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Government of Saskatchewan Western Red Lilies
Executive Council - Media Services
Legislative Building - Regina, Canada S4S 0B3 - (306) 787-6281

News Release


November 16, 2006

Additional Information

Finance - 819

2006-07 MID-YEAR REPORT: SASKATCHEWAN PEOPLE BENEFITING FROM PROVINCE'S PROSPERITY

Thanks largely to $171.9 million in higher tax revenue reflecting a strong and
growing economy, the 2006-07 Mid-Year Report forecasts a $402.3 million
revenue improvement for the year over Budget.

"The strong economy is allowing us the freedom to cut taxes and make major new
investments in social programs to make life better for Saskatchewan families,"
Finance Minister Andrew Thomson said.

The forecast bottom-line revenue increase comes even after the October 28
Provincial Sales Tax (PST) cut, from seven to five per cent. The forecast
General Revenue Fund surplus now stands at $34.5 million, with no transfer
from the Fiscal Stabilization Fund.

"This year alone, we have undertaken more than half-a-billion dollars in tax
cuts to stimulate our economy and improve the lives of ordinary Saskatchewan
families," Thomson said.

Recent tax measures include:

• cutting the PST by two points to a 20-year low of five percent;

• cutting income tax by indexing the brackets and credits for personal income
taxes to the national rate of inflation for the fourth year running
(increasing brackets and credits in 2007 by 2.2 per cent);

• cutting corporate capital and income taxes;

• reducing the small business tax rate and increasing the threshold for small
businesses to qualify for that rate; and

• cutting property taxes for farmers by paying 60 per cent of the cost of
education assessed to farmland through the education property tax.

"Stronger revenues from a stronger economy allow the PST cut to be sustainable
as it is funded from an ongoing tax improvement related to economic strength,
and not from windfall revenues."

"I am very pleased that we are also able to use our resources, and the
benefits of reduced interest costs, to build stronger communities and get
ready for further growth by improving the economic infrastructure of the
province," Thomson said.

An additional $324.7 million in program support is incorporated in the
Mid-Year Report including expenses related to:

• additional funds to recruit and retain health workers;

• highway work including additional funds for winter highway construction and
planning work;

• labour market initiatives; and

• education capital funding undertaken by the departments of Advanced
Education and Employment, and Learning.

The Mid-Year Report also highlights $100 million for the Building Communities
program, as part of the new multi-year Saskatchewan Infrastructure Fund.

"We have also improved transparency and accountability for the Fiscal
Stabilization Fund through full cash funding this year," Thomson said.

The $402.3 million forecast revenue increase for the year at Mid-Year includes
the $72.9 million improvement for the year as forecast in the First Quarter
Report in July. That improvement went toward fully funding the Canadian
Agricultural Income Stabilization (CAIS) program for 2006 ($60 million),
repairs for flood-damaged roads and other initiatives.

The attached backgrounder has further details and a copy of the report can
also be found online at www.gov.sk.ca/finance under the "Publications" tab.

-30-

For More Information, Contact:
Lorri Thacyk
Finance
Regina
Phone: 306-787-6605
Email: lthacyk@finance.gov.sk.ca