Annual Report 2018-19

saskwater.com

200-111 Fairford Street East Moose Jaw, SK S6H 1C8

Toll-free: 1-888-230-1111 Inquiry: (306) 694-3098

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TABLE OF CONTENTSAbout SaskWater 1

Financial and Operating Highlights 4

Letter of Transmittal and Minister’s Message 6

Letter to Stakeholders 8

Management Discussion and Analysis 10

SaskWater’s Core Lines of Business 12

Strategic Plan and Balanced Scorecard 18

Customer Driven 20

Pursuing Excellence 34

Valuing Employees 44

Succeeding Financially 58

2018-19 Financial Results 60

Management’s Report on Internal 74 Control over Financial Reporting

Management’s Responsibility 74

Independent Auditor’s Report 75

Financial Statements and Notes 76

Corporate Governance 96

Board of Directors 100

Corporate Governance Statement 102

Executive 112

Corporate Directory 113

CORPORATE DIRECTORY

Doug MatthiesPresident and CEO

Danny BollingerDirector, Financial Services

OPERATIONS AND ENGINEERINGEric LightVice President, Operations and Engineering

John ConwayDirector, Engineering

Rynette Moore-GuillaumeDirector, Operations

Kevin CudmoreManager, Northern Engineering

CORPORATE AND CUSTOMER SERVICEJacquie GibneyVice President, Corporate and Customer Service

Randy AveryDirector, Customer Growth and Engagement

Amanda ZarubinDirector, Corporate Services

Ingrid NewtonManager, Strategic Planning and Policy

Courtney MihaliczManager, Corporate Communications

Paul MaysonManager, IT Services

OFFICE LOCATIONSSaskWater Head Office200-111 Fairford Street East Moose Jaw, SK S6H 1C8 (306) 694-3098 Toll-free: 1-888-230-1 1 1 1

Prince Albert800 Central Avenue McIntosh Mall Prince Albert, SK S6V 6G1

Regina225-A Hellen Drive RM of Sherwood, SK S4K 0A3

Saskatoon#5-1925 1st Avenue North Saskatoon, SK S7K 6W1

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ABOUT SASKWATERSaskWater is Saskatchewan’s commercial Crown water utility, helping communities, First Nations and industry gain access to reliable and professional water and wastewater services.

The history of SaskWater goes back to 1966, when we began operations as the Saskatchewan Water Supply Board. The head office was relocated from Regina to Watrous in 1977, and in 1984, the Saskatchewan Water Corporation was created with its head office in Moose Jaw. All the personnel and property of the former Board were transferred to the new corporation. In 2002, SaskWater received a new mandate to operate exclusively as a commercial water utility.

SaskWater provides professional water and wastewater services to 63 communities, 10 rural municipalities, 81 rural pipeline groups, 17 industrial and 242 commercial and domestic end-user customers.

In addition, SaskWater remotely monitors facilities for four communities and provides operator training to 29 Saskatchewan First Nations.

SaskWater’s services directly and indirectly reach approximately 102,000 people in Saskatchewan.

In order to provide these services, SaskWater owns nine water treatment plants, three wastewater facilities, including 15 kilometres of wastewater forcemain, 140 kilometres of canal and 967 kilometres of potable and non-potable water pipeline. SaskWater also owns or leases 39 booster and pump stations.

Supporting economic growth and the people of Saskatchewan has always been at the core of SaskWater’s purpose. As Saskatchewan’s communities and industries grow with the province’s expanding economy, SaskWater works hard to supply its customers with the infrastructure, customer service and water resources they need to prosper.

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CORPORATE PROFILESaskWater is committed to providing the highest level of service to its customers. That promise is reflected in the corporation’s vision, mission and values.

VISION• We are the best at connecting water for life and

growth, partnering for a better tomorrow.

MISSION• To provide safe, reliable and sustainable water

and wastewater services for Saskatchewan.

VALUES• INTEGRITY – We act ethically with respect,

honesty, courtesy and fairness.

• PROFESSIONALISM – We provide quality, expertise and excellence in the delivery of our services, and we are accountable for our actions.

• TEAMWORK – We promote co-operation and commitment to achieve our common goals.

• SAFETY – We are committed to safety in all aspects of our operations.

• INNOVATION – We pursue continuous improvement and innovative solutions.

• ENVIRONMENT – We respect and support the environment and communities where we live and work.

SaskWater has defined four strategic goals to guide the corporation: CUSTOMER DRIVEN, PURSUING EXCELLENCE, VALUING EMPLOYEES and SUCCEEDING FINANCIALLY. Our 2018–19 Annual Report provides details on how we are accomplishing all four goals.

