Saskatchewan's Crown sector posted solid results in 1999 by focusing on debt reduction, sound financial management and improved and expanded services for the people of Saskatchewan.

Crown Investments Corporation of Saskatchewan (CIC) and its subsidiary Crown corporations, including SaskPower, SaskTel, SaskEnergy, Saskatchewan Government Insurance (SGI CANADA), Saskatchewan Transportation Company (STC), Sask Water, Saskatchewan Opportunities Corporation (SOCO) and Saskatchewan Government Growth Fund Management Corporation (SGGF), tabled their 1999 annual reports with the Legislative Assembly today. These crown corporations also tabled annual financial statements for their pension plans and wholly-owned subsidiaries.

"The highlight for 1999 was a $289 million decrease in CIC's consolidated debt," Crown Investments Corporation Minister John Nilson said. "That is a significant reduction that follows a decrease of $187 million recorded in 1998. It is a continuation of the debt reduction efforts which have resulted in a decrease of $2.3 billion since 1991."

The major contributor to the overall decrease in debt in 1999 was a drop of $157 million in CIC's non consolidated debt or debt held by CIC itself as the holding company. The lower debt also meant CIC paid $34 million less in associated interest expense in 1999.

"This, in turn, allowed CIC to declare a regular dividend of $125 million to the province's General Revenue Fund for 1999," Nilson said. "That is $25 million more than last year's dividend. This money will go toward programs and services, such as health care, education, and highways, that benefit all Saskatchewan people."

Other highlights of the 1999 annual reports include:

• Consolidated earnings were $216 million on revenues of $2.8 billion. That compares with 1998 earnings of $344 million on revenues of $2.7 billion;
• Consolidated debt at the end of 1999 was $3.1 billion, $289 million lower than the $3.4 billion recorded at the end of 1998 and $2.3 billion lower than the $5.4 billion recorded at the end of 1991;
• Non-consolidated debt, or debt for CIC as the holding company, was reduced by $157 million to maintain it at its self-supporting level of $61 million;
• CIC Industrial Interests Inc., CIC's wholly-owned investment subsidiary, recorded a gain of $30 million on the sale of its 50 per cent interest in the Saskfor MacMillan Limited Partnership;
• SaskTel recorded a gain of $39 million upon conversion of its 35 per cent interest in Saturn Communications Limited to shares of Austar United Communications Limited. The corporation had net earnings of $68 million on revenues of $738 million, compared with net earnings of $93 million on revenues of $753 million in 1998. The decrease was due mainly to lower long distance revenues as a result of competitive pressures and decreases in the revenue settlement plan that provincial phone companies had for long distance charges. Despite the decline in revenues, SaskTel retained about 93 per cent of the long distance market in the province;
• SaskPower lowered its debt by $94 million to $1.5 billion, while maintaining its freeze on farm and residential electrical rates for the fourth straight year. Revenues were $977 million, up $19 million over 1998, largely due to higher export sales. However, higher fuel costs and other operating expenses contributed to a $26 million decline in net earnings to $114 million;
• SaskEnergy's net earnings of $36.6 million were virtually identical to 1998. Weather was eight per cent warmer than normal in both of those years. In 1999, SaskEnergy offered its residential customers provincial natural gas rates that were the lowest in Canada;
• SGI CANADA's revenues declined by $6 million to $184 million, while net earnings were down $21 million to $10 million. The lower earnings were mainly the result of higher claims costs and lower investment earnings. The Saskatchewan Auto Fund, a stand-alone, compulsory auto insurance program administered by SGI CANADA, is not included in SGI CANADA's or CIC's consolidated financial statements. The Auto Fund reduced its accumulated deficit to $62 million from $92 million in 1998. Revenues were up $22 million to $475 million as a result of increased premiums due to a newer vehicle population and a two per cent general rate increase;
• STC continued its efforts to contain costs while meeting the challenge of providing passenger and freight service to Saskatchewan people. The provincial bus company's operating expenses declined by $1 million to just under $16 million, while its loss before grant was $600,000 lower at just over $3 million;
• Sask Water lost just under $10 million, due mainly to the bankruptcy of one of its customers, Lake Diefenbaker Potato Corporation. The $5.2 million loss on this bankruptcy consisted of $3.5 million in realized losses and a $1.7 million reduction in the expected value of the assets recovered through the bankruptcy. The corporation's SPUDCO unit lost $3.7 million, mainly due to low commodity prices for potatoes. Prices are expected to increase in 2000;
• SOCO's Investment and Research Park Divisions earned own source revenues of $12 million, up $2 million over 1998. This increase is mainly attributable to increased capacity at Innovation Place in Saskatoon and higher returns on the corporation's investment portfolio. Earnings of $300,000 were $400,000 less than in 1998, due mainly to higher interest costs and expenses related to new development at Innovation Place; and
• SGGF Management Corporation had a net loss of just over $1 million, compared with earnings of more than $16 million in 1998. The loss in 1999 is due to a provision for unrealized investment losses. The higher earnings in 1998 reflected the inclusion of the residual profits from SGGF's first fund company, which repaid the last of its 651 investors during that year. To the end of 1999, SGGF's fund companies had invested more than $170 million in new and expanding businesses in Saskatchewan.

"The Crown sector's solid performance in 1999 has set the stage for what we believe will be another good year in 2000," Nilson said. "Crown corporations continue to provide quality services to Saskatchewan people at rates that are among the lowest in Canada. At the same time, the Crown sector continues to reduce its debt and provide a good return on investment to the people of Saskatchewan."

Karen Schmidt
A/Executive Director, Communications
Crown Investments Corporation
Regina
Phone: (306) 787-5889