

Notes to the Financial Statements
 As at March 31, 2007

1. Significant Accounting Policies

a) Basis of accounting

These financial statements are prepared in accordance with the generally accepted accounting principles for the public sector as recommended by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants, with the following exceptions:

• transfers to and from the Fiscal Stabilization Fund and the Saskatchewan Infrastructure Fund are included in the determination of surplus for the year; and
• pension liabilities are not recorded in the financial statements. The General Revenue Fund accounts for defined benefit pension obligations on a cash basis.

The significant accounting policies are summarized below.

b) Reporting entity

The General Revenue Fund is the general fund which receives all revenues unless otherwise specified by law. Spending from the General Revenue Fund is appropriated by the Legislative Assembly.

Other government entities such as special purpose funds, Crown corporations, and other agencies, report separately in other financial statements. Only financial transactions to or from these other entities are included in the General Revenue Fund. The net expenses/recoveries for revolving funds’ operations are charged to expense.

The Government’s Summary financial statements which include the financial activities of the General Revenue Fund and other government entities are provided separately.

c) Specific accounting policies

Financial assets

Financial assets are those assets on hand at the end of an accounting period which could provide resources to discharge existing liabilities or finance future operations and are not for consumption in the normal course of operations.

Temporary investments are generally for less than 30 days and are recorded at the lower of cost or market.

Agricultural land held for resale is valued at the lower of cost or net realizable value, on an aggregate basis.

Deferred charges include issue costs and net discounts or premiums incurred on the issue of long-term Government debt. They are recorded at cost and amortized on a straight-line basis over the remaining life of the debt issue.

Loans to Crown corporations and Other loans generally have fixed repayment terms and are interest bearing. Short-term loans to Crown corporations are recorded at par; all other loans are recorded at cost. Interest received on these loans is netted against interest paid on money borrowed for these loans.

Equity investment in Crown Investments Corporation of Saskatchewan is an advance to the corporation to form its equity capitalization and is recorded at cost.

Where there has been a loss in value that is other than a temporary decline, loans and equity investments are written down to recognize the loss.

Liabilities

Liabilities are present obligations to outside organizations and individuals as a result of transactions and events occurring prior to year-end, which will be satisfied in the future through the transfer or use of assets or another form of economic settlement. They consist of obligations to provide authorized transfers where any eligibility criteria have been met, to repay borrowings, to pay for goods and services acquired prior to year-end, and to deliver goods or services in the future, where payment has been received.

Unearned revenue consists mainly of revenue for Crown mineral leases and motor vehicle fees that will be earned in a subsequent fiscal year.

Public Debt includes Government debt and Crown Corporation debt, and is recorded at par.

Government of Saskatchewan - 2006-07 Public Accounts 17

General Revenue Fund

Notes to the Financial Statements

1. Significant Accounting Policies (continued)

Premiums, discounts, and issue costs incurred on Government debt are recorded as deferred charges and amortized on a straight-line basis over the remaining life of the debt issue.

Certain debenture issues require contributions to a sinking fund. These obligations are recorded at principal less sinking fund balances where applicable. The General Revenue Fund is reimbursed by Crown corporations for all sinking fund contributions made on debt incurred on their behalf. Premiums and discounts on long-term investments within the sinking fund are amortized on a constant yield basis.

Debt issues and sinking fund investments held in foreign currencies are converted to the Canadian dollar equivalent at the exchange rate in effect at March 31.

Interest, discounts, premiums and commissions on money borrowed for Crown corporations and others are netted against reimbursements by these entities.

Unamortized foreign exchange loss includes unrealized foreign exchange gains and losses resulting from conversion of Government debt and sinking fund investments, held in a foreign currency, to the Canadian dollar equivalent at March 31. Unrealized foreign exchange gains and losses are amortized on a straight-line basis over the remaining life of the debt issue. Realized foreign exchange gains or losses, resulting from Government debt transactions, are included in servicing Government debt.

Guaranteed debt includes guarantees by the Minister of Finance, made through specific agreements or legislation, to pay all or part of the principal and/or interest of debt obligations in the event of default by the borrower. Loss provisions on guaranteed debt are recorded as a liability and an expense when it is likely that a loss will occur. The amount of the loss provision represents the best estimate of future payments less recoveries and is adjusted as necessary to ensure it equals the expected payout of the guarantee.

Non-financial assets

Non-financial assets are acquired, constructed or developed assets that do not normally provide resources to discharge existing liabilities, but instead are normally employed to deliver government services, may be consumed in the normal course of operations and are not for sale in the normal course of operations.

Inventories held for consumption are recorded at cost and expensed as they are consumed.

Tangible capital assets are recorded at cost and include all amounts directly attributable to the acquisition, construction, development or betterment, except interest. Tangible capital assets are generally amortized on a straight-line basis over the estimated useful life of each asset.

Revenue

Revenues are recorded on the accrual basis except for corporate and personal income taxes which are recorded when received from the federal government. Government transfers are recognized as revenue in the period during which the transfer is authorized and any eligibility criteria are met.

Expense

Expenses are recorded on the accrual basis, except for defined benefit pension plan costs which are recorded on the cash basis. Government transfers are recognized as expenses in the period during which the transfer is authorized and any eligibility criteria are met.

d) Measurement Uncertainty

Measurement uncertainty is uncertainty in the determination of the amount at which an item is recognized or disclosed in financial statements. Such uncertainty exists when there is a variance between the recognized or disclosed amount and another reasonably possible amount.

Measurement uncertainty that may be material to these financial statements exists in the accrual of non-renewable resource royalties, and the federal government’s Canada Health Transfer and Canada Social Transfer payments. The uncertainty arises from factors such as price and production sensitivities in the royalty structures, and the effect on transfers from the federal government of changes in economic and demographic conditions in the Province and the country. Measurement uncertainty also exists in the disclosure of liabilities for defined benefit pension plans because actual experience may differ from actuarial estimations.

18 Government of Saskatchewan - 2006-07 Public Accounts

General Revenue Fund

Notes to the Financial Statements

1. Significant Accounting Policies (continued)

While best estimates are used to report items, it is reasonably possible that changes in future conditions, occurring within one fiscal year, could require a material change in the amounts recognized or disclosed.

2. Agricultural Land Held for Resale

The estimated net realizable value of the agricultural land held for resale at March 31, 2007 is $207.1 million (2006 — $205.6 million).

3. Risk Management of Public Debt

Funds are borrowed in both domestic and foreign capital markets by issuing Province of Saskatchewan securities. This borrowing activity finances Government operations and the activities of Crown corporations. These transactions result in exposure to four types of risk: interest rate risk, foreign exchange rate risk, credit risk and liquidity risk.

To manage these risks, a preference for fixed rate Canadian dollar denominated debt is maintained. Where market conditions dictate that other forms of debt are more attractive, opportunities are identified to use derivative financial instruments to reduce these risks. A derivative financial instrument is a contract whose value is based on the value of another asset or index.

Interest rate risk is the risk that debt servicing costs will increase due to changes in interest rates. This risk is managed by issuing debt securities at predominantly fixed rates of interest rather than at floating rates of interest. Floating rate debt is defined as the sum of floating rate debentures, short-term promissory notes, fixed rate debt maturing within one year and Saskatchewan Savings Bonds. Opportunities are sought to effectively convert floating rate debt into fixed rate debt through the use of interest rate swaps. Interest rate swaps on a notional value of $66.0 million of debt (2006 — $306.0 million) existed at March 31, 2007. At March 31, 2007, 88.5 per cent (2006 — 85.6 per cent) of the gross debt effectively carried a fixed rate of interest.

Gross debt includes floating rate debt of $1,382.4 million (2006 — $1,714.1 million). A one percentage point increase in interest rates would decrease the surplus by $8.4 million in 2007-08.

Foreign exchange rate risk is the risk that debt servicing costs will increase due to a decline in the value of the Canadian dollar relative to other currencies. This risk is managed by maintaining a preference for issuing debt that is denominated in Canadian dollars. Where debt has been issued in foreign currencies, opportunities are sought to effectively convert it into Canadian dollar debt through the use of a cross currency swap. At March 31, 2007, 97.2 per cent (2006 — 97.3 per cent) of the gross debt was effectively denominated in Canadian dollars.

The following foreign-denominated items have been hedged to Canadian dollars using cross currency swaps:

• debentures totalling 300.0 million Swiss francs (2006 -200.0 million) fully hedged to $274.7 million Canadian (2006 — $182.4 million);
• debentures totalling 1,419.0 million U.S. dollars (2006 — 1,419.0 million) fully hedged to $1,882.3 million Canadian (2006 — $1,882.3 million); and
• interest payments on debentures of 275.0 million U.S. dollars (2006 — 275.0 million) hedged to Canadian dollars at an exchange rate of 1.2325 (2006 — 1.2325).

In total, cross currency swaps on a notional value of $2,770.1 million of debt (2006 — $2,713.3 million) existed at March 31, 2007. The effectiveness of these hedges is assessed on an ongoing basis by monitoring the credit ratings of the counterparties to the hedges.

Credit risk is the risk that a loss may occur from the failure of another party to meet its obligations under a derivative financial instrument contract. This risk is managed by dealing only with counterparties with good credit ratings and by establishing limits on individual counterparty exposures and monitoring those exposures on a regular basis. At March 31, 2007, 100 per cent (2006 — 100 per cent) of counterparties held a credit rating of A or higher, as defined by Standard and Poor’s.

Liquidity risk is a risk that financial commitments will not be met over the short-term. This risk is managed by distributing debt maturities over many years, maintaining sinking funds on long-term debt issues and maintaining adequate cash reserves and short-term borrowing programs as contingent sources of liquidity.

Government of Saskatchewan - 2006-07 Public Accounts 19

General Revenue Fund

Notes to the Financial Statements

4. Retirement Benefits

The Government sponsors several defined benefit pension plans and a defined contribution pension plan.

Pension fund assets of government sponsored defined benefit and defined contribution pension plans are invested in fixed income securities, equities, real estate and short-term monetary items. The investment in Government of Saskatchewan securities is insignificant for all plans.

Defined benefit plans

Defined benefit plans provide benefits based on length of service and pensionable earnings. A typical defined benefit plan provides pensions equal to 2.0 per cent of a member’s average five years highest salary, multiplied by the years of service to a maximum of 35 years. Members contribute a percentage of salary, which may vary based on age, to their plan. Pensions and contribution rates are integrated with the Canada Pension Plan.

The two main plans are the Teachers’ Superannuation Plan (TSP) and the Public Service Superannuation Plan (PSSP). Other plans include Judges of the Provincial Court Superannuation Plan (Judges), Saskatchewan Transportation Company Employees Superannuation Plan (STC), Anti-TB League Employees Superannuation Plan (ATB) and the Saskatchewan Pension Annuity Fund, an annuity underwriting operation. Obligations for allowances payable to members of the former Members of the Legislative Assembly Superannuation Fund (MLA) are part of the General Revenue Fund.

Actuarial valuations are performed at least triennially. These valuations are extrapolated by an actuary when a valuation is not done in the current fiscal year. Valuations are based on a number of assumptions about future events, such as inflation rates, interest rates, wage and salary increases and employee turnover and mortality. These assumptions reflect estimates of expected long-term rates and short-term forecasts. Estimates vary based on the individual plan.

The accrued benefit obligation is determined using the projected benefit method prorated on services. Pension fund assets are valued at market related values based on actual market values averaged over a four year period. In the periods between valuations, the actuary estimates the market related value of pension fund assets using expected long-term rates of return for the individual plans.

The Government is required to match member current service contributions for all plans except Judges and the PSSP. Separate pension funds are maintained for all plans except the PSSP and the MLA. The PSSP member contributions are deposited into the General Revenue Fund. All pension obligations arising under the PSSP and the MLA are paid from the General Revenue Fund.

Information on the defined benefit plans follows:

2007
 2006
TSP

 PSSP

 Others

 Total

 Total
Plan status       closed     closed     closed  1   n/a     n/a  
Member contribution rate (percentage of salary)       7.85     7.00-9.00  2   5.00-9.00  2   n/a     n/a  
Number of active members       3,124     1,312     63     4,499     5,055  
Average age of active members (years)       53.2     54.9     57.0     53.8     53.5  
Number of former members entitled to deferred                                  
  pension benefits       4,965     119     11     5,095     5,359  
Number of superannuates and surviving spouses       10,640     5,717     2,372     18,729     18,635  
Actuarial valuation date       June 30/05     Dec. 31/05     Various     n/a     n/a  
Long-term assumptions used                                  
  Rate of compensation increase (percentage)       3.50     3.50     3.50     n/a     n/a  
  Expected rate of return on plan assets (percentage)       6.75     5.00     5.00-6.00     n/a     n/a  
  Discount rate (percentage)       5.00     5.00     5.00     n/a     n/a  
  Inflation rate (percentage)       2.50     2.50     2.50     n/a     n/a  
  Expected average remaining service life (years)       4.7     3.9     Various     n/a     n/a  
Post-retirement index (percentage of annual increase in                                  
    Consumer Price Index)       80     70     Various     n/a     n/a  
1  Judges is open to new membership; all other plans are closed.                              
2  Contribution rate varies based on age upon joining the plan.                                  
20 Government of Saskatchewan - 2006-07 Public Accounts

General Revenue Fund

Notes to the Financial Statements

4. Retirement Benefits (continued)

Based on the latest actuarial valuations, extrapolated to March 31, 2007, the present value of accrued pension benefits and the market related value of pension fund assets are shown in the table below:

(thousands of dollars) 2007
 2006
TSP 1

 PSSP

 Others

 Total

 Total
Accrued benefit obligation,                                  
  beginning of year       4,825,284     1,763,072     288,784     6,877,140     6,060,417  
Current benefit cost       57,101     20,360     4,428     81,889     73,663  
Plan amendment 2       --     90,000     433     90,433     --  
Interest cost       263,817     90,349     15,838     370,004     382,590  
Actuarial (gains) losses       --     (3,581 )   986     (2,595 )   742,256  
Benefit payments       (285,642 )   (105,376 )   (15,427 )   (406,445 )   (381,786 )
Accrued Benefit Obligation, End of Year       4,860,560     1,854,824     295,042     7,010,426     6,877,140  
Plan assets, beginning of year       1,460,911     --     184,748     1,645,659     1,742,130  
Return on plan assets       97,303     --     12,816     110,119     122,044  
Employer contributions       115,477     100,054     5,061     220,592     196,376  
Employee contributions       15,696     5,322     438     21,456     22,504  
Plan expenses       (3,905 )   --     (597 )   (4,502 )   (7,255 )
Actuarial gains (losses)       --     --     718     718     (48,354 )
Benefit payments       (285,642 )   (105,376 )   (15,427 )   (406,445 )   (381,786 )
Plan Assets, End of Year 3       1,399,840     --     187,757     1,587,597     1,645,659  
        3,460,720     1,854,824     107,285     5,422,829     5,231,481  
Unamortized estimation adjustments 4       (616,163 )   (135,372 )   (12,050 )   (763,585 )   (985,886 )
Total Pension Liabilities 5       2,844,557     1,719,452     95,235     4,659,244     4,245,595  
1 The TSP accrued benefit obligation includes a liability of $32.0 million (2006 — $35.9 million) relating to the TSP disability provision. The TSP’s actual rate of return on plan assets was 13.3 per cent (2006 — 16.0 per cent).
2 During the year, the Government approved a plan amendment to provide guaranteed indexing of pensions for members of the PSSP, Judges, STC, ATB, and MLA at 70 per cent of the annual change in the Consumer Price Index. Previously, the Government provided ad hoc indexing to members of these plans.
3 At March 31, 2007, the market value of plan investments was $1,994.4 million (2006 — $1,935.9 million). Of this amount 44.0 per cent (2006 — 43.2 per cent) was invested in fixed income securities and 45.2 per cent (2006 — 49.1 per cent) in equity investments.
4 Amortized against the net obligation over periods ranging from 1 to 13 years, which is the expected average remaining service life of active plan members at the time the estimation adjustments arose.
5 Changes in assumptions can result in significantly higher or lower estimates of pension liabilities. A one per cent decrease in the discount rate would result in a $610.3 million and $231.9 million increase in the pension liabilities for the TSP and the PSSP respectively, and a one per cent increase would result in a $500.2 million and $191.0 million decrease in the pension liabilities for the TSP and the PSSP respectively.

Defined contribution plans

Defined contribution plans provide pensions based on accumulated contributions and investment earnings. Employees contribute a percentage of salary.

The Government sponsors the Public Employees Pension Plan (PEPP), a multi-employer defined contribution plan. Employers are required to provide contributions at specific rates for employee current service. The General Revenue Fund has fully funded its share of contributions. The General Revenue Fund also contributes to the Saskatchewan Teachers’ Retirement Plan (STRP), sponsored by the Saskatchewan Teachers’ Federation.

Government of Saskatchewan - 2006-07 Public Accounts 21

General Revenue Fund

Notes to the Financial Statements

4. Retirement Benefits (continued)

Information on the defined contribution plans to which the General Revenue Fund contributes follows:

2007
 2006
PEPP

 STRP 1

 Total

 Total
Plan status       open     n/a     n/a     n/a  
Member contribution rate (percentage of salary)       5.00-7.00  2   n/a     n/a     n/a  
Government contribution rate (percentage of salary)       6.45-7.00  2   n/a     n/a     n/a  
Number of active members, all employers       30,378     n/a     30,378     30,536  
General Revenue Fund participation                            
  Number of active members       15,594     n/a     15,594     16,321  
  Member contributions (thousands of dollars)       40,347     n/a     40,347     37,320  
  Government contributions (thousands of dollars)       37,553     38,235     75,788     72,957  
1 The STRP is a contributory defined benefit pension plan. The Government contributes an amount which is set through provincial negotiations.
2 Contribution rate varies based on employee group.

Pension expense

Pensions are accounted for on a cash basis. The pension liabilities are not recorded in the financial statements.

(thousands of dollars)

 2007

 2006
Defined benefit plans       220,592     196,376  
Defined contribution plans       75,788     72,957  
Total Pension Expense       296,380     269,333  

5. Contingencies

Guaranteed debt

The Minister of Finance has guaranteed the debt of others of $34.4 million (2006 — $46.1 million). See Schedule 8 for a list of guaranteed debt.

Lawsuits

Up to $31.2 million may be paid, depending on the outcome of lawsuits in progress.

Crop Insurance Liability

The Saskatchewan Crop Insurance Corporation administers the federal/provincial Crop Insurance Program. Premiums for the program are paid by the General Revenue Fund, the federal government and producers. A portion of the premiums is required to be paid to reinsurance funds established by the Province and the federal government. In certain circumstances, the reinsurance funds pay benefits to the Corporation.

In any year, where crop insurance indemnities exceed net premiums and any crop insurance fund balance, the shortfall is derived from one or both of the Crop Reinsurance Fund of Saskatchewan and the Crop Reinsurance Fund of Canada for Saskatchewan.

At March 31, 2007 the Crop Reinsurance Fund of Saskatchewan had a deficiency of $114.9 million (2006 — $152.9 million). Crop insurance premiums are actuarially set to cover indemnities over the long-term. In the event that the deficiency in the Saskatchewan reinsurance fund cannot be recovered from future premiums, the General Revenue Fund is required to pay the deficiency.

22 Government of Saskatchewan - 2006-07 Public Accounts

General Revenue Fund

Notes to the Financial Statements

6. Contractual Obligations

Major contractual obligations include:

• treaty land entitlement agreements valued at approximately $5.4 million over five years; rural municipality and school division tax loss compensation of approximately $10.5 million as land achieves reserve status over the course of the agreements;
• research and development projects for agriculture technology and opportunities in the agri-food industry, $12.0 million over five years;
• capital grant projects, over the next 15 years, $60.5 million;
• contracts for highway improvement, $136.9 million;
• computer service agreements, $22.3 million over three years;
• projects to expand innovation and enhance the competitive ability of the Saskatchewan economy, $19.9 million over five years;
• Saskatchewan Association of Rehabilitation Centres, for beverage container collection and recycling, $23.3 million over two years;
• Vaccine and Infectious Disease Organization, operating funding, $3.6 million over two years;
• construction contracts, $35.5 million;
• aerial fleet renewal, for fire suppression, $40.9 million over three years;
• vehicle purchases, $17.0 million; and
• operating and capital lease obligations as follows:
(thousands of dollars) Operating Capital
Future minimum lease payments                
2007-08       28,910     17,092  
2008-09       20,104     15,195  
2009-10       15,826     11,593  
2010-11       11,996     11,390  
2011-12       9,482     8,716  
Thereafter       43,622     9,665  
        129,940     73,651  
Interest and executory costs       --     (28,491 )
Total Lease Obligations       129,940     45,160  

7. Related Party Transactions

Included in these financial statements are transactions with various Saskatchewan Crown corporations, agencies, boards, and commissions related to the General Revenue Fund by virtue of common control by the Government of Saskatchewan.