SASKWATER’S VALUE PROPOSITION TO ITS CUSTOMERS• SaskWater employees hold diverse levels of certification for water and

wastewater systems, allowing for early problem diagnosis and troubleshooting.

• SaskWater’s knowledge of Saskatchewan’s regulatory requirements and our operational expertise allow customers to focus on their core business while we ensure permit requirements and quality standards are met.

• SaskWater’s remote monitoring system provides customers with the safety and security of having their facilities monitored 24 hours a day by trained operations personnel.

• SaskWater’s engineering team provides flexible solutions and project management services to meet the unique needs of customers from concept through to construction.

• SaskWater has the ability to invest in water and wastewater systems and our integrated asset management program ensures timely investment in existing assets. This allows customers to invest their dollars in other areas beneficial to their business or community.

• SaskWater provides grant application support, enhancing our customers’ ability to access capital funding and municipal grants.

• SaskWater utilizes established knowledge and innovation exchange networks and is committed to adopting innovative ideas and technologies.

• As a provincial Crown utility, SaskWater has strong working relationships with regulatory and other government agencies, consultants and contractors that enable access to best practices.

• SaskWater’s existing, well-maintained infrastructure allows for efficient and cost-effective regional solutions.

• SaskWater’s Community Investment Program supports Saskatchewan communities through sponsorships and donations.

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FINANCIAL AND OPERATING HIGHLIGHTS

Financial Highlights ($ thousands):

Year Ended March 31

2019

Year Ended March 31

2018

Total revenue $ 57,290 $ 56,861

Total expenses 47,833 46,708

Operating income 9,457 10,153

Net finance expense (1,967) (2,077)

Net income $ 7,490 $ 8,076

Other comprehensive income 363 128

Total comprehensive income $ 7,853 $ 8,204

Dividends $ 3,745 $ 2,019

Debt ratio 46.10% 46.60%

Operating Highlights (cubic metres):

Non-potable water distributed 39,884,765 36,132,353

Potable water distributed 7,838,396 7,497,755

SYSTEMS MAPCURRENT SERVICE IN SASKATCHEWANSaskWater currently owns and/or operates potable, non-potable and wastewater infrastructure in the following locations/regions:

1

9

12

2

3

4

5

6

78

1016 18

15 1713

1419

11

La Ronge

Saskatoon

Moose Jaw

1 LA RONGE AREA

2 PIERCELAND

3 MEOTA-COCHIN-JACKFISH LAKE AREA

4 KINDERSLEY

5 NIPAWIN

6 MELFORT AREA

7 WAKAW-HUMBOLDT AREA

8 HANLEY-WATROUS-LANIGAN AREA

9 SASKATOON AREA

10 ELBOW

11 GRAVELBOURG

12 MOOSE JAW

13 BUFFALO POUND AREA

14 WHITE CITY

15 EDENWOLD

16 CUPAR

17 FORT QU’APPELLE

18 MELVILLE

19 RM OF SHERWOOD

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LETTER OF TRANSMITTALMoose Jaw, June 2019

To His Honour The Honourable W. Thomas Molloy, O.C. , S .O.M. Lieutenant Governor of Saskatchewan Province of Saskatchewan

Dear Sir:

I have the honour to submit herewith the Annual Report of the Saskatchewan Water Corporation for the fiscal year ending March 31 , 2019.

The report includes the financial statements, duly certified by auditors for the corporation, in the form approved by the Treasury Board and in accordance with The Saskatchewan Water Corporation Act.

I have the honour to be your obedient servant.

Sincerely,

Bronwyn Eyre Minister Responsible for Saskatchewan Water Corporation

MINISTER’S MESSAGEIt is my privilege to present SaskWater’s 2018-19 Annual Report. SaskWater’s achievements throughout the past year include a number of major projects the corporation can be proud of, as well as another year of safe, reliable service-delivery to customers across the province.

Water and wastewater are key considerations in terms of quality of life in Saskatchewan, not to mention economic growth. As SaskWater delivers innovative and effective solutions to more customers every year, its accomplishments continue to align with the government’s vision for a strong and growing Saskatchewan for anyone looking to work and build a life in our province.

SaskWater’s commitment to the government’s Crown Sector Priorities was evident in 2018-19, as it continued to invest in Saskatchewan through the construction of new facilities and major infrastructure upgrades to ensure the sustainability and safety of its water and wastewater systems. As a provincial Crown utility, SaskWater has approached its major projects in a fiscally responsible fashion, working with stakeholders and finding efficiencies wherever possible. These projects also spur economic development in the regions they affect.

SaskWater is committed to providing unmatched quality and expertise as it delivers its services in the province. This year, it undertook initiatives to evaluate and update business processes and determine how technology could improve them. Work has been done to provide more efficient and reliable service and in the coming year will facilitate the kind of customer focus the province expects from its Crown corporations.

