REGINA – Saskatchewan’s Crown corporations continue to increase their debt, but the provincial government believes it’s the only way to continue growth.
In its 2014 annual report, the Crown Investments Corporation (CIC) had an overall debt ratio of 60 per cent, which was a few points higher than projected.
Consolidated debt increased by more than $1 billion last year, led by SaskPower at $874 million.
“This debt isn’t operating debt, it’s supported debt through investment and increase in asset value,” said CIC Minister Don McMorris. “Are your options to not build? Not repair? That hasn’t been our philosophy the last number of years.”
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McMorris cited infrastructure renewal such as power poles and gas lines as well as expansion of SaskTel’s fibre network.
The debt ratio, which is used to monitor financial health, has gone up 10 per cent since 2010.
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The provincial government said there were many challenges including competition, increasing construction costs and market value adjustments that hurt SaskTel, SaskEnergy and SaskPower.
Crown companies paid dividends of $206 million in 2014.
CIC expects increased earnings and a more “normal” year in 2015.
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