Transactions include transfers to related parties of $2,832.1 million (2006 — $2,545.1 million).

Routine operating transactions with related parties are recorded at the rates charged by those organizations and are settled on normal trade terms. These transactions include:

• payments to Saskatchewan Telecommunications Holding Corporation of approximately $27.8 million (2006 — $27.5 million); and,
• taxation and non-renewable resource revenue received from related parties during 2006-07 of approximately $80.9 million (2006-$75.1 million). In addition, Saskatchewan Provincial Sales Tax and Fuel Tax are received from related parties on all taxable purchases.

Amounts due to or from related parties are described separately in these financial statements.

Government of Saskatchewan - 2006-07 Public Accounts 23

General Revenue Fund

Notes to the Financial Statements

8. Trust Funds

Trust assets are administered but not owned by the Government and the Government has no equity in the funds.

Trust fund assets held and administered by the General Revenue Fund are as follows:

(thousands of dollars)

 2007

 2006
Pension plans       7,947,767     7,326,541  
Public Guardian and Trustee of Saskatchewan       154,479     148,566  
Other       32,437     21,043  
Total Trust Fund Assets 1       8,134,683     7,496,150  
1 Amounts are based on the latest financial statements of the funds closest to March 31, 2007, where available.

9. Debt Reduction Account

This account was established pursuant to The Balanced Budget Act. The Debt Reduction Account is an accounting of the accumulated surpluses of the General Revenue Fund commencing April 1, 1995.

(thousands of dollars)

 Budget

 Actual
Debt Reduction Account, beginning of year       1,369,579     1,369,579  
Reduction in accumulated deficit for the year       101,908     292,704  
Debt Reduction Account, End of Year       1,471,487     1,662,283  

10. Adjustment to Accumulated Deficit

On April 1, 2006, the Saskatchewan Water Corporation transferred the Lake Diefenbaker area irrigation assets to the Department of Agriculture and Food. This transfer resulted in an increase in non-financial assets of $28.9 million and a corresponding decrease in the accumulated deficit of $28.9 million.

On April 1, 2005, the Saskatchewan Property Management Corporation was wound up and its assets and liabilities were transferred to the General Revenue Fund. This transfer resulted in an increase in financial assets of $21.7 million, liabilities of $89.6 million, and non-financial assets of $391.8 million, and a corresponding decrease in the accumulated deficit of $323.9 million. At the same time, a new department with similar responsibilities, Property Management, was created.

11. Comparative Figures

Certain of the 2006 figures have been reclassified to conform with the current year presentation. With regard to expenses, the figures are reported on the same basis as the Estimates for the prior year.

24 Government of Saskatchewan - 2006-07 Public Accounts

General Revenue Fund

           
Accounts Receivable     Schedule 1    
As at March 31, 2007    
(thousands of dollars)    


2007


 2006
Taxation                   200,030     210,517  
Non-renewable resources                   182,342     126,356  
Transfers from Government entities                   131,577     144,719  
Other own-source revenue                   79,188     69,912  
Transfers from the federal government                   105,371     71,029  
Other                   67,230     72,009  
                    765,738     694,542  
Provision for loss                   (65,540 )   (65,480 )
Total Accounts Receivable 1                   700,198     629,062  
1 Accounts receivable include $137.2 million due from related parties (2006 — $154.5 million).



Loans to Crown Corporations     Schedule 2    
As at March 31, 2007  
(thousands of dollars)  

2007


 2006
Short-term Loans                            
Information Services Corporation of Saskatchewan                   11,000     6,500  
Municipal Financing Corporation of Saskatchewan                   4,946     3,301  
Saskatchewan Crop Insurance Corporation                   15,800     53,000  
Saskatchewan Opportunities Corporation                   18,000     3,000  
Saskatchewan Water Corporation                   19,914     17,459  
SaskEnergy Incorporated                   40,000     67,500  
Total Short-term Loans                   109,660     150,760  
                   
      Principal   Sinking              
      Outstanding   Fund Equity              
                   
Long-term Loans                            
Information Services Corporation of Saskatchewan       13,547     --     13,547     30,000  
Investment Saskatchewan Inc.       10,919     --     10,919     14,761  
Municipal Financing Corporation of Saskatchewan       17,330     (275 )   17,055     9,838  
Saskatchewan Crop Insurance Corporation       100,000     --     100,000     100,000  
Saskatchewan Housing Corporation       83,004     (46,303 )   36,701     39,706  
Saskatchewan Power Corporation       2,525,322     (213,678 )   2,311,644     2,277,200  
Saskatchewan Telecommunications Holding                            
   Corporation       360,976     (52,031 )   308,945     347,488  
Saskatchewan Water Corporation       15,056     (389 )   14,667     15,869  
SaskEnergy Incorporated       673,453     (39,523 )   633,930     645,363  
Total Long-term Loans       3,799,607     (352,199 )   3,447,408     3,480,225  
Total Loans to Crown Corporations                   3,557,068     3,630,985  
Government of Saskatchewan - 2006-07 Public Accounts 25

General Revenue Fund

Other Loans     Schedule 3    
As at March 31, 2007  
(thousands of dollars)  

2007

 2006

Advanced Education and Employment                            
Saskatchewan Student Aid Fund             104,321           103,421  
 
Agriculture and Food                            
Agricultural Credit Corporation of Saskatchewan             7,750           7,750  
Short-term Hog Loans       6,279           9,663        
   Provision for Loss      
 (3,103
 )   3,176    
 (3,919
 )   5,744  
 
Industry and Resources                            
Economic Development Loans             1,459           1,894  
 
Northern Affairs                            
Economic Development Loans       5,051           5,071        
   Provision for Loss      
 (2,346
 )   2,705    
 (2,193
 )   2,878  
 
Regional Economic and Co-operative Development                            
Economic Development Loans       11,025           10,652        
   Provision for Loss      
 (3,019
 )   8,006    
 (2,496
 )   8,156  
 
Other             2,350           2,349  
Total Other Loans             129,767           132,192  
26 Government of Saskatchewan - 2006-07 Public Accounts

General Revenue Fund

Accounts Payable and Accrued Liabilities       Schedule 4  
As at March 31, 2007  
(thousands of dollars)  

2007


 2006
Personal services       74,937     42,486  
Travel       5,540     4,561  
Transfers       328,948     289,047  
Supplier payments       123,350     124,537  
Accrued interest       138,732     138,563  
Transfers to the federal government       219,637     231,137  
Equalization and Canada Health and Social Transfer repayable to the federal                
  government       362,011     398,394  
Tangible capital assets       53,753     31,165  
Other       77,351     79,700  
Total Accounts Payable and Accrued Liabilities 1       1,384,259     1,339,590  
1 Includes $123.6 million payable to related parties (2006 — $131.7 million) and $585.6 million payable to the federal government (2006 — $641.9 million).



Deposits Held       Schedule 5  
As at March 31, 2007  
(thousands of dollars)  


2007

 2006
Deposits held on behalf of Government entities and others                
Cattle Marketing Deductions Fund       5,972     5,907  
Fiscal Stabilization Fund       --     887,500  
Liquor and Gaming Authority       41,119     39,993  
New Crops Insurance Program       6,080     6,311  
Public Employees' Pension Plan       4,649     5,835  
Queen's Bench Court Accounts       8,322     8,244  
Saskatchewan Agricultural Stabilization Fund       7,342     9  
Saskatchewan Crop Insurance Corporation       127,740     96,693  
Saskatchewan Health Information Network       8,975     16,682  
Saskatchewan Student Aid Fund       37,015     31,982  
School Division Tax Loss Compensation Fund       5,806     5,514  
Teachers' Superannuation Commission       4,954     4,299  
Transportation Partnerships Fund       9,571     3,863  
Other       30,419     28,973  
Conditional Receipts       12,929     19,195  
Total Deposits Held       310,893     1,161,000  


Government of Saskatchewan - 2006-07 Public Accounts 27

General Revenue Fund

Public Debt       Schedule 6  
As at March 31, 2007  
(thousands of dollars)  


2007
 2006
Gross
Debt 1
 Sinking
Funds
(schedule 7)
 Public
Debt
 Public
Debt
Crown Corporations                            
Information Services Corporation of Saskatchewan       24,547     --     24,547     36,500  
Investment Saskatchewan Inc.       10,919     --     10,919     14,761  
Municipal Financing Corporation of Saskatchewan       22,276     (275 )   22,001     13,139  
Saskatchewan Crop Insurance Corporation       115,800     --     115,800     153,000  
Saskatchewan Housing Corporation       83,004     (46,303 )   36,701     39,706  
Saskatchewan Opportunities Corporation       18,000     --     18,000     3,000  
Saskatchewan Power Corporation       2,525,322     (213,678 )   2,311,644     2,277,200  
Saskatchewan Telecommunications Holding Corporation       360,976     (52,031 )   308,945     347,488  
Saskatchewan Water Corporation       34,970     (389 )   34,581     33,328  
SaskEnergy Incorporated       713,453     (39,523 )   673,930     712,863  
Total Crown Corporations       3,909,267     (352,199 )   3,557,068     3,630,985  
Government       8,148,029     (903,091 )   7,244,938     7,197,223  
Public Debt 2       12,057,296     (1,255,290 )   10,802,006     10,828,208  
1 The average effective interest rate on gross debt during 2006-07 was 6.71 per cent (2005-06 — 6.90 per cent), and includes the impact of foreign exchange and the amortization of any premiums and discounts associated with the debentures. The average term to maturity of gross debt outstanding at March 31, 2007 is 11.9 years (2006 — 10.4 years). Gross debt includes Canada Pension Plan debentures of $851.4 million (2006 — $885.4 million). These debentures are callable in whole or in part before maturity, on six business days prior notice, at the option of the Minister of Finance of Saskatchewan.
2 Public debt repayable in U.S. dollars of 91.7 million (2006 – 100.3 million) has been restated to $105.7 million Canadian (2006 — $117.0 million) at the exchange rate in effect at March 31, 2007 of 1.1529 (2006 — 1.1671).
Debt principal payment requirements in each of the next five years and thereafter are as follows:
2007 2006
Year of Maturity                
 
Short-term promissory notes       223,200     150,800  
2006-07       --     1,243,553  
2007-08       851,279     879,466  
2008-09       623,199     703,889  
2009-10       934,952     941,925  
2010-11       659,104     792,568  
2011-12       466,499     --  
6-10 years       3,514,939     3,239,290  
Thereafter       4,784,124     3,981,817  
Gross Debt a       12,057,296     11,933,308  
Sinking Funds       (1,255,290 )   (1,105,100 )
Public Debt       10,802,006     10,828,208  
a Gross debt includes debentures of $210.5 million (2006 — $410.5 million) that provide the holder with a choice of dates on which the debt matures. The year of maturity reflects the earliest possible date of maturity rather than maximum term to maturity.

28 Government of Saskatchewan - 2006-07 Public Accounts

General Revenue Fund

Sinking Funds       Schedule 7  
As at March 31, 2007  
(thousands of dollars)  


2006
 2007
  Sinking
Funds		 Contributions1   Earnings2 Redemptions3   Currency
Adjustment		   Sinking
Funds
Crown Corporations                                        
Investment Saskatchewan Inc.       6,158     --     49     (6,207 )   --     --  
Municipal Financing Corporation of Saskatchewan       162     100     13     --     --     275  
Saskatchewan Housing Corporation       43,298     585     2,420     --     --     46,303  
Saskatchewan Power Corporation       179,931     22,853     10,894     --     --     213,678  
Saskatchewan Telecommunications Holding                                        
  Corporation       46,086     3,266     2,679     --     --     52,031  
Saskatchewan Water Corporation       63     317     9     --     --     389  
SaskEnergy Incorporated       32,171     5,290     2,062     --     --     39,523  
Total Crown Corporations       307,869     32,411     18,126     (6,207 )   --     352,199  
Government       797,231     62,721     45,576     --     (2,437 )   903,091  
Total Sinking Funds 4       1,105,100     95,132     63,702     (6,207 )   (2,437 )   1,255,290  
1 Annual contributions, when established by Order in Council, are set at not less than one per cent of debentures outstanding. The aggregate amount of contributions estimated to be required in each of the next five fiscal years to meet sinking fund requirements are:
2008 2009 2010 2011 2012 Total
    Contributions a   100,780     101,850     96,976     91,016     84,776     475,398  
    Recoverable from Crown corporations   (32,806 )   (30,876 )   (30,561 )   (30,561 )   (28,861 )   (153,665 )
    Government Contributions   67,974     70,974     66,415     60,455     55,915     321,733  
a   Each year includes contributions for U.S. dollar debt of $1.2 million.
2 Sinking fund earnings include gains on investment sales of $6.8 million (2006 — $34.4 million).
3 The redemption value is based on the market value of the sinking fund units at the date of redemption.
4 The market value of sinking funds at March 31, 2007 is $1,287.7 million (2006 — $1,128.2 million).
Sinking fund assets have been invested as follows:
2007 2006
    Long-term Investments in securities of:            
       Government of Saskatchewan, coupon interest range 4.2% to 10.2%; maturing in 5.8 to 33.2 years   432,662     321,332  
       Government of Canada, coupon interest range 4.0% to 6.0%; maturing in 4.2 to 26.2 years   195,903     100,334  
       Other provincial governments, coupon interest range 4.3% to 9.5%; maturing in 4.8 to 32.9 years   455,015     464,267  
       Government of the United States, coupon interest range 4.5% to 4.6%; maturing in 9.9 to 28.9 year   19,964     13,521  
    Cash, short term investments and accrued interest a   151,746     205,646  
    Total Sinking Funds b   1,255,290     1,105,100  
a  Cash, short term investments and accrued interest include $0 (2006 — $19.6 million) Province of Saskatchewan securities and are disclosed net of $1.1 million (2006 — $1.3 million) in liabilities.
b  Included in total sinking funds are U.S. dollar cash, investments and accrued interest converted to $211.4 million Canadian (2006 — $203.9 million) at the exchange rate in effect at March 31, 2007, 1.1529 (2006 — 1.1671).


Government of Saskatchewan - 2006-07 Public Accounts 29

General Revenue Fund

Guaranteed Debt       Schedule 8  
As at March 31, 2007  
(thousands of dollars)  


2007 2006
Crown Corporations                
The Power Corporation Act                
   Saskatchewan Power savings bonds                
      Series I - series VIl (matured)       21     22  
The Saskatchewan Development Fund Act                
   Guaranteed investments       728     758  
The Saskatchewan Telecommunications Act                
   Telebonds - series I (matured)       127     143  
Total Crown Corporations       876     923  

Other		                
The Economic and Co-operative Development Act                
   Vanguard Inc.       1,250     1,250  
The Farm Financial Stability Act                
   Breeder associations loan guarantees       14,417     15,248  
   Feeder associations loan guarantees       10,778     10,469  
   Feedlot construction loan guarantees       749     406  
   Individual cattle feeder loan guarantees       75     --  
Agricultural Income Disaster Assistance Program       --     5  
The Housing and Special-care Homes Act                
   Senior citizens' housing       32     35  
The Student Assistance and Student Aid Fund Act       71     102  
The NewGrade Energy Inc. Act                
    NewGrade Energy Inc.       6,111     17,684  
Total Other       33,483     45,199  
Total Guaranteed Debt 1       34,359     46,122  
1 In addition to the amount shown, there is a contingent liability for interest accrued on certain of these items. Also, the Government has guaranteed debt, denominated in U.S. dollars, issued by Saskferco Products Inc. At March 31, 2007, the debt of $24.2 million Canadian was fully offset by Saskferco Products Inc.’s equity in a sinking fund. Total guaranteed debt is net of a loss provision of $0.5 million (2006 — $0.5 million).

Breeder and Feeder Associations

The Government provides guarantees to lenders who make loans to production associations. The Government guarantees repayment of 25 per cent of the outstanding loan balance at the time of a first default on any advance, plus accrued interest as of the time that payment is to be made on the guarantee. Guarantees for each cattle association are limited to $6 million for the breeder or feeder option. Guarantees for each bison association are limited to $5 million for the feeder option. Guarantees for each sheep association are limited to $4 million for the breeder or feeder option.

NewGrade Energy Inc. (NewGrade)

The Government has guaranteed certain long-term debt of NewGrade to a maximum of $360 million. A significant portion of this guarantee relates to U.S. dollar denominated debt. Thus, the amount of the guarantee is influenced by changes in the value of the U.S. dollar relative to the Canadian dollar.

30 Government of Saskatchewan - 2006-07 Public Accounts

General Revenue Fund

Tangible Capital Assets       Schedule 9  
As at March 31, 2007  
(thousands of dollars)  


2007
 2006
Land &
Buildings		 Machinery
&
Equipment		 Trans-
portation
Equipment		 Office &
Information
Technology		 Infra-
structure		 Total Total
Estimated useful life

 15 years-
Indefinite

 10-20 years

 10-40 years

 5-10 years

 15-40 years
Opening Net Book Value of                                              
   Tangible Capital Assets 1       566,920     63,789     112,082     41,959     1,455,509     2,240,259     1,773,630  
Opening cost       871,887     113,106     174,065     82,866     2,862,382     4,104,306     3,253,716  
Acquisitions       40,392     10,362     56,221     6,342     136,193     249,510     221,278  
Transfers       --     --     --     --     62,828     62,828     691,029  
Write downs       (787 )   --     672     --     (8 )   (123 )   (4,201 )
Disposals       (4,530 )   (2,913 )   (25,397 )   (394 )   (26,492 )   (59,726 )   (57,516 )
Closing cost 2       906,962     120,555     205,561     88,814     3,034,903     4,356,795     4,104,306  
Opening accumulated amortization       304,967     49,317     61,983     40,907     1,406,873     1,864,047     1,480,086  
Annual amortization       25,822     5,600     10,776     8,625     90,834     141,657     134,530  
Transfers       --     --     --     --     33,050     33,050     305,369  
Write downs       (34 )   --     (7 )   --     --     (41 )   (1,274 )
Disposals       (2,393 )   (2,607 )   (13,566 )   (382 )   (26,488 )   (45,436 )   (54,664 )
Closing accumulated amortization       328,362     52,310     59,186     49,150     1,504,269     1,993,277     1,864,047  
Closing Net Book Value of                                              
   Tangible Capital Assets 1
  
  
  
 578,600
  
  
 68,245
  
  
 146,375
  
  
 39,664
  
  
 1,530,634
  
  
 2,363,518
  
  
 2,240,259
  
1 Net book value does not include the following:
  • works of art and historical treasures such as the Legislative Building; and
  • intangible assets and items inherited by right of the Crown, such as Crown lands, forests, water and mineral resources.
2 Closing cost includes work-in-progress of $30.2 million (2006 — $24.7 million).