SaskWater has again achieved its mission to provide safe, reliable and sustainable water and wastewater services, while also delivering the type of superior quality, value and innovation that helps build healthy, vibrant communities.

Sincerely,

Bronwyn Eyre Minister Responsible for Saskatchewan Water Corporation

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LETTER TO STAKEHOLDERSSaskWater is committed to being a trusted supplier and partner in every project it undertakes, and in 2018-19, it achieved another successful year. A number of determining factors contributed to this success.

SaskWater brings a wealth of expertise and experience to the industry and is dedicated to providing safe, reliable and sustainable water and wastewater services to its customers. SaskWater’s many endeavours through 2018-19 reflect the vision of SaskWater’s stakeholders and demonstrate our employees’ dedication to the corporate values that underlie success.

SaskWater’s strategic goals align with the strategic priorities of its shareholder, Crown Investments Corporation (CIC). Crown Sector Strategic Priorities established by CIC for 2018-19 include a focus on customers, being financially sustainable, safeguarding infrastructure through investment, supporting the labour force and stimulating economic growth by engaging the private sector. It also set near-term priorities that include strong earnings and targeted investment, while emphasizing a focus on enhanced efficiencies and effectiveness.

SaskWater’s Customer Driven goal aligns with the CIC priority of customer focus. The corporation has developed a customer engagement process to further enhance the quality of dialogue between the corporation and our customers.

Discussions touch on system performance, community growth expectations and capital needs assessment. These meetings provide opportunities to enhance clarity in communication and allow the lead time needed to plan future projects and address potential challenges. SaskWater also signed agreements for service expansions: one with a returning customer and one with an existing customer.

In support of future growth and new customers, SaskWater is working closely with a number of government stakeholders to examine the potential for new regional water supply systems. Expected benefits include: long-term cost savings for communities, ratepayers and governments; improved utilization of certified operators; and financial sustainability of the systems. The work to date includes data mining to identify communities in need of system upgrades, and the development of interactive maps to assess geographic opportunities. SaskWater anticipates engaging further with external stakeholders in 2019-20, as this project builds momentum.

SaskWater also performed pre-construction engineering work in support of a water supply feasibility study for a potash mine project being considered by Canada Golden Fortune Potash Corporation. SaskWater is poised to begin the ground water testing and design phases, as called upon.

In support of the strategic direction for infrastructure, SaskWater’s capital expenditures and asset management system play a vital role.

Construction is in the final stages for SaskWater’s newest water treatment plant (WTP) in Melville. To ensure service continuity during the construction phase of the new WTP, SaskWater purchased the old plant in 2016. The new WTP and water supply system benefitted from $10.2 million in grant funding and the total project required a three-year construction period. It is set for commissioning to begin in September of 2019. It is expected to be complete and in service by the end of the year.

SaskWater seeks grant funding, where available, to ensure major projects meet the corporation’s commitment to safe, reliable and efficient service for its customers. As a result, with capital costs offset by funding programs, communities realize more affordable rates and longevity of their systems.

In 2018-19, grant funding up to $2.1 million was approved for sewage lagoon upgrades in Pierceland. Furthermore, federal and provincial funding will contribute two-thirds of the $8.47 million in eligible costs for backup power and process upgrades to the Melfort WTP. A proposed $12.2 million regional pipeline project in the Lloydminster area was also approved under the cost-sharing program, which would pay up to two-thirds of the cost.

These three projects further exemplify SaskWater’s support for private sector engagement. Typically, SaskWater provides the conceptual design and project management and brings on private contractors and consultants to complete detailed engineering and construction of major projects. The upgrades required for the Melfort system have gone a step further, utilizing a design-build approach to enhance private sector engagement and encourage innovative solutions.

In 2018-19, SaskWater was also intent on financial sustainability as it endeavoured to source further efficiencies and renegotiate agreements on systems that were underperforming. As a result, new agreements were reached for services in both Pierceland and the Melfort region. Sustainable rate structures will now ensure long-term success of both systems.

SaskWater contracted a review of its cost of service model in 2018-19, the first since its implementation in 2007. The consultant confirmed the core aspects of the model are consistent with utility best practices and provided advice on what further work can be done to optimize the model to support the corporation’s efforts. This work continues into 2019-20.

To improve its productivity, SaskWater is investing in business tools including an Enterprise Resource Planning (ERP) software solution to help the business evolve

and grow. Investments in ERP and business process mapping assist staff in performing their daily tasks more effectively. These day-to-day wins make way for more innovation and efficiencies – like those achieved through ongoing pump efficiency initiatives, expanded remote water treatment plant access, added solar panels at SaskWater sites and the continued Advanced Metering Infrastructure (AMI), or smart meter, program. Full installation of the meters was completed in March and they will be making use of the SaskPower AMI network.

