Notes to the Consolidated Financial Statements
4. Capital Management The Corporation’s objective when managing its capital is to maintain financial stability through the effective management of liquidity and capital structure. The Corporation finances its capital requirements through internally generated funds and injections of capital from the Province, typically in the form of debt. Under The SaskEnergy Act , the Corporation may borrow up to $2,500 million of debt upon approval of the Lieutenant Governor in Council (2023 - $2,500 million). Within this limit, the Corporation may borrow up to $500 million in temporary loans (2023 - $500 million), including a $35 million uncommitted line of credit with Toronto-Dominion Bank (2023 - $35 million). As at March 31, 2024, the Corporation had $2,012 million of debt outstanding (2023 - $1,958 million), including $245 million in temporary loans (2023 - $311 million) and $10 million required to be readily available under a Parental Guarantee Agreement posted with Many Islands Pipe Lines (Canada) Limited (MIPL), one of its subsidiaries, leaving $245 million of remaining short-term borrowing capacity (2023 - $179 million). The Corporation’s short-term debt is unsecured, with an average interest rate of 5.1 per cent (2023 - 4.5 per cent). The Corporation borrows all its capital, with the exception of occasional overnight loans from the Toronto- Dominion Bank, from the Province. The Corporation’s borrowing requirements constitute a minor portion of the Province’s total borrowings, and given the Province’s strong credit rating, the Corporation was able to satisfy all its funding requirements during the period. The Corporation does not have share capital. However, it has received advances from CIC, which reflect an equity investment in the Corporation, to form its equity capitalization. The Corporation’s capital structure consists of long-term debt, short-term debt, equity advances and retained earnings, net of debt retirement funds, and cash and cash equivalents. The Corporation monitors capital on the basis of the proportion of debt in the capital structure, with a long- term target range of 58.0 per cent to 63.0 per cent. The purpose of this strategy is to ensure the Corporation’s debt is self-supporting and does not adversely affect the Province’s access to capital markets. The debt ratio is calculated as net debt divided by total capital at the end of the fiscal year as follows:
(millions)
2024
2023
$
1,767 $
Long-term debt Short-term debt
1,647
245
311
13
Lease liability
10
(179)
Debt retirement funds Cash and cash equivalents
(160)
(20)
(6)
1,826
Total net debt Equity advances Retained earnings
1,802
22
22
1,235
1,235 3,059 58.9%
$
3,083 $
Total capital
59.2%
Debt ratio
The Corporation’s objectives, policies and processes for managing its capital were consistent with the prior period. The Corporation complied with all externally imposed requirements for its capital throughout the period, which include compliance with the approved borrowing limits for short-term and long-term debt, and the annual investment requirement to the debt retirement funds.
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