Government of Saskatchewan - 2006-07 Public Accounts 31

General Revenue Fund

Revenue       Schedule 10  
For the Year Ended March 31, 2007  
(thousands of dollars)  


2007
 2006
Budget

 Actual

 Actual

Taxation                      
Corporation capital       427,100     513,458     524,650  
Corporation income       361,400     554,001     393,629  
Fuel       371,300     383,576     376,426  
Individual income       1,494,000     1,668,538     1,447,905  
Sales       1,097,000     1,079,794     1,112,350  
Tobacco       165,400     190,334     171,107  
Other       94,700     94,844     89,751  
Total Taxation       4,010,900     4,484,545     4,115,818  
 
Non-renewable Resources                      
Natural gas       186,000     165,131     269,074  
Oil       989,800     1,318,852     1,124,952  
Potash       279,100     161,729     277,967  
Other       56,900     48,540     49,106  
Total Non-renewable Resources       1,511,800     1,694,252     1,721,099  
 
Transfers from Government Entities                      
Crown Investments Corporation of Saskatchewan       160,000     167,000     221,000  
Liquor and Gaming Authority       334,100     370,053     351,673  
Other enterprises and funds       42,500     50,043     41,214  
Total Transfers from Government Entities       536,600     587,096     613,887  
 
Other Own-source Revenue                      
Fines, forfeits, and penalties       10,200     10,173     9,788  
Interest, premium, discount, and exchange       53,400     96,062     89,226  
Motor vehicle fees       128,700     138,908     135,183  
Other licences and permits       35,600     36,787     41,800  
Sales, services, and service fees       84,000     93,332     89,389  
Transfers from other governments       16,400     17,368     16,860  
Commercial operations (schedule 11)       --     69,575     64,724  
Other       16,000     26,119     54,413  
Total Other Own-source Revenue       344,300     488,324     501,383  
Total Own-source Revenue       6,403,600     7,254,217     6,952,187  
 
Transfers from the Federal Government                      
Canada Health Transfer       760,800     716,775     659,558  
Canada Social Transfer       348,400     323,599     298,756  
Equalization       --     12,723     88,672  
Other       214,400     335,732     218,379  
Total Transfers from the Federal Government       1,323,600     1,388,829     1,265,365  
Total Revenue       7,727,200     8,643,046     8,217,552  
32 Government of Saskatchewan - 2006-07 Public Accounts

General Revenue Fund

Commercial Operations       Schedule 11  
For the Year Ended March 31, 2007  
(thousands of dollars)  


2007
 2006
Budget

 Actual

 Actual

Commercial Operations Revenue 1                      
Recovery from external sources                      
   Highways and Transportation       4,000     4,659     6,080  
   Information Technology Office       72     89     --  
   Property Management       64,571     65,190     58,960  
Recovery of overhead costs 2                      
   Highways and Transportation       --     (363 )   (316 )
Commercial Operations Revenue       68,643     69,575     64,724  
 
Commercial Operations Expense                      
   Highways and Transportation       4,000     4,198     5,715  
   Information Technology Office       72     89     --  
   Property Management       64,571     63,248     58,384  
Commercial Operations Expense       68,643     67,535     64,099  
 
Net Results                      
   Highways and Transportation       --     98     49  
   Information Technology Office       --     --     --  
   Property Management       --     1,942     576  
Net Results       --     2,040     625  
1 With the approval of the Lieutenant Governor in Council, revenues from commercial type activities may be used to pay for the related costs without requiring an appropriation.
2 Where a portion of the revenue collected relates to the recovery of overhead costs (e.g. employee benefit cost) paid for by another department, the revenue is included in sales, services and service fees.

Government of Saskatchewan - 2006-07 Public Accounts 33

General Revenue Fund

Operating Expense by Function       Schedule 12  
For the Year Ended March 31, 2007  
(thousands of dollars)  


2007


 2006


Agriculture       370,918     423,208  
Community development       267,262     244,059  
Economic development       119,033     104,722  
Education       1,605,807     1,461,516  
Environment and natural resources       180,299     131,665  
Health       3,202,965     2,990,625  
Protection of persons and property       357,972     316,721  
Social services and assistance       821,486     693,424  
Transportation       349,504     307,690  
Other       431,703     459,790  
Total Operating Expense       7,706,949     7,133,420  



Operating Expense by Object       Schedule 13  
For the Year Ended March 31, 2007  
(thousands of dollars)  
2007


 2006


Personal services       661,554     602,391  
Travel       41,570     40,653  
Transfers       6,140,480     5,739,936  
Goods and services       472,595     391,842  
Amortization of tangible capital assets       141,657     134,530  
Other       249,093     224,068  
Total Operating Expense       7,706,949     7,133,420  
34 Government of Saskatchewan - 2006-07 Public Accounts

General Revenue Fund

Servicing Government Debt       Schedule 14  
For the Year Ended March 31, 2007  
(thousands of dollars)  
2007

 2006

Total interest costs       802,132     820,787  
Interest reimbursed from Crown corporations and others       (273,486 )   (286,256 )
Net foreign exchange loss       2,787     2,167  
Other costs       6,870     7,968  
Total Servicing Government Debt       538,303     544,666  



Non-cash Items Included in Surplus       Schedule 15  
For the Year Ended March 31, 2007  
(thousands of dollars)  
2007

 2006

Amortization of foreign exchange loss       2,787     2,167  
Amortization of tangible capital assets (schedule 9)       141,657     134,530  
Net loss (gain) on disposal of tangible capital assets       12,722     (391 )
Write downs of tangible capital assets       82     2,927  
Loss on loans and investments       544     1,506  
Earnings retained in sinking funds       (45,576 )   (63,082 )
Gain on transfer of tangible capital assets       (908 )   (1,684 )
Total Non-cash Items Included in Surplus       111,308     75,973  



Net Change in Non-cash Operating Activities       Schedule 16  
For the Year Ended March 31, 2007    
(thousands of dollars)    
2007

 2006

(Increase) decrease in accounts receivable       (71,136 )   39,641  
Decrease in deferred charges       17,047     16,060  
Increase (decrease) in accounts payable and accrued liabilities       44,669     (47,305 )
Increase in unearned revenue       222     3,196  
(Increase) decrease in prepaid expenses       (197 )   337  
Increase in inventories held for consumption       (7,842 )   (5,862 )
Net Change in Non-cash Operating Activities       (17,237 )   6,067  
Government of Saskatchewan - 2006-07 Public Accounts 35

General Revenue Fund

Investing Activities       Schedule 17  
For the Year Ended March 31, 2007    
(thousands of dollars)    
2007
 2006
Receipts Disbursements Receipts Disbursements
Loans                            
Information Services Corporation of Saskatchewan       30,000     18,047     10,500     --  
Investment Saskatchewan Inc.       10,000     --     --     --  
Municipal Financing Corporation of Saskatchewan       --     8,975     3,847     5,000  
Saskatchewan Crop Insurance Corporation       37,200     --     68,579     --  
Saskatchewan Opportunities Corporation       --     15,000     --     3,000  
Saskatchewan Power Corporation       31,809     100,000     86,312     250,000  
Saskatchewan Telecommunications Holding                            
   Corporation       32,598     --     --     --  
Saskatchewan Water Corporation       876     2,455     34,012     7,067  
SaskEnergy Incorporated       32,681     1,100     101,195     102,500  
Other       60,855     58,567     60,224     64,738  
Total Loan Receipts and Disbursements       236,019     204,144     364,669     432,305  
Sinking Funds                            
Contributions       32,411     95,132     69,045     135,070  
Government debt redemption funded from sinking funds       --     --     30,912     --  
Total Sinking Fund Receipts and Disbursements       32,411     95,132     99,957     135,070  
Other       1,509     20     905     13  
Total Receipts and Disbursements       269,939     299,296     465,531     567,388  
Net Disbursements       (29,357 )         (101,857 )      




36 Government of Saskatchewan - 2006-07 Public Accounts








Summary Financial Statements

























Summary Financial Statements

Responsibility for the Summary Financial Statements

The Government is responsible for the Summary Financial Statements. The Government maintains a system of accounting and administrative controls to ensure that accurate and reliable financial statements are prepared and to obtain reasonable assurance that transactions are authorized, assets are safeguarded, and financial records are maintained.

The Provincial Comptroller prepares these statements in accordance with generally accepted accounting principles for the public sector, using the Government’s best estimates and judgment when appropriate. He uses information from the accounts of the General Revenue Fund, Crown corporations and other government organizations to prepare these statements.

The Provincial Auditor expresses an independent opinion on these statements. His report, which appears on the following page, provides the scope of his audit and states his opinion.

Treasury Board approves the Summary Financial Statements. The statements are tabled in the Legislative Assembly as part of the Public Accounts and referred to the Standing Committee on Public Accounts for review.

On behalf of the Government of the Province of Saskatchewan.

/s/ Pat Atkinson

Pat Atkinson
Minister of Finance


/s/ Doug Matthies

Doug Matthies
Deputy Minister of Finance


/s/ Terry Paton

Terry Paton
Provincial Comptroller

Regina, Saskatchewan
June 2007

Government of Saskatchewan - 2006-07 Public Accounts 39
























Summary Financial Statements

Auditor’s Report

To the Members of the Legislative Assembly of Saskatchewan

I have audited the summary statement of financial position of the Government of Saskatchewan as at March 31, 2007 and the summary statements of operations, accumulated deficit, change in net debt, and cash flow for the year then ended. These financial statements are the responsibility of Treasury Board. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In my opinion, these financial statements present fairly, in all material respects, the financial position of the Government of Saskatchewan as at March 31, 2007 and the results of its operations, the changes in its net debt and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

/s/ Fred Wendel

Fred Wendel, CMA, CA
Provincial Auditor

Regina, Saskatchewan
June 8, 2007







Government of Saskatchewan - 2006-07 Public Accounts 41
























Summary Financial Statements

Summary Statement of Financial Position
 As at March 31, 2007
(thousands of dollars)

2007 2006
Financial Assets                
Cash and temporary investments       2,215,210     1,646,114  
Accounts receivable (schedule 1)       859,624     793,429  
Assets held for sale (schedule 2)       138,445     120,754  
Deferred charges       33,428     40,035  
Loans and mortgages receivable (schedule 3)       135,598     141,397  
Investment in government business enterprises (schedule 4)       3,105,661     2,946,797  
Other investments (schedule 5)       658,796     619,175  
Total Financial Assets       7,146,762     6,307,701  
 
Liabilities                
Accounts payable and accrued liabilities (schedule 6)       1,783,624     1,690,950  
Other liabilities (schedule 7)       173,411     198,295  
Unearned revenue (schedule 8)       250,683     241,772  
Public debt (note 2)(schedule 9)       7,585,288     7,642,768  
Unamortized foreign exchange loss on public debt       (12,573 )   (16,828 )
Pension liabilities (note 3)(schedule 12)       4,684,467     4,311,986  
Total Liabilities       14,464,900     14,068,943  
Net Debt       (7,318,138 )   (7,761,242 )
 
Non-financial Assets                
Prepaid expenses       25,828     22,920  
Inventories held for consumption       96,241     86,196  
Tangible capital assets (schedule 13)       4,112,977     3,964,885  
Total Non-financial Assets       4,235,046     4,074,001  
Accumulated Deficit       (3,083,092 )   (3,687,241 )
 
Contingencies (note 4)
Contractual obligations (note 5)
Guaranteed debt (note 4)(schedule 11)

The accompanying notes and schedules are an integral part of these financial statements.



Government of Saskatchewan - 2006-07 Public Accounts 43

Summary Financial Statements

Summary Statement of Operations
 For the Year Ended March 31, 2007
(thousands of dollars)

2007 2006
Revenue                
Taxation       4,485,757     4,116,975  
Non-renewable resources       1,694,252     1,721,100  
Other own-source revenue       1,430,995     1,451,072  
Transfers from the federal government       1,552,090     1,458,553  
Total Revenue (schedule 14)       9,163,094     8,747,700  
 
Expense                
Agriculture       536,715     512,081  
Community development       318,514     294,495  
Debt charges (schedule 15)       782,776     840,640  
Economic development       227,757     371,390  
Education       1,691,705     1,413,920  
Environment and natural resources       212,494     174,163  
Health       3,379,066     3,221,618  
Protection of persons and property       399,596     356,250  
Social services and assistance       842,648     827,139  
Transportation       372,634     328,868  
Other       526,530     445,971  
Total Expense (schedule 16)       9,290,435     8,786,535  
Deficit from government service organizations       (127,341 )   (38,835 )
Income from government business enterprises (schedule 4)       701,289     717,811  
Surplus (schedule 17)       573,948     678,976  
 
The accompanying notes and schedules are an integral part of these financial statements.






44 Government of Saskatchewan - 2006-07 Public Accounts

Summary Financial Statements

Summary Statement of Accumulated Deficit
 For the Year Ended March 31, 2007
(thousands of dollars)

2007
 2006
Estimated


 Actual


 Actual


Accumulated deficit, beginning of year       (3,687,241 )   (3,687,241 )   (4,432,042 )
Adjustment to accumulated deficit (note 8)       --     (26,946 )   --  
Surplus (deficit)       (112,940 )   573,948     678,976  
Other comprehensive income (schedule 4)       --     57,147     65,825  
Accumulated Deficit, End of Year       (3,800,181 )   (3,083,092 )   (3,687,241 )


Summary Statement of Change in Net Debt
 For the Year Ended March 31, 2007
(thousands of dollars)

2007
 2006
Estimated


 Actual


 Actual


Surplus (deficit)       (112,940 )   573,948     678,976  
 
Tangible Capital Assets                      
Acquisitions (schedule 13)       (480,852 )   (450,575 )   (407,492 )
Amortization (schedule 13)       305,335     285,385     298,092  
Net loss on disposal       --     8,713     8,350  
Proceeds on disposal       --     7,189     5,789  
Write downs (schedule 13)       --     1,196     72,291  
Net Acquisition of Tangible Capital Assets       (175,517 )   (148,092 )   (22,970 )
 
Other Non-financial Assets                      
Net (acquisition) use of prepaid expenses       --     (2,908 )   4,753  
Net acquisition of inventories held for consumption       --     (10,045 )   (335 )
Net (Acquisition) Use of Other Non-financial Assets       --     (12,953 )   4,418  
 
Decrease (increase) in net debt       (288,457 )   412,903     660,424  
Net debt, beginning of year       (7,761,242 )   (7,761,242 )   (8,487,491 )
Adjustment to accumulated deficit (note 8)       --     (26,946 )   --  
Other comprehensive income (schedule 4)       --     57,147     65,825  
Net Debt, End of Year       (8,049,699 )   (7,318,138 )   (7,761,242 )
 
The accompanying notes and schedules are an integral part of these financial statements.


Government of Saskatchewan - 2006-07 Public Accounts 45

Summary Financial Statements

Summary Statement of Cash Flow
For the Year Ended March 31, 2007
(thousands of dollars)

2007 2006
Operating Activities                
Surplus       573,948     678,976  
Add (deduct) non-cash items                
  Income from government business enterprises (schedule 4)       (701,289 )   (717,811 )
  Other non-cash items included in surplus (schedule 19)       121,321     185,263  
Net change in non-cash operating activities (schedule 20)       29,145     82,449  
Dividends received from government business enterprises (schedule 4)       583,513     575,829  
Dividends received from other investments       108,581     127,432  
Adjustment to accumulated deficit (note 8)       (10,887 )   --  
Cash Provided by Operating Activities       704,332     932,138  
 
Capital Activities                
Acquisition of tangible capital assets (schedule 13)       (450,575 )   (407,492 )
Proceeds on disposal of tangible capital assets       7,189     5,789  
Cash Used for Capital Activities       (443,386 )   (401,703 )
 
Investing Activities                
Disposal of land held for resale       950     1,534  
Increase in other assets held for sale       (18,742 )   (4,620 )
Net decrease (increase) in loans and mortgages receivable       10,343     (3,946 )
Increase in equity advances to government business enterprises       --     (25,000 )
Acquisition of other investments       (63,982 )   (59,008 )
Disposition of other investments       39,942     130,954  
Contributions made to sinking funds       (63,623 )   (104,536 )
Debt redemption funded from sinking funds       6,207     36,376  
Cash Used for Investing Activities       (88,905 )   (28,246 )
 
Financing Activities                
Proceeds from public debt       1,285,313     531,260  
Repayment of public debt       (1,235,855 )   (857,175 )
(Decrease) increase in other liabilities       (24,884 )   12,876  
Increase in pension liabilities       372,481     126,924  
Cash Provided by (Used for) Financing Activities       397,055     (186,115 )
 
Increase in cash and temporary investments       569,096     316,074  
Cash and temporary investments, beginning of year       1,646,114     1,330,040  
Cash and Temporary Investments, End of Year       2,215,210     1,646,114  
 
The accompanying notes and schedules are an integral part of these financial statements.
46 Government of Saskatchewan - 2006-07 Public Accounts

Summary Financial Statements

Notes to the Summary Financial Statements
As at March 31, 2007

1. Significant Accounting Policies

a) Basis of accounting

These Summary financial statements are prepared in accordance with generally accepted accounting principles for the public sector, as recommended by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants.

b) Government reporting entity

The government reporting entity consists of organizations controlled by the Government. These government entities are segregated into two classifications. Entities that are self-sufficient and have the financial and operating authority to sell goods and services to individuals and organizations outside the government reporting entity as their principal activity are classified as government business enterprises. All other government entities are government service organizations.

A listing of the organizations included in the government reporting entity is provided in schedule 22. Unless otherwise noted, the financial activities of all subsidiaries of these organizations have also been included.

Trust funds are administered but not controlled by the Government and therefore are excluded from the government reporting entity.

c) Government partnerships

The Government has entered into various partnerships where there is a contractual arrangement between the Government and one or more partners outside the government reporting entity and where these partners share, on an equitable basis, the significant risks and benefits associated with operating the partnership. Government business partnerships are government partnerships that are self-sufficient and have the financial and operating authority to sell goods and services to individuals and organizations outside the government reporting entity as their principal activity.

d) Method of consolidation

Government service organizations are consolidated after adjustment to a basis consistent with the accounting policies described in note 1(e). Significant inter-organization balances and transactions are eliminated.

Government business enterprises are accounted for by the modified equity method. Using this method, the Government’s investment in government business enterprises, which is initially recorded at cost, is adjusted annually to include the net earnings or losses and certain other net equity changes of the enterprise without adjustment to conform with the accounting policies described in note 1(e). With the exception of dividends declared by March 31, inter-organization balances and transactions are not eliminated.

Government partnerships, except those designated as government business partnerships, are proportionately consolidated, as disclosed in note 6. Significant inter-organization balances and transactions are eliminated.

Government business partnerships are accounted for by the modified equity method.

Financial results of government organizations whose fiscal year-ends are other than March 31 are adjusted for transactions having a significant impact on these financial statements.

e) Specific accounting policies

Financial assets

Financial assets are assets that could be used to discharge existing liabilities or finance future operations and are not for consumption in the normal course of operations.

Temporary investments are generally for less than one year and are recorded at cost which approximates market value.

Assets held for sale include inventories and land held for resale, which are valued at the lower of cost and net realizable value. Other assets held for sale include assets that the Government has committed to selling and anticipates that a sale to a purchaser outside the government reporting entity will be completed in the next year.

Government of Saskatchewan - 2006-07 Public Accounts 47

Summary Financial Statements

Notes to the Summary Financial Statements

1. Significant Accounting Policies (continued)

Deferred charges include issue costs and net discounts or premiums incurred on the issue of debt. They are recorded at cost and amortized on a straight-line basis over the remaining life of the debt issue.

Loans and mortgages receivable are initially recorded at cost. Where there has been a loss in value that is other than a temporary decline, the loan or mortgage is written down to recognize the loss. Interest is recognized on the accrual basis except when collection is uncertain it is recorded on the cash basis.

Other investments are accounted for by various methods as described below and are written down to their fair value when there is evidence of a permanent decline in value.

  Equity investments exist when the Government holds shares of private or public companies and exercises significant influence but has less than a controlling interest or when the Government has shared control, as in government business partnerships. These investments are accounted for by the modified equity method. Using this method, the Government’s investment, which is initially recorded at cost, is adjusted annually for the Government’s share of the investee’s net earnings or losses and is reduced by dividends and partnership distributions received from these investments.

  Portfolio investments exist when the Government holds shares of private or public companies and does not exercise significant influence. Portfolio investments are recorded at cost, and dividends from these shares are recorded as income when receivable.

  Bonds, debentures and other advances and Property holdings are recorded at amortized cost.

Liabilities

Liabilities are present obligations to individuals and organizations outside the government reporting entity as a result of transactions and events occurring prior to year-end, which will be satisfied in the future through the transfer or use of assets or another form of economic settlement. They consist of obligations to provide authorized transfers where any eligibility criteria have been met, to repay borrowings, to pay for goods and services acquired prior to year-end and to deliver goods or services in the future where payment has been received.

Unearned revenue is revenue that will be earned in a subsequent fiscal year and includes restricted funding from the federal government and other organizations.

Public debt of government service organizations is recorded at par, net of amounts issued on behalf of and reimbursable from government business enterprises.

Premiums, discounts and issue costs are recorded as deferred charges and are amortized on a straight-line basis over the remaining life of the debt issue.

Certain debenture issues require contributions to a sinking fund. These obligations are recorded at principal less sinking fund balances where applicable. Premiums and discounts on long-term investments within these sinking funds are amortized on a constant yield basis.

Debt issues and sinking fund investments held in foreign currencies are converted to the Canadian dollar equivalent at the exchange rate in effect at March 31.

Unamortized foreign exchange loss includes unrealized foreign exchange gains and losses resulting from the conversion of debentures due and sinking funds held in a foreign currency to the Canadian dollar equivalent at the exchange rate in effect at March 31. Unrealized foreign exchange gains and losses are amortized on a straight-line basis over the remaining life of the debt issue. Realized foreign exchange gains and losses are included in the surplus or deficit.

