PROVINCE OF SASKATCHEWAN

INVESTOR PRESENTATION

May 2018

THE SASKATCHEWAN DIFFERENCE

2

• Economic Stability• Diversified economy balances cyclicality of resources

• Growing population

• Majority government with strong mandate

• Fiscal Responsibility• Budget 2018-19: On Track to return to balance in fiscal 2019-20

• No major new tax changes

• Continued targeted infrastructure investments

• Financial Flexibility• Among lowest provincial debt levels in Canada

• Low reliance on federal transfer payments

• Strong credit ratings

DIVERSIFIED

3

Agriculture, Forestry, Fishing & Hunting

6%

Mining and Petroleum21%

Manufacturing7%

Construction7%

Transportation, Warehousing & Utilities

7%

Wholesale and Retail Trade11%

Finance, Insurance & Real Estate

14%

Business Services9%

Government Services6%

Education & Healthcare11%

2016 REAL GDP BY INDUSTRY

4

TRADE- DRIVEN

• 2nd highest level of exports among Provinces• 39% of GDP

5

RENEWABLE AND NON-RENEWABLE

RESOURCES

5

ECONOMIC OVERVIEW

6

4.0

7.28.0

12.6

8.7

10.9

2.7

0

5

10

15

Per

Ce

nt

Ch

ang

e

Source: Statistics Canada

SASKATCHEWAN KEY ECONOMIC INDICATORS (2017 over 2016)

Retail Sales

Whole-sale

NewCars Exports

BldgPermits

HousingStarts

MfgSales

• Many of the key indicators posted strong growth in 2017

• While some investment indicators were down slightly in 2017, they remain high in an historical context

GROWTH RETURNS IN 2017

Signs in 2017 that the economy is rebounding from recent challenges include:

• Population reached 1,169,752 as of January 1, 2018, an increase of 13,410 from January 1, 2017.

• Manufacturing sales grew by 12.6 per cent and new motor vehicles sales were up by 8.0 per cent in 2017, the fourth-highest percentage increases among provinces.

• Oil production and value of sales were up by 5.4 per cent and 33.9 per cent in 2017, respectively.

• Potash production and value of sales were up by 13.1 per cent and 13.9 per cent in 2017, respectively

7

Saskatchewan Economic

2017 2018 2019 2020 2021 2022

Real GDP 1.5 1.3 2.5 2.6 2.2 1.9

Nominal GDP 4.9 4.0 4.3 4.2 4.6 4.5

CPI* 1.7 2.3 1.8 1.8 1.9 1.9

Employment Growth (000 jobs)* (0.9) 2.5 4.6 5.4 5.3 5.1

Unemployment Rate (%)* 6.3 6.1 5.9 5.7 5.5 5.6

Retail Sales* 4.0 2.7 2.5 2.3 2.6 3.0

* 2017 Actual

(Per Cent Change Unless Otherwise Noted)

STRONG EMPLOYMENT AND

POPULATION FUNDAMENTALS

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400

450

500

550

600

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Thousands o

f P

eople

Source: Statistics Canada

1998-2007Average (477.1)

SASKATCHEWAN EMPLOYMENT

2008-2017 Average (550.5)

-10,000

-5,000

0

5,000

10,000

15,000

20,000

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Num

ber

of

People

Source: Statistics Canada

1998-2007Average (-2,319)

SASKATCHEWAN POPULATION GROWTH (January 1)

2008-2017 Average (+16,120)

COMPETITIVE TAX AND

UTILITY RATES

• 2nd lowest personal taxes among provinces

• Competitive business tax environment

2018 INTERCITY COMPARISON OF TAXES AND UTILITIES(FAMILY AT $100,000 TOTAL INCOME)

Source: Ministry of Finance, Budget 2018-19

Total Household Utility Costs comprised of: home heating, electricity, telephone and auto insurance.

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2018-19 BUDGET

10

• 2018-19 Budget $365M deficit

• Revenue up 0.6% from 2017-18 Budget / up 2.2% from Q3• Expense down 1.4% from 2017-18 Budget / up 0.5% from Q3

($M)

Revenue 14,165.1 13,943.0 14,243.5

Expense 14,811.1 14,538.0 14,608.8

Adjustments (50.0) - -

Surplus / (Deficit) (696.0) (595.0) (365.3)

2017-18 2017-18 2018-19

Budget Forecast Budget

2018-19 BUDGET HIGHLIGHTS

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The Plan:

• Budget 2017 established a 3-year plan to restore balance by controlling spending and reducing dependence on volatile resource revenue

Budget 2018:

• Controls spending while providing important investments in health care, education and social services

• Supports continued economic growth

• Continues on the course to restore a balanced budget by 2019-20 12

2018-19 REVENUE MEASURES

• Maintaining last year’s efforts to shift reliance from volatile resource revenues to consumption taxes

