Morgan explains Crown losses, defends quiet reports

The last year has been tough for Saskatchewan’s Crown corporations – most posted a profit but much lower than normal, while SaskPower lost a hunk of money.

According to the reports released this week, SGI made $24 million, which is significantly less than the $82 million it made the year before.

Don Morgan is the province’s minister of Crown Investments. Speaking on Gormley, he said a lot of SGI’s earnings come from investments. It has to maintain a stabilization reserve, which had been producing a fairly significant amount of revenue.

“Market adjustments meant a fairly significant drop in the size of the investment. It has recovered a lot since the end of the fiscal year but nonetheless it took a significant loss at the end of last year, a drop in value,” said Morgan.

He said things around auto claims have also affected SGI – the longer time it has been taking to get parts and repair vehicles and they’re getting more expensive to repair.

“At the end of last year they were certainly reflecting some challenging times,” he said.

But Morgan insisted that SGI is sustainable.

“They’re making changes (and) making adjustments … They’re trying to avoid any kind of rate increase,’ said Morgan.

SaskEnergy made $60 million last year, less than half of the $158 million it made in the 2021-22 fiscal year. It spent money on maintaining capital and infrastructure, but also on higher fuel prices.

“They had spent a significant amount of money — and they’re to be commended for it — on rate-hedging so that going forward, if there is another spike in natural gas prices, they will be able to provide cushions for the next number of years without an increase,” Morgan said about SaskEnergy.

That, Morgan said, is why SaskEnergy has applied for a rate decrease.

SaskTel made about $104 million, which is around what it had been bringing in for profits. Morgan said the government had told SaskTel to reduce the dividend that it paid to government so it could finish the 5G rollout and get aggressive on rural fibre.

“There’s a strong desire on the part of Saskatchewanians to have good internet and good internet connectivity wherever the people are, so we’ve urged SaskTel to do everything they can, (like) working with private contractors (and) working with their own staff to get more and more fibre,” said Morgan.

SaskPower was the leader in loss last year for the Crowns, losing $172 million.

“A lot of challenges were there. It was a difficult year for them and I think we will want to watch carefully as they go forward to make sure that they’re able to sustain the capital and infrastructure,” said Morgan.

The minister blamed the loss on things like the $250 million more SaskPower had to pay in fuel costs to generate electricity, $80 million on unanticipated maintenance, and paying $192 million in carbon tax.

SaskPower also settled a contract dispute over carbon capture and the sale of CO2 from Boundary Dam, paying about $26 million.

Normally when the Crown reports come out, they’ll hold technical and media briefings to explain the reports and send out news releases – but that didn’t happen this year.

The NDP accused the government of trying to hide the reports, but Morgan said it was because they came out during the writ period for the three byelections happening in the Regina area.

“Had we had a news conference or posted something, the Opposition no doubt would have said we are using that to lever the election in our way,” said Morgan.

Section 277(3) of The Election Act 1996 reads: “During a byelection in a constituency, no government ministry shall publish in any manner in the constituency any information with respect to the activities of the ministry.”

And Section 277(4) reads: “During a byelection in a constituency that includes, in whole or in part, a city having a population exceeding 20,000 inhabitants, no government ministry shall publish in any manner in that city any information with respect to the activities of the government ministry.”

A statement from Executive Council in the provincial government explained that the restrictions are meant to show the government isn’t using its advantage to further the party’s political interests and to stop civil servants from being dragged into the politics.

“Circumventing these restrictions in another location would contravene the spirit of the Act,” read the statement.

The government has been sending out news releases and ministers have been hosting events in the province outside those three ridings.

Executive council pointed out that ministers have an exemption and that the annual reports were tabled in the legislative assembly, as well as being delivered to the official opposition.