Pension liabilities are calculated using the projected benefit method prorated on services, except as otherwise disclosed in note 3. Pension fund assets are valued at market related values. Changes in the pension liabilities that result from estimation adjustments due to experience gains and losses and changes in actuarial assumptions are amortized on a straight-line basis over the expected average remaining service life of the related employee group. Gains or losses as a result of plan amendments are recognized in the period of the plan amendment.

Guaranteed debt includes guarantees of the Government made through specific agreements or legislation to pay all or part of the principal or interest on a debt obligation in the event of default by the borrower. Loss provisions on guaranteed debt are recorded as a liability and expense when it is likely that a loss will occur. The amount of the loss provision represents the Government’s best estimate of future payments net of recoveries and is adjusted as necessary to ensure it equals the expected payout of the guarantee.

48 Government of Saskatchewan - 2006-07 Public Accounts

Summary Financial Statements

Notes to the Summary Financial Statements

1. Significant Accounting Policies (continued)

Non-financial assets

Non-financial assets are acquired, constructed or developed assets that do not normally provide resources to discharge existing liabilities, but instead are normally employed to deliver government services, may be consumed in the normal course of operations and are not for sale in the normal course of operations.

Inventories held for consumption are recorded at cost and are expensed as they are consumed.

Tangible capital assets are recorded at cost and include all amounts directly attributable to the acquisition, construction, development or betterment of the asset. Tangible capital assets are generally amortized on a straight-line basis over the estimated useful life of each asset.

Revenue

Revenues are recorded on the accrual basis except for receipts from the federal government for corporate and personal income taxes, which are recorded on the cash basis. Government transfers are recognized as revenue in the period during which the transfer is authorized and any eligibility criteria are met.

Expense

Expenses are recorded on the accrual basis. Government transfers are recognized as expenses in the period during which the transfer is authorized and any eligibility criteria are met.

f) Measurement Uncertainty

Uncertainty in the determination of the amount at which an item is recognized or disclosed in financial statements is known as measurement uncertainty. Such uncertainty exists when there is a variance between the recognized or disclosed amount and another reasonably possible amount.

Measurement uncertainty that may be material to these financial statements exists in the accrual of pension obligations, site restoration obligations, accident claims obligations, unbilled utility revenue, non-renewable resources royalties and the federal government’s Canada Health Transfer and Canada Social Transfer payments. It also exists in the valuation of loans where repayment is contingent upon an organization’s cash flows.

The nature of the uncertainty in the accrual of pension, site restoration and accident claims obligations arises because actual experience may differ significantly from actuarial or historical estimations and assumptions. Uncertainty in the accrual of unbilled utility revenue arises because actual usage may differ from estimated usage. The uncertainty related to accrued royalties arises because of price and production sensitivities in the royalty structures. Uncertainty related to transfers from the federal government arises because of changes in economic and demographic conditions in the Province and the country. The uncertainty in the valuation of loans arises from the effect of commodity prices on cash flows.

While best estimates are used for reporting items subject to measurement uncertainty, it is reasonably possible that changes in future conditions, occurring within one fiscal year, could require a material change in the amounts recognized or disclosed.

2. Risk Management of Public Debt

The Government borrows funds in both domestic and foreign capital markets by issuing Government of Saskatchewan securities. As a result, the Government is exposed to four types of risk: interest rate risk, foreign exchange rate risk, credit risk and liquidity risk.

To manage these risks, the Government maintains a preference for fixed rate Canadian dollar denominated debt. Where market conditions dictate that other forms of debt are more attractive, the Government seeks opportunities to use derivative financial instruments to reduce these risks. A derivative financial instrument is a contract whose value is based on the value of another asset or index.

Interest rate risk is the risk that the Government’s debt charges will increase due to changes in interest rates. This risk is managed by issuing debt securities at predominantly fixed rates of interest rather than at floating rates of interest.

Government of Saskatchewan - 2006-07 Public Accounts 49

Summary Financial Statements

Notes to the Summary Financial Statements

2. Risk Management of Public Debt (continued)

Floating rate debt is defined as the sum of floating rate debentures, short-term promissory notes, fixed rate debt maturing within one year and Saskatchewan Savings Bonds. The Government seeks opportunities to effectively convert floating rate debt into fixed rate debt through the use of interest rate swaps. The Government has interest rate swaps on a notional value of debt of $70.6 million (2006 — $311.5 million). At March 31, 2007, 88.6 per cent (2006 — 85.7 per cent) of the Government’s gross debt effectively carried a rate of interest that was fixed for greater than a one-year period.

Public debt includes floating rate debt of $1,402.1 million (2006 — $1,747.1 million). A one percentage point increase in interest rates would decrease the surplus by $14.0 million in 2007-08.

Foreign exchange rate risk is the risk that the Government’s debt charges will increase due to a decline in the value of the Canadian dollar relative to other currencies. This risk is managed by maintaining a preference for issuing debt that is denominated in Canadian dollars. Where debt has been issued in foreign currencies, the Government seeks opportunities to effectively convert it into Canadian dollar debt through the use of cross currency swaps and foreign currency forward exchange contracts. At March 31, 2007, 97.4 per cent (2006 — 97.4 per cent) of the Government’s gross debt is effectively denominated in Canadian dollars.

The following foreign-denominated items have been hedged to Canadian dollars using cross currency swaps:

• debentures totalling 1,419.0 million U.S. dollars (2006 - 1,419.0 million) fully hedged to $1,882.3 million Canadian (2006 - $1,882.3 million);
• debentures totalling 300.0 million Swiss francs (2006 — 200.0 million) fully hedged to $274.7 million Canadian (2006 - $182.4 million); and
• interest payments on debentures of 275.0 million U.S. dollars (2006 — 275.0 million) hedged to Canadian dollars at an exchange rate of 1.2325 (2006 — 1.2325).

In total, the Government has cross currency swaps on a notional value of debt of $2,770.5 million (2006 — $2,713.3 million). The effectiveness of these hedges is assessed on an ongoing basis by monitoring the credit ratings of the counterparties to the hedges.

Credit risk is the risk that a loss may occur from the failure of another party to meet its obligations under a derivative financial instrument contract. This risk is managed by dealing only with counterparties with good credit ratings and by establishing limits on individual counterparty exposures and monitoring those exposures on a regular basis. At March 31, 2007, 100 per cent (2006 — 100 per cent) of the Government’s counterparties held a Standard and Poor’s credit rating of A or better.

Liquidity risk is the risk that the Government will not be able to meet its financial commitments over the short-term. This risk is managed by distributing debt maturities over many years, maintaining sinking funds on long-term debt issues and maintaining adequate cash reserves and short-term borrowing programs as contingent sources of liquidity.

3. Retirement Benefits

The Government sponsors several defined benefit and defined contribution pension plans. The Government also participates in a joint defined benefit pension plan.

Defined benefit plans provide benefits based on length of service and pensionable earnings. A typical defined benefit plan provides pensions equal to 2.0 per cent of a member’s average five years highest salary, multiplied by the years of service to a maximum of 35 years. Members contribute a percentage of salary, which may vary based on age, to their plan. Pensions and contribution rates are integrated with the Canada Pension Plan.

Actuarial valuations are performed at least triennially. An actuary extrapolates these valuations when a valuation is not done in the current fiscal year. Valuations are based on a number of assumptions about future events, such as inflation rates, interest rates, wage and salary increases and employee turnover and mortality. These assumptions reflect estimates of expected long-term rates and short-term forecasts. Estimates vary based on the individual plan.

The accrued benefit obligation is determined using the projected benefit method prorated on services. Pension fund assets are valued at market related values based on the actual market values averaged over a four year period. In the periods between valuations, the actuary estimates the market related value of pension fund assets using expected long-term rates of return for the individual plans.

Joint defined benefit plans are governed by a formal agreement between the joint sponsors (i.e., employer and plan members), which establishes that the joint sponsors have shared control over the plan. Funding contributions are shared

50 Government of Saskatchewan - 2006-07 Public Accounts

Summary Financial Statements

Notes to the Summary Financial Statements

3. Retirement Benefits (continued)

mutually between the employer and plan members. The sponsors share, on an equitable basis, the significant risks of each plan. Accordingly, the Government accounts for only its portion of the plan. Plan assets and surpluses are restricted for member benefits or certain other purposes set out in the agreement. Plan benefits are determined on the same basis as defined benefit plans.

The accrued benefit obligation is determined using the projected accrued benefit actuarial cost method. Pension fund assets are valued at market related values by averaging the difference between the net investment income on a market value basis and the expected investment income determined by the actuary, over a five year period.

Defined contribution plans provide pensions based on accumulated contributions and investment earnings. Employees contribute a percentage of salary. The Government provides contributions at specified rates for employee current service.

Pension fund assets of government sponsored defined benefit and defined contribution plans are invested in fixed income securities, equities, real estate and short-term monetary items. The investment in Government of Saskatchewan securities is insignificant for all plans.

Government Service Organizations

a) Defined benefit plans and joint defined benefit plan

The two main defined benefit plans are the Teachers’ Superannuation Plan (TSP) and the Public Service Superannuation Plan (PSSP). Other plans include Judges of the Provincial Court Superannuation Plan (Judges), Saskatchewan Transportation Company Employees Superannuation Plan (STC), Anti-TB League Employees Superannuation Plan (ATB) and the Saskatchewan Pension Annuity Fund, an annuity underwriting operation. Defined benefits are also payable to members of the former Members of the Legislative Assembly Superannuation Fund (MLA).

The Government is required to match member current service contributions for all plans except Judges and the PSSP. Separate pension funds are maintained for all plans except the PSSP and the MLA, for which member contributions are received and pension obligations are paid directly by the Government.

The Government also participates in the Saskatchewan Healthcare Employees’ Pension Plan (SHEPP), a joint defined benefit plan for employees of the Regional Health Authorities. The Government contributes to the plan at the ratio of 1.12 to 1 of employee contributions. Any actuarially determined deficiency is the responsibility of participating employers and employees in the ratio of 1.12 to 1. The Government’s participating employer contributions for the SHEPP represents approximately 91 per cent of the total employer contributions to the plan.






Government of Saskatchewan - 2006-07 Public Accounts 51

Summary Financial Statements

Notes to the Summary Financial Statements

3. Retirement Benefits (continued)

Information on the defined benefit plans and the joint defined benefit plan of government service organizations follows:

2007
 2006
TSP

 PSSP

 Others

 SHEPP

 Total

 Total

Plan status closed closed closed 1 open n/a n/a
Member contribution rate (percentage of salary) 7.85 7.00-9.00 2 5.00-9.00 2 5.85-7.35 2 n/a n/a
Number of active members 3,124 1,312 63 30,646 35,145 35,469
Average age of active members (years) 53.2 54.9 57.0 44.9 46.0 46.1
Number of former members entitled to deferred            
    pension benefits 4,965 119 11 1,386 6,481 6,703
Number of superannuates and surviving spouses 10,640 5,717 2,372 8,813 27,542 27,023
Actuarial valuation date June 30/05 Dec. 31/05 Various Dec. 31/04 n/a n/a
Long-term assumptions used            
    Rate of compensation increase (percentage) 3.50 3.50 3.50 3.75 n/a n/a
    Expected rate of return on plan assets (percentage) 6.75 5.00 5.00-6.00 6.50 n/a n/a
    Discount rate (percentage) 5.00 5.00 5.00 6.50 n/a n/a
    Inflation rate (percentage) 2.50 2.50 2.50 2.75 n/a n/a
    Expected average remaining service life (years) 4.7 3.9 Various 11.9 n/a n/a
    Post-retirement index (percentage of annual            
        increase in Consumer Price Index) 80 70 Various Ad hoc n/a n/a
1 Judges is open to new membership; all other plans are closed.
2 Contribution rate varies based on age upon joining the plan.

b) Defined contribution plans

The two main multi-employer defined contribution plans sponsored by the Government are the Public Employees Pension Plan (PEPP) and the Capital Pension Plan (Capital). The Government provides contributions to the plans at specified rates for employee current service. The Government also contributes to the Saskatchewan Teachers’ Retirement Plan (STRP), sponsored by the Saskatchewan Teachers’ Federation and to the Regina Civic Employees’ Superannuation and Benefit Plan (RCESP). The Government has fully funded its share of contributions to the defined contribution plans.

Information on the defined contribution plans of government service organizations follows:

2007
 2006
Government Sponsored
PEPP

 Capital

 RCESP 1

 STRP 2

 Total

 Total

Plan status open open open n/a n/a n/a
Member contribution rate (percentage of salary) 5.00-7.00 3 5.00-5.50 3 8.85-13.11 3 n/a n/a n/a
Government contribution rate (percentage of salary) 6.45-7.00 3 5.50-6.00 3 8.85-13.11 3 n/a n/a n/a
Government service organization participation            
    Number of active members 20,135 706 1,434 n/a 22,275 22,788
    Member contributions (thousands of dollars) 51,619 2,160 8,468 n/a 62,247 56,309
    Government contributions (thousands of dollars) 48,113 2,401 8,640 38,235 97,389 91,621
1 Certain employees of a Regional Health Authority participate in the RCESP, a multi-employer defined benefit plan established through a City of Regina bylaw. All costs, including costs of any actuarially determined deficiency, are equally shared by the employees and employers. At December 31, 2006, audited financial statements for the plan reported an accrued benefit obligation of $768.1 million (2005 — $768.1 million) and pension fund assets at market value of $825.2 million (2005 — $774.1 million).
2 The STRP is a contributory defined benefit pension plan. The Government contributes an amount which is set through provincial negotiations.
3 Contribution rate varies based on employee group.



52 Government of Saskatchewan - 2006-07 Public Accounts

Summary Financial Statements

Notes to the Summary Financial Statements

3. Retirement Benefits (continued)

c) Pension expense

Pension expense for government service organizations is primarily allocated to education expense, health expense and other expense. Pension interest expense is included in debt charges. The total pension expense of government service organizations includes the following:

(thousands of dollars)

 2007

 2006

Defined benefit plans                
    Current period benefit cost       81,889     73,663  
    Plan amendment 1       90,433     --  
    Amortization of estimation adjustments       218,988     (19,849 )
    Employee contributions       (21,456 )   (22,504 )
    Plan expenses       4,502     7,255  
    Cost of financing unfunded pension obligation (pension interest expense)       259,885     260,546  
Total pension expense, defined benefit plans       634,241     299,111  
Other plans                
    Total pension expense, joint defined benefit plan       28,389     84,509  
    Total pension expense, defined contribution plans       97,389     91,621  
Total Pension Expense       760,019     475,241  
1 During the year, the Government approved a plan amendment to provide guaranteed indexing of pensions for members of the PSSP, Judges, STC, ATB, and MLA at 70 per cent of the annual change in the Consumer Price Index. Previously, the Government provided ad hoc indexing to members of these plans.

Government Business Enterprises

a) Defined benefit plans

There are additional employee pension plans of government business enterprises which are accounted for in the investment in government business enterprises. The two main defined benefit plans of government business enterprises are the Power Corporation Superannuation Plan (SaskPower) and the Saskatchewan Telecommunications Pension Plan (SaskTel). Other plans include the Saskatchewan Government Insurance Superannuation Plan, the Liquor Board Superannuation Plan, and the Pension Plan for Employees of the Saskatchewan Workers’ Compensation Board.

The Government contributes the amount necessary to fund the payment of pension benefits.

Information on the defined benefit plans of government business enterprises follows:

2007
 2006
 
 SaskPower
 SaskTel
 Others
 Total
 Total
Plan status closed closed closed n/a n/a
Number of active members 496  375  109 980 1,188
Number of former members, superannuates          
  and surviving spouses 1,733  1,914  433 4,080 3,961
Member contributions (thousands of dollars) 1,711  1,647  327 3,685 4,145
Government contributions (thousands of dollars) 453  35,404  1,156 37,013 44,231
Benefits paid (thousands of dollars) 42,260  54,042  8,062 104,364 96,097
Actuarial valuation date Sept.30/06 Dec.31/06 Various n/a n/a
Long-term assumtions used          
    Rate of compensation increase (percentage) 3.50 3.00 3.25-3.50 n/a n/a
    Expected rate of return on plan assets (percentage) 6.50  7.00  4.75-6.25 n/a n/a
    Discount rate (percentage) 5.25  5.15  4.75-5.00 n/a n/a
    Inflation rate (percentage) 2.50 2.50 2.25-2.50 n/a n/a
    Post-retirement index (percentage of annual increase in          
        Consumer Price Index) 70  100  50-70 n/a n/a



Government of Saskatchewan - 2006-07 Public Accounts 53

Summary Financial Statements

Notes to the Summary Financial Statements

3. Retirement Benefits (continued)

Based on the latest actuarial valuation for SaskPower at September 30, 2006 and extrapolations for other plans to December 31, 2006, the present value of accrued pension benefits and the market value of pension fund assets are shown in the table below:

(thousands of dollars) 2007
 2006
SaskPower

 SaskTel

 Others

 Total

 Total

Accrued benefit obligation       836,505     1,049,368     132,975     2,018,848     1,926,102  
Fair value of plan assets       790,190     1,007,653     100,724     1,898,567     1,781,249  
Plan Deficit       46,315     41,715     32,251     120,281     144,853  
Unamortized amounts 1       (82,564 )   (88,284 )   (5,683 )   (176,531 )   (202,934 )
Pension (Surplus) Liabilities       (36,249 )   (46,569 )   26,568     (56,250 )   (58,081 )
1 Includes unamortized transitional assets, unamortized actuarial gains (losses) and unamortized past service costs. SaskTel’s amounts are amortized against the plan deficit over the average remaining life of retired members of 22 years. SaskPower and the other plans’ amounts are amortized against the plan deficit over periods ranging from 2.6 to 4 years, which is the expected average remaining service life of active plan members at the time the amounts arose.

At December 31, 2006, 31.4 per cent (2005 — 33.0 per cent) of pension plan assets were invested in fixed income securities and 60.2 per cent (2005 — 58.0 per cent) in equity investments.

b) Defined contribution plans

Information on the defined contribution plans of government business enterprises follows:

2007
 2006
 PEPP
 Capital
 Total
 Total
Plan status       open     open     n/a     n/a  
Member contribution rate (percentage of salary)       4.00-6.55  1   5.50     n/a     n/a  
Government contribution rate (percentage of salary)       5.00-6.55  1   5.50     n/a     n/a  
Government business enterprise participation                            
    Number of active members       9,289     2,427     11,716     11,110  
Government contributions (thousands of dollars)       29,681     5,600     35,281     31,861  
1 Contribution rate varies based on employee group.

c) Pension expense

Pension expense and pension interest expense for government business enterprises are included in income from government business enterprises. The pension expense for the year for the defined benefit plans is $40.7 million (2006 — $39.9 million) and $35.3 million (2006 — $31.9 million) for the defined contribution plans.

d) Other future benefit plans

Other future benefit plans of government business enterprises include a defined benefit severance plan, a supplementary superannuation plan, two defined benefit service recognition plans, a defined benefit retiring allowance plan, and a voluntary early retirement plan. The accrued benefit liability is $77.8 million (2006 — $73.8 million).




54 Government of Saskatchewan - 2006-07 Public Accounts

Summary Financial Statements

Notes to the Summary Financial Statements

4. Contingencies

Guaranteed debt

The Government has guaranteed the debt of others of $62.6 million (2006 — $94.6 million). Schedule 11 provides a listing of guaranteed debt.

Lawsuits

Up to $42.4 million may be paid depending on the outcome of lawsuits in progress.

Goods and Services Tax Obligation

Since 1999, a government business enterprise has determined its GST obligations based on a ruling from the Canada Revenue Agency (CRA). As a result of recent legislative changes, the government business enterprise has requested the CRA to confirm its prior ruling. The outcome of this request cannot be predicted. If CRA amends its ruling, up to $32.5 million (2006 — $28 million) may be paid.

