Madam Speaker, it is a pleasure to talk about equalization, which is a government program, the basis of which is the measurement of fiscal capacity, that is, how much money a province can raise each year to fund programs and services.
In the case of Saskatchewan, it is about 16% of Saskatchewan's revenues that will be equalized and impact heavily on its level of entitlements. Saskatchewan is the happy beneficiary of non-renewable resources and has benefited in particular from the strong rise in energy prices resulting in lower equalization. As energy prices rise, more money is generated, and therefore the province's equalization entitlements decline. The happy result was that in the year 2003-04 Saskatchewan became a have province joining Alberta, British Columbia and Ontario.
One of the features of the equalization program is the floor provision which protects provinces from large annual declines in equalization. It provided over $100 million in benefits to Saskatchewan in the year 2002-03. The floor provision protects the finance department in Saskatchewan from ups and downs that would otherwise impact negatively on its budgeting process.
Non-renewable resource revenue is forecast to be $1.4 billion in 2004-05, twice the amount of the $700 million figure projected in the 2004 budget. As I said, the idea here is to protect against volatility, so that treasurers going forward can analyze what revenues they can reasonably expect. In the negotiations with the premiers and Prime Minister, that was effectively taken care of with a guaranteed floor by the Government of Canada which essentially bought the risk of the entitlement.
In the case of Saskatchewan, the Government of Canada has taken action to improve the operation of the crown leases tax base and in March 2004 Saskatchewan was compensated with a one time payment of $120 million. In budget 2005, Bill C-43 will provide a further $6.5 million adjustment to Saskatchewan in 2005-06 for the same purpose.
Saskatchewan's situation is relatively prosperous. In addition to receiving the $590 million in additional entitlements this year out of the equalization program, Saskatchewan will happily be running an economy at 3.4%, a debt to GDP of 19.3%, which is substantially better than pretty well anyone else in the country. The national average is about 25.1%. This will be its 11th consecutive surplus budget this year and the unemployment rate is at 5.5%. As we can see, its situation is substantially improved over that of pretty well any other province in the country, let alone the situation where the folks in Newfoundland and Labrador and Nova Scotia find themselves.
This is a program that is working tremendously to the benefit of Saskatchewan in particular. The Minister of Finance has done an extraordinary job in addressing those particular items that affect Saskatchewan in unique ways.