SGI dips into rate stabilization reserve, SaskTel pays dividends in latest Crown financials

SGI and SaskTel both earned profits last fiscal year but only one of the Crown corporations is paying dividends.

SaskTel and SGI (including SGI Canada) reported profits for the fiscal year 2023-24 in annual reports released on Monday. SGI withdrew $70.3 million from its rate stabilization reserve to cover losses in the provincial Autofund.

This is the second year in a row SGI did not pay dividends.

"We have had the opportunity on two occasions in the last couple of years to provide a rebate to Saskatchewan customers, but at this point we aren't in a position to do that," Duncan said.

The rate stabilization reserve now sits at $924.9 million. Duncan said the fund remains at "an adequate level." He is pleased with SGI's fiscal situation.

"SGI has performed remarkably well in some very trying circumstances," Duncan said. "They're navigating not only a competitive environment, but summer storms and everything else that goes along with being an insurance company."

SGI separates financial reporting between the Autofund and SGI Canada, its competitive arm that sells insurance through local brokers in multiple provinces.

The Autofund lost money while SGI Canada made a $78.1 million profit. That money will be used to replace aging tech infrastructure, among other priorities.

The Autofund paid out more in claims ($1.096 billion) than premiums ($1.078 billion), but also made $183.5 million in investments. Expenses are up due to inflation and supply chain issues that increased insurance claim costs, but it could have been worse if it wasn't for a quiet storm season, Duncan said.

SaskTel profits

SaskTel ended the fiscal year with a $95.4 million profit on operating revenue of $1.35 billion. The Crown corporation expects similar profits next year, said SaskTel CFO Scott Smith.

"We were happy with our revenue growth this year. We were $21.3 million above last year," Smith said on Monday.

The profit means SaskTel is paying $38.2 million in dividends to the Crown Investment Corporation, the holding company for the province's Crown businesses. That's a 40 per cent divided, similar to last year but down from previous years that went as high as 90 per cent.

The remaining profits are slated for SaskTel's major capital projects, including the 5G network and rural fibre optic expansions.

"We know they have significant capital spending and we want to make sure they retain the earnings to do so while also ensuring they have a strong debt to equity ratio, which they do," Duncan said.

The government is not working on any plans to privatize SaskTel, Duncan said.

"From the government's perspective, we haven't had any discussions or approaches from anyone. And my understanding is that would also be true for the senior leadership at SaskTel," Duncan said.