Notes to the Consolidated Financial Statements
The defined benefit plan is administered by Saskatchewan Power Corporation (SaskPower), a Crown corporation under the common control of CIC. Employees that transferred employment from SaskPower upon establishment of SaskEnergy were eligible to remain members of the plan for the maximum contribution period of 35 years. A contractual agreement is in place stating that the Corporation’s future contributions to the plan will not be affected by any plan surplus or deficiency. As a result, obligations related to the defined benefit plan are limited to making regular payments to the plan for current service, similar to a defined contribution plan. As all eligible employees reached the maximum contribution period of 35 years, the Corporation is no longer required to make contributions to the plan. iii. Retiring allowance plan Certain employees of the Corporation are members of a retiring allowance plan. The Corporation’s obligation is the amount of future benefit that employees have earned in return for their service in the current and prior periods. The future benefit is actuarially determined using the projected unit credit method. Any actuarial gains or losses are recognized in other comprehensive income while all current service costs and interest expense are recognized in net income. Actuarial gains and losses are transferred from other equity to retained earnings in the year it is recognized in other comprehensive income. The Corporation measures its future benefit obligations for accounting purposes at March 31. The accrued employee benefits liability at March 31, 2025 was $3 million (2024 - $3 million). The Corporation has not established a trust nor does it hold property for the specific purpose of providing benefits to the participants of the plan. Benefits are funded by the current operations of the Corporation. l. Provisions Provisions are recognized when the following conditions are met: the Corporation has a present obligation, legal or constructive, as a result of a past event; it is probable that the Corporation will be required to settle the obligation; and a reliable estimate of the amount of the obligation can be made. Provisions are determined by discounting the expected future cash flows at a rate that reflects current market assessments of the time value of money and the risks specific to the obligation. Decommissioning liabilities A decommissioning liability is a legal or constructive obligation associated with the decommissioning of certain natural gas facilities. The Corporation recognizes a decommissioning liability, with a corresponding increase to property, plant and equipment, in the period the facility is commissioned, provided a reasonable estimate of the expenditure required to settle the present obligation can be determined. The estimated expenditure of a decommissioning liability is based on detailed studies that take into account various assumptions regarding the anticipated future cash flows, including the method and timing of decommissioning. The future cash flows are discounted at a credit-adjusted risk-free rate based on the yield of Government of Saskatchewan bonds. The unwinding of the discount on provisions is recognized in net income as finance expense over the estimated time period until settlement of the obligation. The corresponding increase to property, plant and equipment is depreciated on a straight-line basis over the estimated useful life of the related asset. At each reporting date, the estimated carrying value of a decommissioning liability is reviewed, with any changes recognized in the consolidated financial statements. m. Revenue The SaskEnergy Act was amended in December 2024. The amendment provided that the Government of Saskatchewan is the sole registered distributor of natural gas in Saskatchewan, in place of the Corporation, for the purposes of the federal GGPPA throughout 2025. The Corporation may purchase, distribute, sell, manufacture, produce, transport, gather, compress and store natural gas as per The SaskEnergy Act . The Corporation’s natural gas commodity revenue and transportation services are based on the consideration specified in contracts with customers. Revenue is recognized when control of the product is transferred to the customer or transportation service has been completed. This is generally at the point in time when the customer obtains legal title to the natural gas at its custody transfer point or the transportation service has been completed at the customer’s natural gas line location and collection is reasonably assured. The amount of revenue recognized is based on the consideration specified in the contract.
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