Good harvest, few claims | Money will be held for future ‘weather challenges’
A good crop year has resulted in a higher than expected surplus at Saskatchewan Crop Insurance Corp.
The mid-year financial report, released Nov. 27, shows a projected surplus of $308.4 million, which is $218 million more than the budget estimate of $90.4 million.
Chief executive officer Shawn Jaques attributed the surplus to above average crops, relatively early harvest and fewer claims.
The money will be held to pay for future claims.
“That money will be there in future years should we have weather challenges that require us to pay out larger than normal claim years,” he said.
An example would be 2002, when the corporation paid more than 100,000 claims worth a record $1.09 billion.
Jaques said the insured liability this year was more than $5 billion. A surplus of $300 million is not a lot of money when put against that total.
The deadline for this year’s claims was Nov. 15 and the final figures won’t be known until all claims are processed.
Finance minister Ken Krawetz said the record crop pushed the province’s forecasted gross domestic product a full percentage point higher to 3.6 percent from 2.6 percent.
The 34.2 million tonne crop is 22 percent larger than the budget assumption.
The report said the large crop changes annual growth rate calculations but doesn’t affect the base level of economic activity.
Officials assume that crop production will return to more normal levels next year.
The report also shows that agriculture ministry spending is down by $4 million. Officials said that is because of lower demand for some Growing Forward 2 programs and operational savings.
The government relations ministry will spend nearly $44 million more than expected, primarily because of flood claims through the Provincial Disaster Assistance Program.