• No increases to tax rates – PST, income taxes, EPT – and no carbon tax

• New initiatives

– Saskatchewan Value-added Agriculture Incentive

– Saskatchewan Technology Start-up Incentive

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BALANCED REVENUE SOURCES

13

TOTAL 2018-19 REVENUE $14.2B

CONTAINED EXPENSE GROWTH

14

TOTAL 2018-19 EXPENSE $14.6B

COMMODITY PRODUCTION

1515

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

0

20

40

60

80

100

120

140

160

180

2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

# o

f W

ells

Dri

lled

US

$/B

arr

el

Oil Wells Drilled WTI Oil PriceSource: Ministry of Energy and Resources

WTI OIL PRICE AND OIL WELLS DRILLED

Forecast

10

15

20

25

30

35

40

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Mill

ions o

f T

onnes

Source: Ministry of Agriculture

1998-2007Average (23.8)

SASKATCHEWAN CROP PRODUCTION

2008-2017 Average (31.2)

RESOURCE ASSUMPTIONS

Sensitivities to Budget Assumptions

Change Net Impact

($M)

Oil Price (WTI US$/barrel) $1 16 Exchange Rate (USD/CAD) 1 cent 21 Potash Prices (US$/KCI tonne) $10 35

2018-19 2019-20 2020-21 2021-22

WTI Oil Price (US$/bbl) 58.18 59.75 63.50 69.00

Differential (% of WTI) 22.1 19.8 17.7 16.7

Production (million barrels) 177.7 181.0 183.4 185.5

Potash Price (US$/KCl tonne) 191 194 197 201

Potash Sales (million K2O tonnes) 12.6 13.2 13.6 14.0

Canadian Dollar (US cents) 78.34 79.65 81.55 82.58

RESOURCE ASSUMPTIONS:

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RETURN TO BALANCE

Revenue 14,244 14,761 15,114 15,518

Expense 14,609 14,755 15,006 15,306

Surplus (Deficit)* (365) 6 108 212

Revenue growth 1.6% 3.6% 2.4% 2.7%

Expense growth -1.4% 1.0% 1.7% 2.0%

MEDIUM-TERM FINANCIAL OUTLOOK

2018-19 2019-20 2020-21 2021-22

($M)

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TARGETED INFRASTRUCTURE

INVESTMENTS

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Saskatchewan Builds Capital Plan 1.2

Crown Corporation infrastructure investments 1.5

Total Infrastructure Investment 2.7

2018-19 Infrastructure Investments ($B)SaskPower = $883M

SaskTel = $298M

SaskEnergy = $268M

SaskWater = $34M

551

1,361

927

1,174

612

780 823

954

1,154

1,757

1,582

1,241

854

746 772

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18F 2018-19 2019-20 2020-21 2021-22

SASKATCHEWAN BUILDS CAPITAL PLAN($ Millions)

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MANAGEABLE DEBT LEVEL

• $2.28B increase in total public debt from 2017-18

– Up $1.44B for SK Builds Capital Plan

– Up $400M for GRF operating

– Down $95M for other GSOs

– Up $536M for GBEs

• Second lowest Net Debt to GDP ratio among provinces

($M)

GRF

- Operating 5,750.0 5,750.0 6,150.0

- SK Builds Capital Plan 2,755.6 2,751.7 4,193.8

Other GSO Debt 556.9 526.1 431.3

GSO Debt 9,062.5 9,027.8 10,775.1

GBE Debt 9,137.5 8,724.0 9,259.8

Public Debt 18,200.0 17,751.8 20,034.9

2017-18 2017-18

ForecastBudget

(As at March 31)

Budget

2018-19

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CONSERVATIVE DEBT MANAGEMENT

• Domestic issuance focused, no FX exposure

• Focused on longer term issuance

• 17+ years average term to maturity of term debt

• Sinking Fund – currently $2.0B

• Significant short-term borrowing capacity

• Promissory Note authority up to $4.0B

• Accessed $232M prom note financing in F2017-18

• Modest near-term debenture maturities

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2018-19 BORROWING PROGRAM

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*

*includes $600M of pre-borrowing

DEBT PORTFOLIO

as at March 31, 2018

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STRONG CREDIT RATINGS

RATING AGENCYCURRENT RATING

LONG-TERM

CURRENT RATING

SHORT-TERM

MOODY’S Aaa Not Rated

STANDARD & POOR’S AA A-1+

FITCH AA F1+

DBRS AA R-1 (high)

April 201824

Province of Saskatchewan

CONTACT INFORMATION:Rod Balkwill Denise MaczaExecutive Director Associate Deputy Minister1 (306) 787-9473 1 (306) 787-6780rod.balkwill@gov.sk.ca denise.macza@gov.sk.ca