5. Contractual Obligations

Significant contractual obligations include:

• forward purchase agreements of $1,458.8 million for coal contracted for future minimum deliveries valued at current prices over the next 18 years, and approximately $5,743.8 million for power over the next 21 years;
• contracts for the construction and acquisition of tangible capital assets of $717.7 million;
• agreements to provide housing subsidies and transfers of $134.5 million over five years;
• capital grant projects of $59.2 million over 15 years;
• computer service agreements of $36.4 million over three years;
• treaty land entitlement agreements valued at approximately $5.4 million over five years, and rural municipality and school division tax loss compensation of approximately $10.5 million as land achieves reserve status over the course of the agreements;
• other contractual obligations of $321.7 million, which consists of $146.4 million for government service organizations, including $12.0 million for agriculture, $66.5 million for economic development, $3.6 million for education and $64.3 million for environment and natural resources, and $175.3 million for government business enterprises; and
• operating and capital lease obligations as follows:
(thousands of dollars)

 Operating 1

 Capital 2

Future minimum lease payments    
2007-08 76,735  18,942 
2008-09 67,662  16,783 
2009-10 50,428  12,925 
2010-11 44,325  12,525 
2011-12 28,250  9,812 
Thereafter 53,534  25,992 
  320,934  96,979 
Interest and executory costs --  (40,674)
Total Lease Obligations 320,934  56,305 
1 Total operating lease obligations include $164.2 million for government service organizations and $156.7 million for government business enterprises.
2 Total capital lease obligations include $48.4 million for government service organizations (schedule 7) and $7.9 million for government business enterprises.



Government of Saskatchewan - 2006-07 Public Accounts 55

Summary Financial Statements

Notes to the Summary Financial Statements

6. Government Partnerships

The Government has a 50 per cent partnership interest in Meadow Lake Pulp Limited Partnership (MLPLP), which operates a pulp mill near Meadow Lake and a 45.5 per cent partnership interest in Saskatchewan Entrepreneurial Fund Inc., which assists with the development and growth of small business in the province.

The Government’s pro-rata share of its government partnerships is as follows:

(thousands of dollars)

 2007

 2006

Revenue       89,378     89,281  
Expense       94,523     98,413  
Deficit       (5,145 )   (9,132 )
Recovery (write down) of partnership interest       24,584     (48,516 )
Accumulated surplus, beginning of year       2,000     59,648  
Accumulated surplus, end of year       21,439     2,000  
Transferred to assets held for sale       (21,439 )   (2,000 )
Partnership Interest       --     --  

The Government is in the process of disposing of its interest in MLPLP. Accordingly, the net assets of MLPLP have been classified as assets held for sale. The revenue and expense of MLPLP have been proportionately consolidated in these financial statements.

During the year, certain of the MLPLP assets were sold to Meadow Lake Mechanical for cash and equity consideration, resulting in a reduction in the assets held for sale to $13.4 million, as disclosed in schedule 2.

7. Trust Funds

Trust fund assets held and administered by the Government are as follows:

(thousands of dollars)

 2007

 2006

Pension plans       10,827,351     9,948,965  
Public Guardian and Trustee of Saskatchewan       154,479     148,566  
Other       214,566     204,455  
Total Trust Fund Assets 1       11,196,396     10,301,986  
1 Amounts are based on the latest financial statements of the funds closest to March 31, 2007, where available.

8. Adjustment to Accumulated Deficit

Adjustments of $26.9 million were made to the April 1, 2006 accumulated deficit.

During 2006-07, the Government determined that one of its employee benefit plans should no longer be included in the government reporting entity, but rather be disclosed as a trust administered by the Government. As a result, the Government recorded an $11.2 million decrease in financial assets, a $0.3 million decrease in financial liabilities and a corresponding $10.9 million increase in the accumulated deficit.

Additionally, a government business enterprise recorded a prior period adjustment related to an error in its actuarial valuation performed in the prior year. As a result, the Government recorded a $16.0 million decrease in investment in government business enterprises, and a corresponding increase in the accumulated deficit.

The comparative figures have not been restated.

9. Comparative Figures

Certain of the 2006 comparative figures have been reclassified to conform with the current year’s presentation.

56 Government of Saskatchewan - 2006-07 Public Accounts

Summary Financial Statements

Notes to the Summary Financial Statements

10. Subsequent Event

On June 8, 2007, Crown Life Insurance Company and its two shareholders, HARO Financial Corporation and Extendicare REIT, and Canada Life Assurance Company signed agreements to facilitate the final closing of the sale of the insurance business of Crown Life to Canada Life. The agreements are subject to receiving regulatory approval. The closing is expected to occur in July 2007 when regulatory approval is received. Upon the closing, the Government expects to receive net proceeds of approximately $144 million from HARO resulting in investment income of approximately $60 million.







Government of Saskatchewan - 2006-07 Public Accounts 57

Summary Financial Statements

Accounts Receivable       Schedule 1  
As at March 31, 2007  
(thousands of dollars)  


2007

 2006

Taxation       200,564     210,998  
Non-renewable resources       182,342     126,376  
Other own-source revenue       437,210     442,234  
Transfers from the federal government       123,455     97,923  
        943,571     877,531  
Provision for loss       (83,947 )   (84,102 )
Total Accounts Receivable       859,624     793,429  



Assets Held for Sale       Schedule 2  
As at March 31, 2007  
(thousands of dollars)  


2007

 2006

Land held for resale       113,241     114,191  
Inventories held for resale       1,842     1,943  
Other assets held for sale                
  Meadow Lake Pulp Limited Partnership (note 6)       13,439     2,000  
  Centennial Foods (schedule 5)       9,923     2,620  
Total Assets Held for Sale       138,445     120,754  

Land Held for Resale

The estimated net realizable value of the Government’s land held for resale at March 31, 2007 is $216.9 million (2006 — $214.4 million).

Other Assets Held for Sale

The Government has committed to and has a plan in place for the sale of these assets. The assets are in sale condition, have been publicly offered for sale and an active market exists. The Government anticipates that a sale to a purchaser external to the government reporting entity will be completed within the next year.

58 Government of Saskatchewan - 2006-07 Public Accounts

Summary Financial Statements

Loans and Mortgages Receivable       Schedule 3  
As at March 31, 2007  
(thousands of dollars)  


2007

 2006

Student loans       137,115     133,824  
Agricultural loans       45,737     55,409  
Other loans       35,112     39,005  
Mortgages       2,640     2,709  
        220,604     230,947  
Provision for loss       (85,006 )   (89,550 )
Total Loans and Mortgages Receivable       135,598     141,397  

Student Loans

The program operates under the authority of The Student Assistance and Student Aid Fund Act, 1985. Loans are interest-free until the discontinuance of full-time studies or graduation. Interest rates are prescribed by the Government. Student bursaries, study grants and other varieties of loan forgiveness are available to students who meet specific criteria.

The administration and delivery of the federal and provincial student loans programs is integrated. The Government approves applications for both provincial and federal loans, external agencies are contracted to disburse, administer and collect loans, and the federal government is responsible for collection of loans in default.

Student loans approved between August 1996 and July 2001 are lender-financed, disbursed, managed and collected by a bank. The Government retained responsibility for loan approval during this period, and pays a risk premium of 5.0 per cent to the bank when loans become repayable.

A loss provision of $51.4 million (2006 — $52.7 million) has been recorded on these loans.

Agricultural Loans

Capital loan program

The Government holds $28.3 million (2006 — $35.7 million) in loans under the Capital loan program. These loans are repayable over terms not exceeding 25 years and bear interest at rates between 5.0 and 13.5 per cent (2006 — 5.0 and 13.5 per cent). Security on individual loans varies and may include mortgages on real property, security agreements and guarantees. The program operates under The Agricultural Credit Corporation of Saskatchewan Act. A loss provision of $7.3 million (2006 — $10.2 million) has been recorded on these loans.

Other agricultural loans

The Government holds $17.4 million (2006 — $19.7 million) in loans under various other agricultural loan programs. The interest on these loans ranges from 5.0 to 10.5 per cent (2006 — 5.0 to 10.5 per cent). Generally, the loans are secured by promissory notes and, where applicable, by guarantees or general security arrangements. A loss provision of $11.3 million (2006 — $11.3 million) has been recorded on these loans.

Other Loans

The Government’s loan portfolio also consists of numerous other loans at various interest rates. Maturities on these loans extend to 2022. A loss provision of $14.8 million (2006 — $15.2 million) has been recorded on these loans.

Mortgages

Mortgages are repayable, at various interest rates, over terms not exceeding 35 years. Security on the mortgages may include promissory notes or charges against residential property. A loss provision of $0.2 million (2006 — $0.1 million) has been recorded on these mortgages.

Government of Saskatchewan - 2006-07 Public Accounts 59

Summary Financial Statements

Investment in Government Business Enterprises          
As at March 31, 2007  
(thousands of dollars)  


SaskEnergy SaskPower SaskTel SLGA SGC
Assets                                  
Cash and temporary investments                                  
    Due from government organizations       --     --     --     38,320     --  
    Other       (2,362 )   19,861     16,110     1,119     9,201  
Accounts receivable                                  
    Due from government organizations       --     --     --     --     --  
    Other       170,310     185,863     95,518     34,689     149  
Inventories       7,029     139,215     8,170     20,240     176  
Prepaid expenses       --     5,789     18,804     3,453     160  
Long-term investments                                  
    In the Government       --     --     --     --     --  
    Other       25,145     31,814     2,299     --     --  
Capital assets       955,169     3,694,756     958,643     59,212     62,564  
Other assets                                  
    Due from government organizations       --     --     --     --     --  
    Other       164,569     86,028     107,410     --     --  
Total Assets       1,319,860     4,163,326     1,206,954     157,033     72,250  
Liabilities                                  
Accounts payable and accrued liabilities                                  
    Due to government organizations       12,107     60,539     5,098     --     --  
    Other       170,744     153,761     127,590     20,951     7,948  
Dividends payable to government organizations       12,200     10,019     12,500     101,093     27,641  
Public debt (schedule 9)                                  
    Owing to government organizations       705,188     2,223,628     310,769     --     --  
    Other       7,621     89,861     7,458     --     28,708  
Unearned revenue       --     --     55,762     --     --  
Unpaid insurance claims       --     --     --     --     --  
Other liabilities       --     157,245     207     34,989     7,953  
Total Liabilities       907,860     2,695,053     519,384     157,033     72,250  
Net Assets       412,000     1,468,273     687,570     --     --  
Revenue                                  
From government organizations       15,276     50,980     36,556     --     --  
Other       1,238,670     1,410,168     978,576     784,100     112,230  
Total Revenue       1,253,946     1,461,148     1,015,132     784,100     112,230  
Expense                                  
Paid and owing to government organizations       60,629     268,826     53,519     --     --  
Other       1,164,791     1,099,656     889,224     413,205     77,368  
Total Expense 3       1,225,420     1,368,482     942,743     413,205     77,368  
Income (loss) before non-recurring items       28,526     92,666     72,389     370,895     34,862  
Non-recurring items 4       24,631     --     114     --     --  
Net Income (Loss)       53,157     92,666     72,503     370,895     34,862  
Retained earnings, beginning of year       323,878     775,846     415,067     --     --  
Effect of prior period adjustment       --     --     --     (842 )   --  
Dividends to government organizations       (34,500 )   (60,232 )   (50,000 )   (370,053 )   (34,862 )
Retained earnings, end of year       342,535     808,280     437,570     --     --  
Equity advances from government organizations       71,531     659,993     250,000     --     --  
Accumulated other comprehensive income 5       (2,066 )   --     --     --     --  
Net Assets       412,000     1,468,273     687,570     --     --  
1 Net assets are restricted as disclosed on page 62.
2 Adjustments include:
  • reclassifying dividends paid by March 31, 2007;
  • accounting for the Saskatchewan Auto Fund policy holder rebates approved in 2006 and 2007; and
  • reversing losses recognized by government business enterprises on transactions with government organizations.
3 Total expense includes debt charges, net of sinking fund earnings, of $249.9 million (2006 restated — $229.4 million). Interest in the amount of $249.6 million (2006 restated — $226.1 million) was paid to government organizations.
4 Non-recurring items include $24.6 million (2006 — $53.6 million) received from government organizations.
5 Accumulated other comprehensive income primarily consists of market value adjustments on investments and includes a $57.1 million (2006 — $65.8 million) current period net unrealized gain and $126.1 million (2006 - $60.3 million) accumulated from prior years.

60 Government of Saskatchewan - 2006-07 Public Accounts

Summary Financial Statements

        Schedule 4  
   
   


MFC SGI Auto Fund 1 WCB 1 SGGF Adjustments 2 2007 2006
 
 
5       --     --     --     --     --     38,325     40,142  
--       24,054     24,748     62,956     3,327     (45,097 )   113,917     258,186  
 
--       --     --     --     --     --     --     4,712  
916       97,622     151,415     41,469     55     --     778,006     730,751  
--       --     --     --     --     --     174,830     170,125  
--       79,800     23,815     --     --     --     131,821     121,812  
 
--       6,763     14,246     6,473     --     --     27,482     32,442  
31,846       439,712     1,061,637     1,184,664     104     --     2,777,221     2,505,957  
--       10,881     41,925     16,529     --     --     5,799,679     5,638,276  
 
--       --     --     --     --     --     --     6,000  
86       3,631     --     --     --     3,217     364,941     377,751  
32,853       662,463     1,317,786     1,312,091     3,486     (41,880 )   10,206,222     9,886,154  
 
 
--       13,063     28,103     8,599     --     --     127,509     133,614  
291       39,964     28,188     17,366     478     --     567,281     585,787  
--       17,378     --     --     --     (52,097 )   128,734     142,413  
 
20,367       --     --     --     --     --     3,259,952     3,293,210  
--       --     --     --     --     --     133,648     140,862  
--       165,153     258,636     --     --     --     479,551     445,321  
--       263,514     763,554     933,200     --     --     1,960,268     1,857,067  
--       1,792     --     141,254     200     99,978     443,618     341,083  
20,658       500,864     1,078,481     1,100,419     678     47,881     7,100,561     6,939,357  
12,195       161,599     239,305     211,672     2,808     (89,761 )   3,105,661     2,946,797  
 
--       --     4,081     21,868     --    7,000     135,761     121,284  
1,705       321,358     637,021     286,897     1,447     --     5,772,172     5,519,195  
1,705       321,358     641,102     308,765     1,447     7,000     5,907,933     5,640,479  
 
783       12,775     47,326     8,599     --     565     453,022     430,622  
25       254,894     492,638     281,278     1,856     1,366     4,676,301     4,491,511  
808       267,669     539,964     289,877     1,856     1,931     5,129,323     4,922,133  
897       53,689     101,138     18,888     (409 )   5,069     778,610     718,346  
--       (1,588 )   (44,097 )   --     (500 )   (55,881 )   (77,321 )   (535 )
897       52,101     57,041     18,888     (909 )   (50,812 )   701,289     717,811  
11,298       63,364     198,323     7,438     3,716     (39,798 )   1,759,132     1,617,150  
--       --     (16,059 )   --     --     842     (16,059 )   --  
--       (33,866 )   --     --     --     --     (583,513 )   (575,829 )
12,195       81,599     239,305     26,326     2,807     (89,768 )   1,860,849     1,759,132  
--       80,000     --     --     1     7     1,061,532     1,061,532  
--       --     --     185,346     --     --     183,280     126,133  
12,195       161,599     239,305     211,672     2,808     (89,761 )   3,105,661     2,946,797  
Government of Saskatchewan - 2006-07 Public Accounts 61

Summary Financial Statements

Investment in Government Business Enterprises (continued)       Schedule 4  


SaskEnergy Incorporated (SaskEnergy)

SaskEnergy promotes, transports, stores and distributes natural gas in Saskatchewan.

Saskatchewan Power Corporation (SaskPower)

SaskPower generates, purchases, transmits, distributes and sells electricity and related products and services.

Saskatchewan Telecommunications Holding Corporation (SaskTel)

SaskTel markets and supplies a range of voice, data, internet, wireless, text, image and entertainment products, systems and services. Through interconnection agreements, SaskTel is part of the national and global communications network.

Liquor and Gaming Authority (SLGA)

SLGA’s main functions are to control the manufacture and distribution of beverage alcohol throughout the Province, to oversee the licensing of all establishments selling alcohol in the Province and to maintain the integrity of all licensed gaming while ensuring maximum benefit to Saskatchewan charities.

Saskatchewan Gaming Corporation (SGC)

SGC manages and operates Casino Regina and Casino Moose Jaw.

Municipal Financing Corporation of Saskatchewan (MFC)

MFC’s objective is to assist municipalities in financing their capital requirements.

Saskatchewan Government Insurance (SGI) and Saskatchewan Auto Fund (Auto Fund)

SGI’s competitive general insurance business, SGI CANADA, offers a comprehensive line of home, tenant, farm, automobile extension and commercial coverages.

The Auto Fund, the provincial compulsory vehicle insurance program, is administered by SGI on behalf of the Government. Any net assets of the Auto Fund are held on behalf of Saskatchewan’s motoring public and cannot be used for any other purpose.

Workers’ Compensation Board (Saskatchewan) (WCB)

WCB provides workers’ compensation insurance to Saskatchewan workers and employers. Any net assets of the WCB cannot be used for any other purpose.

Saskatchewan Government Growth Fund Management Corporation (SGGF)

SGGF participates in the federal government’s Immigrant Investor Program to acquire lower cost capital for commercial investment in Saskatchewan. Investment funds are raised through eight subsidiary fund companies and are managed by Crown Capital Partners Inc., a fund manager.

In March 1999, the Immigrant Investor Program ended. However, with a significant number of subscribers yet to complete their subscription requirements, the funds will require management by SGGF for at least the next four years.

62 Government of Saskatchewan - 2006-07 Public Accounts

Summary Financial Statements

Other Investments       Schedule 5  
As at March 31, 2007  
(thousands of dollars)  


2007 2006
Equity Investments                
Saskferco Products Inc.       127,714     129,537  
Meadow Lake OSB Limited Partnership       34,334     34,963  
Big Sky Farms Inc.       29,318     26,477  
Government Business Partnerships       93,512     119,072  
Other       35,354     16,713  
        320,232     326,762  
Portfolio Investments                
HARO Financial Corporation       68,000     68,000  
Other       30,811     20,954  
        98,811     88,954  
Bonds, Debentures and Other Advances                
HARO Financial Corporation       15,598     15,448  
Meadow Lake Pulp Limited Partnership       13,439     --  
Other       210,626     184,857  
        239,663     200,305  
Property Holdings       90     3,154  
Total Other Investments       658,796     619,175  

Saskferco Products Inc. (Saskferco)

The Government owns 68.4 million Class B common shares equivalent to a 49.5 per cent voting interest in Saskferco, a nitrogen fertilizer plant in Belle Plaine.

Meadow Lake OSB Limited Partnership (ML OSB)

The Government is a limited partner in ML OSB, an oriented strand board facility near Meadow Lake. The Government holds a 25 per cent interest in ML OSB. The Government has issued options to purchase its units of ML OSB, which, if exercised, would reduce the Government’s interest to 6.8 per cent.

Big Sky Farms Inc. (Big Sky)

The Government owns 4.4 million (2006 — 4.4 million) common shares equivalent to a 41.2 per cent (2006 — 44.7 per cent) interest in Big Sky, a hog production operation headquartered in Humboldt.

Government of Saskatchewan - 2006-07 Public Accounts 63

Summary Financial Statements

Other Investments (continued)       Schedule 5  


Government Business Partnerships

The Government has invested in government business partnerships to promote economic growth and provide an economic return. The Government’s investment in government business partnerships includes:

• a 50 per cent interest in NewGrade Energy Inc., which operates a heavy oil upgrading plant in Regina;
• a 33.3 per cent interest in Foragen Technologies Limited Partnership, a venture capital fund which provides seed capital to technology corporations; and
• a 33.1 per cent interest in Centennial Foodservice and Centennial 67 Partnership (Centennial Foods), value-added food manufacturing and distribution businesses in Saskatoon.

As the Government expects to dispose of its remaining interest in Centennial Foods in 2007, its investment has been reclassified to assets held for sale and is disclosed on schedule 2.

Condensed financial information for Government Business Partnerships is as follows:

2007 2006
Assets                
Capital assets       12,670     11,951  
Other       306,836     386,213  
Total Assets       319,506     398,164  
Liabilities                
Debt       10,795     31,218  
Other       123,201     132,130  
Total Liabilities       133,996     163,348  
Net Assets       185,510     234,816  
Revenue       1,929,752     1,947,736  
Expense       1,757,706     1,736,739  
Net Income       172,046     210,997  
Retained earnings, beginning of year       510,124     299,127  
Retained earnings, end of year       682,170     510,124  
Equity advances/share capital (net of partnership distributions)       (496,660 )   (274,678 )
Unrealized gains and losses       --     (630 )
Net Assets       185,510     234,816  
Investment in Government Business Partnerships                
Government's share of retained earnings, end of year       332,653     252,068  
Government's investment 1       (216,924 )   (112,074 )
Adjustments 2       (22,217 )   (20,922 )
Total Investment in Government Business Partnerships 3       93,512     119,072  
1 Government’s investment includes the Government’s initial investment net of partnership distributions as well as subsequent cash injections provided under various terms and conditions.
2 Adjustments include:
  • additional operating expenses incurred by the Government's subsidiaries through which the Government has made these investments; and
  • certain valuation and amortization adjustments.
3 Total investment in government business partnerships consists of:
                2007

                 2006

  NewGrade Energy Inc.     91,671     116,827  
  Foragen Technologies Limited Partnership     1,841     2,245  
        93,512     119,072  
64 Government of Saskatchewan - 2006-07 Public Accounts

Summary Financial Statements

Other Investments (continued)       Schedule 5  


HARO Financial Corporation (HARO)

In 1992, the Government entered into a Term Loan agreement with HARO. The loan was for an initial five-year term with a maximum of four five-year renewal terms at the option of HARO. In 2002, the Government agreed to renew this loan for a third five-year term. Annual interest rates on the loan are fixed at the start of each renewal term. For the third five-year term, the interest rate on the loan is 5.5 per cent compounded annually.

