It wasn't the record year we saw in 2008, but 2010 was a very good year for Saskatchewan's Crown corporations.
That said, our utility services that are so critical to rural Saskatchewan and the province as a whole may have a few problems on the horizon.
And the biggest potential concern is the creeping debt - a problem magnified by the penchant of government to milk almost every dollar of dividend revenues from the Crown corporations.
According to the Crown Investment Corp. (CIC) report tabled in the legislature Wednesday afternoon, profits on a consolidated basis totalled $394.8 million in 2010. That's $46-million more than the $348.7 million in 2009, but well shy of the $978.2-million profit in 2008, the $696.3 million in 2007 or the $441.1 million in 2006.
Unfortunately, this slide in Crown profitability comes at a time when the Saskatchewan Party government seems to be expecting more and more from its Crown utilities.
The 2010 performance of the Crowns did exceed government expectations with a 9.6-per-cent return on equity and a 50.4-per-cent debt to ratio. This enabled the Crowns to pay a $266-million dividend, plus two special dividends - a $10-million dividend for green initiatives and a $195-million dividend for the Children's Hospital in Saskatoon.
That represents 90-per-cent of all the profits made by all the Crown Corporations, except SaskPower that was allowed to keep all of its profits last year to deal with its severe capital infrastructure problem. (Initially, the Sask. Party government had planned to take 100 per cent of all profits from all the Crown corporations except SaskPower.)
The bottomline for the Crown corporations in 2010 was a $317-million increase in debt. It's not the most frightening number, considering profits are largely than debt growth. Nevertheless, one has to one wonder whether this policy of stripping dividends to run the day-to-day operations of government is sustainable.
On one had, the government boasts of significant capital investment in 2010 like SaskPower's Boundary Dam 3 refurbishment project, SaskTel's launch of a new wireless network and the growth of SaskEnergy's natural gas pipeline system. All of these projects are obviously good for the province and have provided much needed activity in rural Saskatchewan in particular.
However, the Crowns now needs to borrow more money to do these things largely because the government is transferring somewhat shrinking Crown profits to pay for day-to-day government operations.
Admittedly, one should keep the perspective that this was still a good year for Saskatchewan Crown corporations. While not necessarily the best year in the past five years, the Crowns remain strong individually and collectively:
SaskPower's $159.4-million net earnings were $25 million more than expected and nearly $57 million more than last year.
SaskTel's $155.2-million profit in 2010 was also $40 million more than the business plan and $26 million more than last year.
SaskEnergy's $37-million profit was $21 million less than expected and down considerably from its $93.3 million 2009 - largely due needed market adjustments because of lower natural gas prices.
SGI Canada's net earnings of $48.4 million were only down slightly from the $52.4 million in 2009 - a pleasant surprise given the record storms in 2010. Also, SGI's Auto fund had a surprising $68.4 million in net earnings.
Of course, STC lost money, but the good news is the $10.8 -million operating loss in 2010 was only slightly more than the $10.6 million loss in 2009.
The Regina and Moose Jaw Casinos also were limited to $21.5 in net earnings in 2010 - partly due to the labour dispute that reduced profits from the $25.4 million made in 2009.
All in all, this is a pretty good financial picture - even when you factor in losses in the investment portfolio.
However, the Crown corporations would be doing even better if government would keep its hands off Crown profits.
Murray Mandryk has been covering provincial politics for over 15 years.
