Government will borrow $700M to finance roads, school, hospitals

The Saskatchewan government says it will borrow $700 million on the capital markets to finance its infrastructure-building plans.

Announced Wednesday in the provincial budget, it's something of a change in direction for the province.

The government regularly borrows to refinance it's other borrowings, and the Crown corporations borrow for their own needs.

But big loans to pay for roads, schools and hospitals is something new for Saskatchewan.

Finance department officials said government plans to spend more than $1.3 billion on core infrastructure in 2015-16, but there's no way it could pay for that out of this year's revenues.

So, with interest rates at historically low levels, it makes sense to borrow now, the department says.

The $700 million will be paid off over 30 years, with an interest rate of about 3.5 per cent.

The budget says public debt (which includes government ministries and Crown corporations) is expected to rise to $13.3 billion this year, compared to $11.7 billion in 2014-15.

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