Security for the loan is 100 per cent of HARO’s assets, which consist primarily of HARO’s 65.2 per cent interest in Crown Life Insurance Company (Crown Life) shares.

Payment of principal and interest is subject to available cash flow as defined in the loan agreement. Due to collection uncertainty, the Government will record interest income when payments are received. The total interest deferred and owing to the Government at March 31, 2007 is $211.1 million (2006 — $199.3 million).

All unpaid principal and interest is due on December 15, 2017. On that date, any amounts outstanding will convert to 100 per cent of HARO equity shares. The Government has a unilateral right, prior to December 15, 2017, to convert the loan to either HARO non-voting, HARO voting or Crown Life shares. Any conversion may be subject to regulatory approval.

The Government owns 68 million HARO Class B non-voting common shares, which entitle the Government to a maximum of 100 per cent of participation rights with respect to dividends and remaining property of HARO on its liquidation or dissolution. Subject to regulatory approval, the Government has a unilateral right to exchange at any time the Class B shares for voting shares or HARO’s assets.

Meadow Lake Pulp Limited Partnership (MLPLP)

In addition to its government partnership interest in MLPLP, as disclosed in note 6, the Government has made several loans to MLPLP with interest rates ranging from 6 to 15 per cent (2006 — 6.0 to 11.5 per cent). During 2005-06, the Government reduced the carrying value of these loans to nil due to the uncertainty of cash flows from MLPLP. As a result of the ongoing liquidation of the remaining MLPLP assets, these loans have now been valued at the expected proceeds to be received by the Government. Accordingly, a recovery of the loan losses of $21.4 million has been recorded during the year.

Government of Saskatchewan - 2006-07 Public Accounts 65

Summary Financial Statements

Accounts Payable and Accrued Liabilities       Schedule 6  
As at March 31, 2007  
(thousands of dollars)  


2007

 2006

Transfers                
   Federal government       255,208     236,633  
   Other       262,013     210,666  
Equalization and Canada Health and Social Transfer repayable                
   to the federal government       362,011     398,394  
Accrued salaries and benefits       356,137     350,449  
Supplier payments       260,213     215,896  
Accrued interest       141,719     141,992  
Other       146,323     136,920  
Total Accounts Payable and Accrued Liabilities       1,783,624     1,690,950  


Other Liabilities       Schedule 7  
As at March 31, 2007  
(thousands of dollars)  


2007

 2006

Funds held on behalf of government business enterprises and others                
   Liquor and Gaming Authority       41,119     39,993  
   Other       46,993     54,650  
Capital lease obligations (note 5)       48,353     59,650  
Other       36,946     44,002  
Total Other Liabilities       173,411     198,295  


Unearned Revenue       Schedule 8  
As at March 31, 2007  
(thousands of dollars)  


2007

 2006

Housing contributions       138,597     131,583  
Motor vehicle licensing fees       35,227     34,800  
Health contributions       26,362     26,468  
Crown mineral leases       17,198     17,259  
Other       33,299     31,662  
Total Unearned Revenue       250,683     241,772  


66 Government of Saskatchewan - 2006-07 Public Accounts

Summary Financial Statements

Public Debt       Schedule 9  
As at March 31, 2007  
(thousands of dollars)  


2007
 2006
Gross
Debt 1

 Sinking
Funds
(schedule 10)

 Public
Debt

 Public
Debt

Government Service Organizations                            
General Revenue Fund 2       8,148,029     (903,091 )   7,244,938     7,197,223  
Saskatchewan Crop Insurance Corporation       115,800     --     115,800     153,000  
Regional Health Authorities       84,154     --     84,154     102,621  
Saskatchewan Housing Corporation       96,089     (46,303 )   49,786     53,676  
Saskatchewan Water Corporation       34,970     (389 )   34,581     33,328  
Information Services Corporation of Saskatchewan       24,547     --     24,547     36,500  
Saskatchewan Opportunities Corporation       18,000     --     18,000     3,000  
Investment Saskatchewan Inc.       10,919     --     10,919     60,761  
Other       2,563     --     2,563     2,659  
Total Government Service Organizations 3       8,535,071     (949,783 )   7,585,288     7,642,768  
Government Business Enterprises                            
Saskatchewan Power Corporation       2,614,431     (213,678 )   2,400,753     2,369,164  
SaskEnergy Incorporated       721,074     (39,523 )   681,551     720,484  
Saskatchewan Telecommunications Holding Corporation       368,374     (52,031 )   316,343     355,135  
Saskatchewan Gaming Corporation       28,708     --     28,708     32,895  
Municipal Financing Corporation of Saskatchewan       22,276     (275 )   22,001     13,139  
Total Government Business Enterprises 4       3,754,863     (305,507 )   3,449,356     3,490,817  
Public Debt 5       12,289,934     (1,255,290 )   11,034,644     11,133,585  
1 The average effective interest rate on gross debt during 2006-07 was 6.7 per cent (2005-06 — 6.9 per cent) and includes the impact of foreign exchange and the amortization of any premiums or discounts associated with the debentures. The average term to maturity of gross debt outstanding at March 31, 2007 is 11.8 years (2006 — 10.4 years).
  Gross debt includes Canada Pension Plan debentures of $851.4 million (2006 — $885.4 million). These debentures are callable in whole or in part before maturity, on 30 days prior notice, at the option of the Minister of Finance of Saskatchewan.
2 General Revenue Fund debt is shown net of $3,316.5 million (2006 — $3,350.7) reimbursable from government business enterprises and $240.5 million (2006 — $280.3 million) reimbursable from government service organizations.
3 Gross debt of government service organizations includes $98.5 million (2006 — $104.9 million) primarily secured by buildings with a carrying value of $134.2 million at March 31, 2007 (2006 — $167.7 million).
4 Schedule 4 provides information on government business enterprises as presented in their audited financial statements closest to March 31, 2007. Public debt of government business enterprises shown above has been adjusted from the audited financial statements to March 31, 2007 for the following government business enterprises, in the following amounts:
                2007

                 2006

  Saskatchewan Power Corporation           87,264     72,060  
  SaskEnergy Incorporated           (31,258 )   (13,932 )
  Saskatchewan Telecommunications Holding Corporation           (1,884 )   (1,409 )
  Municipal Financing Corporation of Saskatchewan           1,634     26  
              55,756     56,745  
5 Public debt payable in U.S. dollars of 91.7 million (2006 — 100.3 million) has been restated to $105.7 million Canadian (2006 — $117.0 million) at the exchange rate in effect at March 31, 2007 of 1.1529 (2006 — 1.1671).

Government of Saskatchewan - 2006-07 Public Accounts 67

Summary Financial Statements

Public Debt (continued)       Schedule 9  


Debt principal payment requirements in each of the next five years and thereafter are as follows:

2007
 2006
Year of Maturity

 Government
Service
Organizations

 Government
Business
Enterprises

           Total

           Total

      Short-term promissory notes       178,254     44,946     223,200     150,800  
      2006-07       --     --     --     1,334,858  
      2007-08       452,562     431,626     884,188     892,495  
      2008-09       513,866     123,318     637,184     717,834  
      2009-10       898,552     51,318     949,870     956,804  
      2010-11       495,376     179,640     675,016     808,444  
      2011-12       473,012     6,648     479,660     --  
      6-10 years       3,240,547     343,615     3,584,162     3,306,903  
      Thereafter       2,282,902     2,573,752     4,856,654     4,070,547  
      Gross debt a       8,535,071     3,754,863     12,289,934     12,238,685  
      Sinking funds       (949,783 )   (305,507 )   (1,255,290 )   (1,105,100 )
      Public Debt       7,585,288     3,449,356     11,034,644     11,133,585  
a

 Gross debt includes debentures of $210.5 million (2006 — $410.5 million) that provide the holder with a choice of dates on which the debt matures. The year of maturity reflects the earliest possible date of maturity rather than the maximum term to maturity.

68 Government of Saskatchewan - 2006-07 Public Accounts

Summary Financial Statements

Sinking Funds       Schedule 10  
As at March 31, 2007  
(thousands of dollars)  


2006
 2007
Sinking
Funds

 Contributions 1

 Earnings 2

 Redemptions 3

 Currency
Adjustment

 Sinking
Funds

Government Service Organizations                                        
General Revenue Fund       797,231     62,721     45,576     --     (2,437 )   903,091  
Saskatchewan Housing Corporation       43,298     585     2,420     --     --     46,303  
Saskatchewan Water Corporation       63     317     9     --     --     389  
Investment Saskatchewan Inc.       6,158     --     49     (6,207 )   --     --  
Sinking Funds of Government Service Organizations     846,750     63,623     48,054     (6,207 )   (2,437 )   949,783  
 
Government Business Enterprises                                        
Saskatchewan Power Corporation       179,931     22,853     10,894     --     --     213,678  
Saskatchewan Telecommunications Holding                                        
  Corporation       46,086     3,266     2,679     --     --     52,031  
SaskEnergy Incorporated       32,171     5,290     2,062     --     --     39,523  
Municipal Financing Corporation of Saskatchewan       162     100     13     --     --     275  
Sinking Funds of Government Business Enterprises       258,350     31,509     15,648     --     --     305,507  
Total Sinking Funds 4       1,105,100     95,132     63,702     (6,207 )   (2,437 )   1,255,290  
1 Annual contributions, when established by Order in Council, are set at not less than 1.0 per cent of debentures outstanding. The aggregate amount of contributions estimated to be required in each of the next five fiscal years to meet sinking fund requirements are:
Government
Service
Organizations a

 Government
Business
Enterprises

 Total

  2007-08 68,645  32,135  100,780 
  2008-09 71,645  30,205  101,850 
  2009-10 67,021  29,955  96,976 
  2010-11 61,061  29,955  91,016 
  2011-12 56,521  28,255  84,776 
    324,893  150,505  475,398 
  a   Each year includes contributions for U.S. dollar debt of $1.2 million.
2 Sinking fund earnings include gains on investment sales of $6.8 million (2006 - $34.4 million).
3 The redemption value is based on the market value of the sinking fund units at the date of redemption.
4 The market value of sinking funds, at March 31, 2007, is $1,287.7 million (2006 - $1,128.2 million).
Sinking fund assets have been invested as follows:
    2007 2006
  Long-term investments in securities of:
     Government of Saskatchewan; coupon interest range 4.2% to 10.2%; maturing in 5.8 to 33.2 years 432,662  321,332 
      Other provincial governments; coupon interest range 4.3% to 9.5%; maturing in 4.8 to 32.9 years 455,015  464,267 
     Government of Canada; coupon interest range 4.0% to 6.0%; maturing in 4.2 to 26.2 years 195,903  100,334 
     Government of the United States; coupon interest range 4.5% to 4.6%; maturing in 9.9 to 28.9 years 19,964  13,521 
  Cash, short-term investments and accrued interest a 151,746  205,646 
  Total Sinking Funds b 1,255,290  1,105,100 
  a  Cash, short-term investments and accrued interest include $0 (2006 — $19.6 million) Government of Saskatchewan securities and are disclosed net of $1.1 million (2006 — $1.3 million) in liabilities.
  b  Included in total sinking funds are U.S. dollar cash, investments and accrued interest converted to $211.4 million Canadian (2006 — $203.9 million) at the exchange rate in effect at March 31, 2007 of 1.1529 (2006 — 1.1671).
Government of Saskatchewan - 2006-07 Public Accounts 69

Summary Financial Statements

Guaranteed Debt       Schedule 11  
As at March 31, 2007  
(thousands of dollars)  


2007

 2006

The Farm Financial Stability Act                
  Breeder and Feeder associations       25,195     26,123  
The Agricultural Credit Corporation of Saskatchewan Act                
  BSE Livestock Loan Guarantee Program       13,983     22,040  
The NewGrade Energy Inc. Act                
  NewGrade Energy Inc.       6,111     17,684  
The Crown Corporations Act, 1993                
  NewGrade Energy Inc.       4,675     13,520  
Other       12,587     15,212  
Total Guaranteed Debt 1       62,551     94,579  
1 In addition to the amount shown, there is a contingent liability for interest accrued on these items. Also, the Government has guaranteed debt, denominated in U.S. dollars, issued by Saskferco Products Inc. The debt of $24.2 million Canadian is fully offset by Saskferco Products Inc.‘s equity in a sinking fund.

Total guaranteed debt is net of a loss provision of $5.0 million (2006 — $7.1 million).

Breeder and Feeder Associations

The Government provides guarantees to lenders who make loans to production associations. The Government guarantees repayment of 25 per cent of the outstanding loan balance at the time of a first default on any advance, plus accrued interest as of the time that payment is to be made on the guarantee. Guarantees for each cattle association are limited to $6 million under both the breeder and feeder options. Guarantees for each bison association are limited to $5 million under the feeder option. Guarantees for each sheep association are limited to $4 million under both the breeder and feeder options.

BSE Livestock Loan Guarantee Program

The Government has guaranteed certain loans of livestock producers affected by export market restrictions on cattle. The loans are due in 2009.

NewGrade Energy Inc. (NewGrade)

The Government has guaranteed certain long-term debt of NewGrade to a maximum of $360 million. A significant portion of this guarantee relates to U.S. denominated debt. Thus, the amount of the guarantee is influenced by changes in the value of the U.S. dollar relative to the Canadian dollar.

The Government has also indemnified the Government of Canada for its guarantee of NewGrade’s long-term debt, to a maximum of $275 million.

70 Government of Saskatchewan - 2006-07 Public Accounts

Summary Financial Statements

Pension Liabilities       Schedule 12  
As at March 31, 2007  
(thousands of dollars)  


2007
 2006
TSP 1 PSSP Others Total Total
Accrued benefit obligation,                                  
  beginning of year       4,825,284     1,763,072     355,175     6,943,531     6,102,619  
Current benefit cost       57,101     20,360     4,428     81,889     73,663  
Plan amendment       --     90,000     433     90,433     --  
Interest cost       263,817     90,349     15,838     370,004     382,590  
Actuarial (gains) losses       --     (3,581 )   986     (2,595 )   742,256  
Joint defined benefit plan (SHEPP) 2       --     --     (41,168 )   (41,168 )   24,189  
Benefit payments       (285,642 )   (105,376 )   (15,427 )   (406,445 )   (381,786 )
Accrued Benefit Obligation, End of Year       4,860,560     1,854,824     320,265     7,035,649     6,943,531  
Plan assets, beginning of year       1,460,911     --     184,748     1,645,659     1,742,130  
Return on plan assets       97,303     --     12,816     110,119     122,044  
Employer contributions       115,477     100,054     5,061     220,592     196,376  
Employee contributions       15,696     5,322     438     21,456     22,504  
Plan expenses       (3,905 )   --     (597 )   (4,502 )   (7,255 )
Actuarial gains (losses)       --     --     718     718     (48,354 )
Benefit payments       (285,642 )   (105,376 )   (15,427 )   (406,445 )   (381,786 )
Plan Assets, End of Year 3       1,399,840     --     187,757     1,587,597     1,645,659  
        3,460,720     1,854,824     132,508     5,448,052     5,297,872  
Unamortized estimation adjustments 4       (616,163 )   (135,372 )   (12,050 )   (763,585 )   (985,886 )
Total Pension Liabilities 5       2,844,557     1,719,452     120,458     4,684,467     4,311,986  
1 The TSP accrued benefit obligation includes a liability of $32.0 million (2006 —$35.9 million) relating to the TSP disability provision. The TSP’s actual rate of return on plan assets was 13.3 per cent (2006 — 16.0 per cent).
2 The joint defined benefit plan includes only the Government’s employer portion of the pension liability. At December 31, 2006, the SHEPP had a total accrued benefit obligation of $2,676.8 million (2005 — $2,469.6 million) and pension fund assets of $2,697.1 million (2005 — $2,407.5 million) at market related values and unamortized estimation adjustment gains of $72.8 million (2005 — $77.5 million). The market value of the pension fund investments was $2,862.0 million (2005 — $2,536.1 million). Of this amount 34.2 per cent (2005 — 38.0 per cent) was invested in fixed income securities and 64.6 per cent (2005 — 60.9 per cent) in equity investments. The Government and member contributions to the plan totalled $69.6 million (2005 — $60.3 million) and $67.9 million (2005 — $59.5 million) respectively. Benefit payments from the plan totalled $91.8 million (2005 — $81.4 million).
3 At March 31, 2007, the market value of defined benefit plan investments was $1,994.4 million (2006 — $1,935.9 million). Of this amount 44.0 per cent (2006 — 43.2 per cent) was invested in fixed income securities and 45.2 per cent (2006 — 49.1 per cent) in equity investments.
4 Amortized to pension expense over periods ranging from 1 to 13 years, which is the expected average remaining service life of active plan members at the time the estimation adjustments arose.
5 The total pension liabilities are based on the latest actuarial valuations extrapolated to March 31, 2007 for the defined benefit plans and December 31, 2006 for the joint defined benefit plan. Changes in assumptions can result in significantly higher or lower estimates of pension liabilities. A one per cent decrease in the discount rate would result in a $610.3 million and $231.9 million increase in the pension liabilities for the TSP and the PSSP respectively, and a one per cent increase would result in a $500.2 million and $191.0 million decrease in the pension liabilities for the TSP and the PSSP respectively.

Government of Saskatchewan - 2006-07 Public Accounts 71

Summary Financial Statements

Tangible Capital Assets       Schedule 13  
As at March 31, 2007  
(thousands of dollars)  


2007
 2006
Land &
Improve-
ments		 Buildings &
Improve-
ments		 Machinery
&
Equipment		 Trans-
portation
Equipment		 Office &
Information
Technology		 Infra-
structure		 Total Total
Estimated useful life

 3 years-
Indefinite

 3-50 years

 2-33 years

 3-40 years

 2-25 years

 3-60 years

    
Opening Net Book Value of                                                    
  Tangible Capital Assets 1       195,505     1,434,097     227,006     142,905     116,586     1,848,786     3,964,885     3,941,915  
 
Opening cost       212,980     2,552,218     827,825     249,577     330,408     3,405,074     7,578,082     7,456,523  
Acquisitions       1,632     144,798     69,288     58,861     31,712     144,284     450,575     407,492  
Write downs       (750 )   (541 )   (15,455 )   --     (912 )   (272 )   (17,930 )   (187,177 )
Disposals       (1,691 )   (8,236 )   (5,761 )   (26,663 )   (13,861 )   (26,543 )   (82,755 )   (98,756 )
Closing cost 2       212,171     2,688,239     875,897     281,775     347,347     3,522,543     7,927,972     7,578,082  
 
Opening accumulated amortization       17,475     1,118,121     600,819     106,672     213,822     1,556,288     3,613,197     3,514,608  
Annual amortization       1,449     95,393     52,121     13,970     25,369     97,083     285,385     298,092  
Write downs       (140 )   (398 )   (15,278 )   --     (908 )   (10 )   (16,734 )   (114,886 )
Disposals       (61 )   (6,233 )   (5,136 )   (15,145 )   (13,789 )   (26,489 )   (66,853 )   (84,617 )
Closing accumulated amortization       18,723     1,206,883     632,526     105,497     224,494     1,626,872     3,814,995     3,613,197  
 
Closing Net Book Value of                                                    
  Tangible Capital Assets 1       193,448     1,481,356     243,371     176,278     122,853     1,895,671     4,112,977     3,964,885  
1 Net book value of tangible capital assets does not include the following:
  • works of art and historical treasures, such as the Legislative Building;
  • intangible assets and items inherited by right of the Crown, such as Crown lands, forests, water and mineral resources, which are not recognized in these financial statements; and
  • capital assets held by government business enterprises, as disclosed in schedule 4.
2 Closing cost includes work-in-progress of $151.7 million (2006 — $79.4 million).






72 Government of Saskatchewan - 2006-07 Public Accounts

Summary Financial Statements

Revenue       Schedule 14  
For the Year Ended March 31, 2007  
(thousands of dollars)  


2007 2006
Taxation                
Individual income       1,668,538     1,447,905  
Sales       1,079,794     1,112,350  
Corporation income       554,001     393,629  
Corporation capital       513,458     524,650  
Fuel       383,576     376,426  
Tobacco       190,334     171,107  
Other       96,056     90,908  
Total Taxation       4,485,757     4,116,975  
 
Non-renewable Resources                
Oil       1,318,852     1,124,952  
Natural gas       165,131     269,074  
Potash       161,729     277,967  
Other       48,540     49,107  
Total Non-renewable Resources       1,694,252     1,721,100  
 
Other Own-source Revenue                
Fees                
   Motor vehicle licensing       138,908     135,183  
   Health care       124,269     124,648  
   Subsidized housing rental       84,419     81,321  
   Other       375,103     365,929  
Investment income                
   Interest and dividends       163,540     127,230  
   Earnings from equity investments (schedule 18)       97,726     148,602  
   Gain on sale of other investments (schedule 18)       5,114     7,884  
Insurance       108,135     127,580  
Other       333,781     332,695  
Total Other Own-source Revenue       1,430,995     1,451,072  
Total Own-source Revenue       7,611,004     7,289,147  
 
Transfers from the Federal Government                
Canada Health Transfer       716,775     659,558  
Canada Social Transfer       323,599     298,756  
Crop insurance contributions       76,110     109,586  
Housing subsidy       69,762     63,329  
Equalization       12,723     88,672  
Other       353,121     238,652  
Total Transfers from the Federal Government       1,552,090     1,458,553  
Total Revenue       9,163,094     8,747,700  
Government of Saskatchewan - 2006-07 Public Accounts 73

Summary Financial Statements

Debt Charges       Schedule 15  
For the Year Ended March 31, 2007  
(thousands of dollars)  


2007

 2006

Total interest costs       1,030,333     1,097,687  
Interest reimbursed from government business enterprises       (257,214 )   (267,182 )
Net foreign exchange loss       2,787     2,167  
Other costs       6,870     7,968  
Total Debt Charges       782,776     840,640  

Expense by Object       Schedule 16  
For the Year Ended March 31, 2007  
(thousands of dollars)  


2007

 2006

Transfers       3,787,818     3,544,449  
Salaries and benefits       2,889,969     2,604,710  
Operating costs       1,283,851     1,175,220  
Debt charges       782,776     840,640  
Tangible capital asset amortization       285,385     298,092  
Other       260,636     323,424  
Total Expense       9,290,435     8,786,535  

Comparison of Estimated to Actual Results       Schedule 17  
For the Year Ended March 31, 2007  
(thousands of dollars)  


2007
 2006
Estimated 1

 Actual 1

 Actual

General Revenue Fund       101,908     292,704     400,466  
Fiscal Stabilization Fund       (75,000 )   --     139,000  
Saskatchewan Infrastructure Fund       --     105,090     --  
Other Treasury Board Organizations       (326,633 )   (97,363 )   (129,096 )
Treasury Board Organizations 2       (299,725 )   300,431     410,370  
CIC Board Organizations 2       149,722     237,252     80,373  
        (150,003 )   537,683     490,743  
Not-for-Profit Insurance Organizations       37,063     36,265     188,233  
Surplus (Deficit)       (112,940 )   573,948     678,976  
1 Presented on the basis of the summary financial budget, which is included in the Provincial Budget.
2 Net of dividends from other government organizations.

74 Government of Saskatchewan - 2006-07 Public Accounts

Summary Financial Statements

Gains and Losses on Other Investments       Schedule 18  
For the Year Ended March 31, 2007  
(thousands of dollars)  


2007

 2006

Earnings (Losses) from Equity Investments                
NewGrade Energy Inc. 1       79,844     103,318  
Saskferco Products Inc.       15,136     27,167  
Big Sky Farms Inc.       2,281     6,698  
Meadow Lake OSB Limited Partnership       1,751     11,939  
Other       (1,286 )   (520 )
        97,726     148,602  
Gain on sale of other investments       5,114     7,884  
Recovery of (provision for) loss       21,322     (20,127 )
Net Gain on Other Investments       124,162     136,359  
1 Net of purchase premium amortization of $1.7 million (2006 - $1.7 million).

Other Non-cash Items Included in Surplus       Schedule 19  
For the Year Ended March 31, 2007  
(thousands of dollars)  


2007

 2006

Amortization of tangible capital assets (schedule 13)       285,385     298,092  
Net loss on disposal of tangible capital assets       8,713     8,350  
Amortization of foreign exchange loss       2,787     2,166  
Write downs of tangible capital assets       1,196     72,291  
Net (reduction) addition to provision for loss on loans and mortgages       (4,544 )   5,498  
Earnings retained in sinking funds       (48,054 )   (64,775 )
Net gain on other investments       (124,162 )   (136,359 )
Total Other Non-cash Items Included in Surplus       121,321     185,263  


Net Change in Non-cash Operating Activities       Schedule 20  
For the Year Ended March 31, 2007  
(thousands of dollars)  


2007

 2006

(Increase) decrease in accounts receivable       (66,195 )   39,219  
Decrease in inventories held for resale       101     13,856  
Decrease in deferred charges       6,607     25,572  
Increase (decrease) in accounts payable and accrued liabilities       92,674     (17,895 )
Increase in unearned revenue       8,911     17,279  
(Increase) decrease in prepaid expenses       (2,908 )   4,753  
Increase in inventories held for consumption       (10,045 )   (335 )
Net Change in Non-cash Operating Activities       29,145     82,449  
Government of Saskatchewan - 2006-07 Public Accounts 75

Summary Financial Statements

Segment Disclosure          
For the Year Ended March 31, 2007  
(thousands of dollars)  


Treasury Board
Organizations
2007

 2006

Revenue                
Taxation       4,485,757     4,116,975  
Non-renewable resources       1,694,252     1,721,100  
Transfers from Government entities       167,000     221,000  
Other own-source revenue       1,021,006     988,612  
Transfers from the federal government       1,475,980     1,348,967  
Total Revenue       8,843,995     8,396,654  
Expense                
Agriculture       389,997     457,114  
Community development       318,514     294,495  
Debt charges       773,123     822,403  
Economic development       137,094     122,804  
Education       1,691,705     1,413,920  
Environment and natural resources       195,463     146,353  
Health       3,379,066     3,221,618  
Protection of persons and property       362,214     320,636  
Social services and assistance       842,648     827,139  
Transportation       351,518     308,690  
Other       507,157     432,061  
Total Expense       8,948,499     8,367,233  
Surplus (deficit) from government service organizations       (104,504 )   29,421  
Income from government business enterprises       404,935     380,949  
Surplus       300,431     410,370  

The Summary financial statements segments are based on the accountability and control relationships between the Government and the various organizations within the government reporting entity.

Treasury Board organizations include the General Revenue Fund, the Fiscal Stabilization Fund, the Saskatchewan Infrastructure Fund and organizations such as Regional Health Authorities and the Liquor and Gaming Authority.

CIC Board organizations are agencies that are responsible to the Crown Investment Corporation of Saskatchewan (CIC) and include organizations such as Saskatchewan Power Corporation, Saskatchewan Telecommunications Holding Corporation and Investment Saskatchewan Inc.

Not-for-profit insurance organizations are intended to be actuarially sound over the long-term. They typically adjust their rates to break even over the longer term and include Saskatchewan Auto Fund, Saskatchewan Crop Insurance Corporation, Crop Reinsurance Fund of Saskatchewan and Workers’ Compensation Board (Saskatchewan).

Schedule 22 lists the organizations included in each segment.

76 Government of Saskatchewan - 2006-07 Public Accounts

Summary Financial Statements

        Schedule 21  
   
   


CIC Board Organizations
 Not-for-Profit Insurance
Organization
 Eliminations
    
2007

 2006

 2007

 2006

 2007

 2006

 2007

 2006

  --     --     --     --     --     --     4,485,757     4,116,975  
  --     --     --     --     --     --     1,694,252     1,721,100  
  --     --     86,237     98,863     (253,237 )   (319,863 )   --     --  
  321,794     353,711     88,195     108,749     --     --     1,430,995     1,451,072  
  --     --     76,110     109,586     --     --     1,552,090     1,458,553  
  321,794     353,711     250,542     317,198     (253,237 )   (319,863 )   9,163,094     8,747,700  
 
  --     1,052     228,475     152,778     (81,757 )   (98,863 )   536,715     512,081  
  --     --     --     --     --     --     318,514     294,495  
  7,930     11,342     6,203     6,895     (4,480 )   --     782,776     840,640  
  90,663     248,586     --     --     --     --     227,757     371,390  
  --     --     --     --     --     --     1,691,705     1,413,920  
  17,031     27,810     --     --     --     --     212,494     174,163  
  --     --     --     --     --     --     3,379,066     3,221,618  
  37,382     35,614     --     --     --     --     399,596     356,250  
  --     --     --     --     --     --     842,648     827,139  
  21,116     20,178     --     --     --     --     372,634     328,868  
  19,373     13,910     --     --     --     --     526,530     445,971  
  193,495     358,492     234,678     159,673     (86,237 )   (98,863 )   9,290,435     8,786,535  
  128,299     (4,781 )   15,864     157,525     (167,000 )   (221,000 )   (127,341 )   (38,835 )
  275,953     306,154     20,401     30,708     --     --     701,289     717,811  
  404,252     301,373     36,265     188,233     (167,000 )   (221,000 )   573,948     678,976  
Government of Saskatchewan - 2006-07 Public Accounts 77

Summary Financial Statements

Government Reporting Entity       Schedule 22  
   
   

Government Service Organizations (Consolidated)

Agricultural Credit Corporation of Saskatchewan
Agricultural Implements Board
Agri-Food Innovation Fund
Beef Development Board
Board of Governors, Uranium City Hospital
Cattle Marketing Deductions Fund
Commercial Revolving Fund
Community Initiatives Fund
Correctional Facilities Industries Revolving Fund
Crop Reinsurance Fund of Saskatchewan 8b
Crown Investments Corporation of Saskatchewan
   (non-consolidated) 6 7c 8a
Extended Health Care Plan 4
Extended Health Care Plan for Certain Other Employees 7c
First Nations and Métis Fund Inc. 1 7c 8a
Fiscal Stabilization Fund
Fish and Wildlife Development Fund
General Revenue Fund
Government House Foundation
Gradworks Inc. 7c 8a
Health Quality Council
Highways Revolving Fund 2
Horned Cattle Fund
Individual Cattle Feeder Loan Guarantee Provincial Assurance Fund
Information Services Corporation of Saskatchewan 7c 8a
Investment Saskatchewan Inc. 7c 8a
Law Reform Commission of Saskatchewan
Livestock Services Revolving Fund
Milk Control Board 7c
North Sask Laundry and Support Services Ltd. 3
Northern Revenue Sharing Trust Account 7c
Oil and Gas Environmental Fund
Operator Certification Board
Pastures Revolving Fund
Prairie Agricultural Machinery Institute
Public Employees Benefits Agency Revolving Fund
Public Employees Dental Fund 7c
Public Employees Disability Income Fund 7c
Public Employees Group Life Insurance Fund 7c
Queen’s Printer Revolving Fund
Regional Colleges 7a
Regional Health Authorities
Resource Protection and Development Revolving Fund
Saskatchewan Agricultural Stabilization Fund
Saskatchewan Apprenticeship and Trade Certification Commission 7a 		  Saskatchewan Archives Board
Saskatchewan Arts Board
Saskatchewan Association of Health Organizations
Saskatchewan Cancer Agency 5a
Saskatchewan Centre of the Arts Fund
Saskatchewan Communications Network Corporation
Saskatchewan Crop Insurance Corporation 8b
Saskatchewan Development Fund Corporation 7c 8a
Saskatchewan Grain Car Corporation 7b
Saskatchewan Health Information Network
Saskatchewan Health Research Foundation
Saskatchewan Heritage Foundation
Saskatchewan Housing Corporation 7c
Saskatchewan Infrastructure Fund 1
Saskatchewan Institute of Applied Science and Technology 7a
Saskatchewan Legal Aid Commission
Saskatchewan Lotteries Trust Fund for Sport, Culture and Recreation
Saskatchewan Opportunities Corporation 7c 8a
Saskatchewan Research Council
Saskatchewan Snowmobile Fund
Saskatchewan Student Aid Fund
Saskatchewan Transportation Company 7c 8a
Saskatchewan Water Corporation 7c 8a
Saskatchewan Watershed Authority
Saskatchewan Western Development Museum
Sask911 Account
St. Louis Alcoholism Rehabilitation Centre
Technology Supported Learning Revolving Fund 5b
Training Completions Fund
Transportation Partnerships Fund
Victims’ Fund
Water Appeal Board

Government Business Enterprises (Modified Equity)
Liquor and Gaming Authority
Municipal Financing Corporation of Saskatchewan 7c
Saskatchewan Auto Fund 7c 8b
Saskatchewan Gaming Corporation
Saskatchewan Government Growth Fund
   Management Corporation 7c 8a
Saskatchewan Government Insurance 7c 8a
Saskatchewan Power Corporation 7c 8a
Saskatchewan Telecommunications Holding Corporation 7c 8a
SaskEnergy Incorporated 7c 8a
Workers’ Compensation Board (Saskatchewan) 7c 8b

1 Organization established during 2006-07.
2 Organization wound up during 2006-07.
3 Organization determined to be part of the government reporting entity during 2006-07.
4 Organization determined to be a trust during 2006-07 and, as a result, it is no longer part of the government reporting entity.
5 Name changed during 2006-07 from: a Saskatchewan Cancer Foundation; b Saskatchewan Correspondence School Revolving Fund.
6 Includes the financial activities of the organization’s subsidiaries, CIC Economic Holdco and CIC Equity Holding Corporation, which were established during 2006-07.
7 The year-ends of certain organizations differ from March 31, 2007: a June 2006; b July 2006; c December 2006
8 For segment disclosure (schedule 21) certain organizations are classified into categories other than Treasury Board Organizations as follows: a CIC Board Organizations; b Not-for-Profit Insurance Organizations

78 Government of Saskatchewan - 2006-07 Public Accounts










Supplementary Information (unaudited)































Supplementary Information

Fiscal Stabilization Fund
Schedule of Tranfers and Accumulated Balance		          
For the Year Ended March 31, 2007  
(thousands of dollars)  

2007
 2006
Budget

 Actual

 Actual

Balance, beginning of year       887,500     887,500     748,500  
Transfer from (to) the General Revenue Fund       (75,000 )   --     139,000  
Balance, End of Year       812,500     887,500     887,500  

The Fiscal Stabilization Fund (Fund) was established April 1, 2000, by The Fiscal Stabilization Fund Act. Its purpose is to stabilize the fiscal position of the Government to facilitate long-term planning. Stabilization occurs through transfers between the Fund and the General Revenue Fund (GRF), as approved from time to time by Treasury Board.

Transfers to the Fund from the GRF are statutory disbursements. Amounts transferred to the GRF from the Fund are available for expenses subsequent to receiving required approval from the Legislative Assembly.

In January 2007, the GRF extinguished its liability to the Fund by transferring cash and temporary investments with a value of $887.5 million to the Fund.

The Fund balance is invested in temporary investments that generally carry a term of less than 90 days. At March 31, 2007, these investments had an average effective interest rate of 4.30 per cent.

In accordance with The Fiscal Stabilization Fund Act, all earnings on the Fund’s investments are credited to the GRF. For 2006-07, this amount was $7.5 million, however the Fund only held interest bearing assets from January 18, 2007 until March 31, 2007. Prior to January 18, 2007, the Fund balance was a non-interest bearing amount receivable from the GRF.

Government of Saskatchewan - 2006-07 Public Accounts 81

Summary Financial Statements

Saskatchewan Infrastructure Fund
Schedule of Tranfers and Accumulated Balance		          
For the Year Ended March 31, 2007  
(thousands of dollars)  

2006
 2007
Balance
at March 31

 Transfers
from the GRF

 Transfers
to the GRF

 Balance
at March 31

Building Communities Program       --     100,000     12,087     87,913  
Municipal Infrastructure       --     17,177     --     17,177  
Balance, End of Year       --     117,177     12,087     105,090  

The Saskatchewan Infrastructure Fund (Fund) was established December 6, 2006, by The Infrastructure Fund Act. Its purpose is to provide moneys that may be used to support the provision and maintenance of infrastructure in Saskatchewan. This occurs through transfers between the Fund and the General Revenue Fund (GRF), as approved from time to time by Treasury Board.

Transfers to the Fund from the GRF are attached to a specific purpose. Amounts transferred to the GRF from the Fund are allocated through a legislated appropriation. Transfers to/from the Fund are recorded as expenses/revenues of the GRF.

The Fund balance is invested in temporary investments that generally carry a term of less than 90 days. At March 31, 2007, these investments had an average effective interest rate of 4.32 per cent.

In accordance with The Infrastructure Fund Act, all earnings on the Fund’s investments are credited to the GRF. For 2006-07, this amount was $0.4 million.

No comparison to budgeted amounts has been made because the Fund was not part of the 2006-07 budget.

82 Government of Saskatchewan - 2006-07 Public Accounts

Supplementary Information

General Revenue Fund - Public Issue Debentures
 As at March 31, 2007
(dollars)

Date of
Issue		 Date of
Maturity		 Interest
Rate
%		 Interest
Payments		 Currency Purpose of
Issue		 Amount
Outstanding		 Total Issue
Outstanding		 Equity of
Applicable
Sinking Fund		 Sinking Fund
Contribution
2006-07
May 15/97 May 15/07 6.65 Semiannual Can. SaskEnergy 30,000,000
 30,000,000 3,799,651 300,000
(Canadian medium term note; Non-callable; This book-based note is
held in the Canadian Depository for Securities)
 
July 15/02 July 15/07 4.00 Annual Can. GRF 18,918,000
 18,918,000 -- --
(Savings Bond; Redeemable annually at the option of the holder or
anytime on the death of the holder; The Province reserves the right
to increase the interest rate after July 14, 2003; Payable at any
Saskatchewan branch of a chartered bank, trust company and the
Credit Union Central of Saskatchewan)
 
Jan. 31/02 Sept. 6/07 5.00 Semiannual Can. GRF 400,000,000
 400,000,000 -- --
(Non-callable; This book-based note is held in the Canadian Depository
for Securities)
 
March 2/83 March 1/08 9.00 Annual Can. SaskEnergy 50,000,000
 50,000,000 -- --
(Non-callable; Payable in London and Toronto)
 
March 15/93 March 15/08    7.698 Semiannual Can. SaskPower 262,989,200
 262,989,200 55,312,227 2,630,000
(The original 7.125% 194,000,000 U.S. dollar debentures have been swapped
into Canadian dollars with an effective interest rate of 7.698%; Non-callable;
Payable in New York)
 
Nov. 28/97 May 28/08 5.50 Semiannual Can. GRF 20,000,000
 20,000,000 2,533,101 200,000
(Canadian medium term note; Non-callable; This book-based note is
held in the Canadian Depository for Securities)
 
Feb. 26/98 June 2/08 5.50 Semiannual Can. GRF
SaskEnergy
Sask Housing		 368,500,000
25,000,000
6,500,000

400,000,000

48,837,293

4,000,000
(Non-callable; This book-based note is held in the Canadian Depository
for Securities)
 
July 15/03 July 15/08 4.00 Annual Can. GRF 28,155,300
 28,155,300 -- --
(Savings Bond; Redeemable annually at the option of the holder or
any time on the death of the holder; The Province reserves the right to
increase the interest rate after July 14, 2004; Payable at any
Saskatchewan branch of a chartered bank, trust company and the Credit
Union Central of Saskatchewan)
 
Sept. 24/03 Sept. 5/08 3.90-5.75 Semiannual Can. Sask Crop 50,000,000
 50,000,000 -- --
(Canadian medium term note; Extendible at the option of the holder to
September 5, 2033; This note pays interest at 3.90% to September 5,
2008, and 5.75% thereafter; This book-based note is held in the
Canadian Depository for Securities)
 
Feb. 13/02 Feb. 13/09 5.05-6.30 Semiannual Can. Sask Housing
GRF		 24,500,000
5,500,000
30,000,000
27,716,358
673,750
(Canadian medium term note; Extendible at the option of the holder to
February 13, 2032; This note pays interest at 5.05% to February 13, 2009,
and 6.30% thereafter; This book-based note is held in the Canadian
Depository for Securities)
 
Aug. 3/04 June 17/09 4.00-5.50 Semiannual Can. GRF 26,000,000
 26,000,000 567,517 260,000
(Canadian medium term note; If not redeemed by the holder on
June 17, 2009, this note matures on June 17, 2019; This note pays
interest of 4.00% to June 17, 2009 and 5.50% thereafter; This book-
based note is held in the Canadian Depository for Securities)
 
July 15/04 July 15/09 4.00 Annual Can. GRF 5,891,100
 5,891,100 -- --
(Savings Bond; Redeemable annually at the option of the holder or
any time on the death of the holder; The Province reserves the right to
increase the interest rate after July 14, 2005; Payable at any
Saskatchewan branch of a chartered bank, trust company and the Credit
Union Central of Saskatchewan)
 
Government of Saskatchewan - 2006-07 Public Accounts 83

Supplementary Information

General Revenue Fund - Public Issue Debentures (continued)

Date of
Issue		 Date of
Maturity		 Interest
Rate
%		 Interest
Payments		 Currency Purpose of
Issue		 Amount
Outstanding		 Total Issue
Outstanding		 Equity of
Applicable
Sinking Fund		 Sinking Fund
Contribution
2006-07
Sept. 24/02 Sept. 24/09 4.75 Annual Can. GRF
Sask Crop
Sask Water		 195,500,000  
50,000,000 
4,500,000 

250,000,000

--  

--
(Euro medium term note; Non-callable; Payable in London)
 
Nov. 12/99 Nov. 12/09 6.50 Semiannual Can. GRF 250,000,000  
 250,000,000 22,156,242   2,500,000
(Non-callable; This book-based note is held in the Canadian Depository
for Securities)
 
Jan. 18/90 Jan. 18/10 10.00 Semiannual Can. GRF 300,000,000  
 300,000,000 103,079,001   3,000,000
(Non-callable; Payable at any Canadian branch of the Royal Bank of
Canada)
 
July 15/05 July 15/10 4.00 Annual Can. GRF 17,506,100  
 17,506,100 --   --
(Savings Bond; Redeemable annually at the option of the holder or any
time on the death of the holder; The Province reserves the right to increase
the interest rate after July 14, 2006; Payable at any Saskatchewan branch
of a chartered bank, trust company and the Credit Union Central of
Saskatchewan)
 
Sept. 1/00 Sept. 1/10 6.15 Semiannual Can. GRF
SaskTel
SaskEnergy		 380,000,000  
90,000,000  
80,000,000  

550,000,000

40,852,334  

5,500,000
(Non-callable; This book-based note is held in the Canadian Depository
for Securities)
 
July 15/06 July 15/11 4.00 Annual Can. GRF 256,412,700  
 256,412,700 --   --
(Savings Bond; Redeemable annually at the option of the holder or any time on the death of the holder; The Province reserves the right to increase the interest rate after July 14, 2007; Payable at any Saskatchewan branch of a chartered bank, trust company and the Credit Union Central of Saskatchewan)
 
June 10/03 Sept. 5/11 4.75-5.80 Semiannual Can. GRF 104,500,000  
 104,500,000 5,473,121   1,045,000
(Canadian medium term note; Extendible at the option of the holder to
September 5, 2033; This note pays interest at 4.75% to September 5,
2011, and 5.80% thereafter; This book-based note is held in the
Canadian Depository for Securities)
 
Sept. 20/02 Dec. 3/12 5.25 Semiannual Can. GRF
SaskEnergy		 300,000,000  
50,000,000  
350,000,000
15,872,113  
3,500,000
(Non-callable; This book-based note is held in the Canadian Depository
for Securities)
 
Feb. 2/93 Feb. 1/13 7.613 Semiannual Can. GRF 568,212,000  
 568,212,000 119,711,263   5,682,120
(The original 8% 400,000,000 U.S. dollar debentures have been swapped
into Canadian dollars at an interest rate of 7.613%; Non-callable; Payable
in New York)
 
June 17/03 June 17/13 4.75 Annual Can. GRF
MFC		 195,000,000  
5,000,000  
200,000,000
6,808,435  
2,000,000
(Euro medium term note; Non-callable; Payable in London)
 
July 20/93 July 15/13 7.375
7.809
7.753		 Semiannual U.S.
Can.
Can.		 GRF
SaskPower
GRF		 50,000,000*
97,147,500  
228,639,500  

375,787,000		 41,456,794*

29,816,680  

3,907,900
(175,000,000 U.S. dollars of the GRF's 225,000,000 U.S. dollar share of the
7.375% debenture issue has been swapped into Canadian dollars at an
interest rate of 7.753%. Interest payments on the remaining 50,000,000 U.S.
dollars have been swapped into Canadian dollars at an interest rate of 7.912%;
Sask Power's 75,000,000 U.S. dollar share of the 7.375% debenture issue
has been swapped into Canadian dollars at an interest rate of 7.809%;
Non-callable; Payable in New York)
 
Sept. 30/03 Dec. 3/13 4.90 Semiannual Can. GRF 200,000,000  
 200,000,000 6,555,724   2,000,000
(Non-callable; This book-based note is held in the Canadian Depository
for Securities)
 
84 Government of Saskatchewan - 2006-07 Public Accounts

Supplementary Information

General Revenue Fund - Public Issue Debentures (continued)

Date of
Issue		 Date of
Maturity		 Interest
Rate
%		 Interest
Payments		 Currency Purpose of
Issue		 Amount
Outstanding		 Total Issue
Outstanding		 Equity of
Applicable
Sinking Fund		 Sinking Fund
Contribution
2006-07
March 14/91 April 10/14 10.25 Semiannual Can. GRF 583,916,000  
 583,916,000 168,637,206   5,839,160
(Non-callable; Payable at any Canadian branch of the Royal Bank of
Canada)
 
June 22/04 June 3/14 5.25 Semiannual Can. GRF
SaskEnergy		 250,000,000  
50,000,000  
300,000,000
6,548,267  
3,000,000
(Non-callable; This book-based note is held in the Canadian Depository
for Securities)
 
Dec. 1/65 Dec. 1/15 5.125 Semiannual Can. GRF
U.of S.		 852,245  
238,457  
1,090,702
--  
--
(Payable in blended semi-annual payments of principal and interest
totalling $76,399.60; Payable in whole or in part any time prior to
December 1, 2015, without penalty; Payable in Ottawa)
 
June 3/05 Dec. 3/15 4.25 Semiannual Can. GRF
SaskEnergy
MFC		 145,000,000  
50,000,000  
5,000,000  

200,000,000

4,195,609  

2,000,000
(Non-callable; This book-based note is held in the Canadian Depository
for Securities)
 
Nov. 15/05 Jan. 15/16 4.305 Semiannual Can. GRF 274,654,700  
 274,654,700 2,785,165   2,746,575
(This issue was reopened on December 31, 2006, and an additional
100,000,000 Swiss Franc debentures were sold; The original 2.125%
300,000,000 Swiss Franc debentures have been swapped into Canadian
dollars at an interest rate of 4.305%; Non-callable; Payable in Zurich)
 
Aug. 23/06 Aug. 23/16 4.50 Semiannual Can. GRF 300,000,000  
 300,000,000 --   --
(Non-callable; This book-based note is held in the Canadain Depository
for Securities)
 
Sept. 17/96 Sept. 17/16 7.93 Semiannual Can. Sask Water
GRF		 1,949,000  
11,394,000  
13,343,000
--  
--
(Canadian medium term serial note; Payable in annual instalments;
 Non-callable; Payable in Regina)
 
June 17/04 June 17/19 5.00 Semiannual Can. GRF 33,000,000  
 33,000,000 720,309   330,000
(Canadian medium term note; After June 17, 2014, this note pays interest
at the three month bankers' acceptance rate less 0.245%; Non-callable;
This book-based note is held in the Canadian Depository for Securities)
 
Dec. 20/90 Dec. 15/20 9.375
9.653
10.08
9.965		 Semiannual U.S.
Can.
Can.
Can.		 GRF
GRF
SaskTel
SaskPower		 45,000,000*
65,972,500  
126,600,000  
128,797,500  


366,370,000		 27,089,275*


48,994,971  


3,753,500
(55,000,000 U.S. dollars of the GRF's 100,000,000 U.S. dollars share of the
9.375% debenture issue has been swapped into Canadian dollars at an
interest rate of 9.653%. Interest payments on the remaining 45,000,000 U.S.
dollars have been swapped into Canadian dollars at an interest rate of
9.653%. SaskTel's 100,000,000 U.S. dollars share of the 9.375% debenture
issue has been swapped into Canadian dollars at an interest rate of 10.08%;
Sask Power's 100,000,000 U.S. dollars share of the 9.375% debenture issue
has been swapped into Canadian dollars at an interest rate of 9.965%;
Non-callable; Payable in New York)
 
Feb. 26/91 Feb. 15/21 9.254
9.125		 Semiannual Can.
U.S.		 GRF
GRF		 147,600,000  
80,000,000*
227,600,000		 5,100,840  
53,430,278*		 2,460,000
--
(120,000,000 U.S. dollars of this debenture has been swapped into Canadian
dollars at an interest rate of 9.254%. Interest payments on the remaining
80,000,000 U.S. dollars have been swapped into Canadian dollars at an
interest rate of 9.254%; Non-callable; Payable in New York)
 
Feb. 4/92 Feb. 4/22 9.60 Semiannual Can. SaskPower
GRF		 240,000,000  
15,000,000  
255,000,000
65,146,600  
2,550,000
(Non-callable; Payable at any Canadian branch of the Royal Bank of
Canada)
 
Government of Saskatchewan - 2006-07 Public Accounts 85

Supplementary Information

General Revenue Fund - Public Issue Debentures (continued)

Date of
Issue		 Date of
Maturity		 Interest
Rate
%		 Interest
Payments		 Currency Purpose of
Issue		 Amount
Outstanding		 Total Issue
Outstanding		 Equity of
Applicable
Sinking Fund		 Sinking Fund
Contribution
2006-07
July 21/92 July 15/22 8.50
8.942		 Semiannual U.S.
Can.		 GRF
SaskPower		 100,000,000*
256,320,000  
356,320,000		 61,356,959*
13,490,712  		 1,134,900**
2,563,200    
(Interest payments on the GRF's 100,000,000 U.S. dollar share of the 8.50%
debenture issue have been swapped into Canadian dollars at an interest
rate of 8.497%; Sask Power's 200,000,000 U.S. dollar share of the 8.50%
debenture issue has been swapped into Canadian dollars at an interest
rate of 8.942%; Non-callable; Payable in New York)
 
May 30/95 May 30/25 8.75 Semiannual Can. SaskPower
SaskEnergy		 100,000,000  
75,000,000  
175,000,000
29,737,986  
1,750,000    
(Non-callable; Payable at any Canadian branch of the Royal Bank of
Canada)
 
Dec. 4/98 March 5/29 5.75 Semiannual Can. GRF
SaskTel
SaskEnergy		 250,000,000  
75,000,000  
25,000,000  

350,000,000

31,924,183  

3,500,000    
(Non-callable; This book-based note is held in the Canadian Depository
for Securities)
 
March 24/99 March 5/29 5.60 Semiannual Can. SaskTel
SaskEnergy		 35,000,000  
25,000,000  
60,000,000
603,499  
600,000    
(Canadian medium term note; Non-callable; This book-based note is held in the
Canadian Depository for Securities)
 
Feb. 17/00 Jan. 25/30 6.25 Semiannual Can. GRF 25,000,000  
 25,000,000 2,188,527   250,000    
(Canadian medium term note; Non-callable; This book-based note is held
in the Canadian Depository for Securities)
 
Jan. 25/00 Jan. 25/30 6.35 Semiannual Can. GRF 199,995,000  
 199,995,000 16,750,456   2,000,000    
(Canadian medium term note; This book-based note is held in the Canadian
Depository for Securities)
 
Dec. 10/01 Sept. 5/31 6.40 Semiannual Can. GRF
SaskPower
SaskEnergy		 190,000,000  
300,000,000  
60,000,000  

550,000,000

31,525,746  

5,500,000    
(Non-callable; This book-based note is held in the Canadian Depository
for Securities)
 
May 12/03 Sept. 5/33 5.80 Semiannual Can. GRF
SaskPower		 150,000,000  
300,000,000  
450,000,000
15,053,621  
4,500,000    
(Non-callable; This book-based note is held in the Canadian Depository
for Securities)
 
Aug. 12/04 Sept. 5/35 5.60 Semiannual Can. GRF
SaskPower		 200,000,000  
200,000,000  
400,000,000
8,561,502  
4,000,000    
(Non-callable; This book-based note is held in the Canadian Depository
for Securities)
 
Feb. 15/05 March 5/37 5.00 Semiannual Can. SaskEnergy
SaskPower		 25,000,000  
400,000,000  
425,000,000
7,721,356  
4,250,000    
(Non-callable; This book-based note is held in the Canadian Depository
for Securities)
 
May 26/06 June 1/40 4.75 Semiannual Can. GRF
SaskPower		 500,000,000  
100,000,000  
600,000,000
--  
--    
($200,000,000 of debentures were issued on May 26, 2006; This issue was
reopened on March 6, 2007, and an additional $400,000,000 of debentures
were sold; Non-callable; This book-based note is held in the Canadian
Depository for Securities)
 
86 Government of Saskatchewan - 2006-07 Public Accounts

Supplementary Information

General Revenue Fund - Public Issue Debentures (continued)

Date of
Issue		 Date of
Maturity		 Interest
Rate
%		 Interest
Payments		 Currency Purpose of
Issue		 Amount
Outstanding		 Total Issue
Outstanding		 Equity of
Applicable
Sinking Fund		 Sinking Fund
Contribution
2006-07
Sept. 16/02 Sept. 5/42 5.70 Semiannual Can. GRF 50,000,000
 50,000,000 2,310,037 500,000
(Canadian medium term note; Non-callable; This book-based note is held
in the Canadian Depository for Securities)
 
* Adjustment to reflect conversion of debentures and related sinking
funds quoted in foreign currencies to Canadian dollars using the
exchange rate in effect at March 31, 2007 (U.S. $1.1529) 		42,047,500 28,031,663 --
Total 10,982,708,302 1,162,452,621 90,426,105
** Sinking fund contributions to U.S. dollar sinking funds are made in U.S. dollars. Contributions for general government purposes are shown at the cost in Canadian dollars to purchase U.S. dollars equal to the contribution amount.



Government of Saskatchewan - 2006-07 Public Accounts 87

Supplementary Information

General Revenue Fund - Debentures Issued to the Minister of Finance of
Canada
 As at March 31, 2007
(dollars)

Date of Issue
 Date of Maturity
 Interest
Rate %
 Amount
Outstanding
Canada Pension Plan Investment Fund*                      
April 1987 - March 1988     April 2007 - March 2008       9.61     88,333,000  
April 1988 - March 1989     April 2008 - March 2009       10.08     93,932,000  
April 1989 - March 1990     April 2009 - March 2010 **       9.90     101,867,000  
April 1990 - March 1991     April 2010 - March 2011 **       10.85     90,318,000  
April 1991 - March 1992     April 2011 - March 2012 **       9.92     90,664,000  
April 1992 - March 1993     April 2012 - March 2013 **       9.37     62,705,000  
April 1999 - March 2000     April 2019 - March 2020 **       6.34     46,335,000  
April 2000 - March 2001     April 2020 - March 2021 **       6.54     75,553,000  
April 2002 - March 2003     April 2022 - March 2023 **       5.89     41,182,000  
April 2003 - March 2004     April 2023 - March 2024 **       5.48     40,189,000  
April 2005 - March 2006     April 2015 - March 2036 **       4.63     20,654,000  
April 2006 - March 2007     April 2011 - March 2027 **       4.58     99,655,000  
                    851,387,000  
The Municipal Development Loan Fund                      
1967     May 2007       5.38     291  
 
Total                   851,387,291  

The average effective interest rate on debentures issued to the Minister of Finance of Canada is 8.31%.

* Canada Pension Plan debentures have a 5-30 year maturity and are callable in whole or in part before maturity, on six business days prior notice at the option of the Minister of Finance of Saskatchewan.
** Subject in part to annual sinking funds; equity in sinking funds at March 31, 2007, $92,836,986.

88 Government of Saskatchewan - 2006-07 Public Accounts

Supplementary Information

Glossary of Terms

Accrual Accounting
The method used to prepare the financial statements included in Volume 1 of the Public Accounts. Accrual accounting recognizes financial transactions at the time they occur, regardless of whether any cash is received or paid.

Accumulated Deficit
One of the two measures of a government’s financial position (see net debt). The accumulated deficit is the amount by which expenses have exceeded revenues from the beginning of incorporation (1905) plus any adjustments that were charged directly to the accumulated deficit. It is calculated as the difference between assets and liabilities.

Budget
The amount presented in the Estimates and authorized by the Legislative Assembly.

Consolidation
The method used to account for government service organizations in the Summary financial statements in which the accounts are adjusted to the basis of accounting described in note 1e of the Summary financial statements and then combined. Inter-organization balances and transactions are eliminated.

Debt
Terms used when describing debt include:

Government debt is debt incurred by the General Revenue Fund (GRF) to fund Government spending.

Crown Corporation debt is debt incurred by the GRF for Crown corporation purposes.

Gross debt is borrowings through the issuance of debt instruments such as promissory notes and debentures.

Sinking funds are funds set aside for the repayment of debt.

Public debt is gross debt net of sinking funds.

Guaranteed debt is the debt of others that the Government has agreed to repay if others default.

Total debt is public debt plus guaranteed debt.

Debt Reduction Account
The account, established pursuant to The Balanced Budget Act, to account for the accumulated surpluses of the General Revenue Fund commencing April 1, 1995.

Fiscal Stabilization Fund (FSF)
The fund established to stabilize the fiscal position of the Government and to facilitate long-term planning. Stabilization occurs through transfers between the FSF and the General Revenue Fund.

General Revenue Fund
The fund into which all revenues are paid, unless otherwise provided for by Legislation, and from which all expenditures are appropriated by the Legislative Assembly.

Government Business Enterprises
Self-sufficient government organizations that have the financial and operating authority to sell goods and services to individuals and organizations outside the government reporting entity as their principal activity. Government business enterprises are recorded in the Summary financial statements using the modified equity method.

Government Business Partnerships
Government partnerships that are self-sufficient and have the financial and operating authority to sell goods and services to individuals and organizations outside the government reporting entity as their principal activity. Government business partnerships are accounted for in the Summary financial statements using the modified equity method.

Government of Saskatchewan - 2006-07 Public Accounts 89

Supplementary Information

Government Partnerships
Investments by the Government where there is a contractual arrangement between the Government and one or more partners outside the government reporting entity and where the partners share, on an equitable basis, the risks and benefits of the partnership. Government partnerships, except those designated as government business partnerships, are proportionately consolidated in the Summary financial statements.

Government Service Organizations
Those organizations that are controlled by the Government, except those designated as government business enterprises. Government service organizations are consolidated in the Summary financial statements after adjustment to a basis consistent with the accounting policies described in note 1e of the Summary financial statements.

Modified Equity
The method by which government business enterprises and government business partnerships are accounted for in the Summary financial statements. The Government’s investment, which is originally recorded at cost, is adjusted annually to include the net earnings/losses and other net equity changes of the enterprise/partnership without adjustment to conform with the accounting policies described in note 1e of the Summary financial statements. Inter-organizational balances and transactions are disclosed but not eliminated.

Net Debt
One of the two measures of a government’s financial position (see accumulated deficit). Net debt is calculated as the difference between financial assets and liabilities.

Pension Liability
An actuarial estimate of discounted future payments to be made to retirees under government pension plans, net of plan assets.

Saskatchewan Infrastructure Fund (SIF)
The fund established to provide moneys that may be used to support the provision and maintenance of infrastructure in Saskatchewan that achieves the Government’s long-term objectives of: building and improving Saskatchewan communities; building and improving the capacity of social and economic development in Saskatchewan; and meeting the growing needs of Saskatchewan families.

Summary Financial Statements (SFS)
The statements prepared to account for the full nature and extent of the financial activities of the Government. The SFS includes the financial activities of organizations controlled by the Government. These organizations are segregated into two classifications, government service organizations and government business enterprises, and are collectively referred to as the government reporting entity. Trusts administered by the Government are excluded from the government reporting entity.

90 Government of Saskatchewan - 2006-07 Public Accounts