In another project aimed at improving our service delivery and expanding expertise, SaskWater initiated a corporate brand project. The objective is for customers to recognize SaskWater as the trusted service provider and partner for their water systems. We considered how we want to be perceived, both internally and externally. We asked ourselves questions like: “What do customers look for in a service provider and partner?” and “How can we best meet their needs?”

In this process, we engaged customers and non-customers for their input. Recognizing each employee has an important role in delivering on our brand, every SaskWater staff member had the opportunity to provide input. The project identified the foundation for the brand moving forward. As the project nears completion in 2019-20, employees will continue to be actively involved in both the launch

of the refreshed SaskWater brand and its implementation.

SaskWater is strongly committed to ensuring staff safety, while it recognizes and respects CIC’s labour force priority. SaskWater implemented a new Personal Protective Equipment policy that demonstrates SaskWater’s professionalism and commitment to employee safety, as well as a Fit for Duty policy. The corporation has also drafted an updated Chemical Safety policy and Return to Work policy to be implemented in the near future.

2018-19 saw some changes at the board level. We offer best wishes to departing members Don Atchison and Gwyn Tremblay. SaskWater extends gratitude and appreciation to these outgoing members for their service and dedication to the growth and betterment of SaskWater. On behalf of our Board of Directors, we welcome new board members Jeff Richards and Alison Green and are in appreciation of their service and commitment to the future success of SaskWater.

As SaskWater continues to support growth in the province and contribute to the quality of life of its residents, we acknowledge our employees are the source of our success. We thank them for their knowledge, expertise and innovation. Their achievements throughout 2018-19 are proof of SaskWater’s dedication to being a value-driven solutions provider and the trusted “go-to” partner in Saskatchewan.

Silvia Martini Chair of the Board

Doug Matthies President and CEO

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MANAGEMENT DISCUSSION AND ANALYSISThe following is a discussion of the financial and operating results for SaskWater for the fiscal year ended March 31, 2019. The information should be read in conjunction with the audited financial statements and accompanying notes, which have been prepared in accordance with International Financial Reporting Standards.

The discussion includes a summary of SaskWater’s strategic plan, our lines of business, the planning model used by SaskWater, a discussion of each of the four key objectives identified in the plan (Customer Driven, Pursuing Excellence, Valuing Employees and Succeeding Financially), the balanced scorecard results for each objective and the corporate and social responsibility initiatives associated with each objective, financial results for the year, capital investment, liquidity and capital resources, the 2019–20 outlook, new accounting standards adopted in the year, potential future accounting changes and the company’s approach to risk management.

Some of the discussion may contain forward-looking statements that are subject to inherent uncertainties and risks. Actual results of future operations may vary significantly from statements in this discussion.

SUMMARY OF SASKWATER’S STRATEGIC PLANSaskWater’s strategy supports the strategic direction provided by Crown Investments Corporation (CIC), on behalf of the Government of Saskatchewan.

The focus of the current five-year plan is on achieving growth, diversifying revenues and enhancing competitiveness.

SaskWater continues to be heavily reliant on the potash industry, with 66 per cent of the volume of all water services and 38 per cent of all water services revenue coming from the potash sector in 2018–19. To mitigate this risk, SaskWater is focussing on growing and diversifying its customer base and service offerings.

Increasing the number of municipalities served represents a significant opportunity for SaskWater. To be successful with this approach, SaskWater is seeking opportunities to leverage economies of scale and the skill set of its certified operators to provide regional services to multiple communities, or targeting larger individual communities where there is the potential for future service to surrounding communities.

Regionalization of water services, such as in a hub and spoke model where a water treatment plant in one community serves the surrounding communities via a network of pipelines, can potentially reduce the long-term capital needs and operating costs of all communities, better utilize the scarce resource of certified operators, support competitiveness and growth in the service area, allow for a sustainable financial model and reduce the pressure on senior levels of government for ongoing grant support. Another aspect of regional opportunities would be to have certified operators work in the facilities of adjacent communities as an interim step until water treatment plants in those communities reach the end of their useful lives and then a common facility can be considered.

SaskWater is working with a number of other government partners and stakeholders to explore where regional areas within the province may make the most sense and how communities can be encouraged to participate in regional discussions. This discussion may, in the future, include different business models and partnerships that have not been the norm to date.

SaskWater will also continue to work with commercial and industrial stakeholders in support of economic growth in the province, particularly for projects outside of major urban centres. Projects inside large municipalities would likely be served directly by the community rather than be opportunities for SaskWater. There are several factors that businesses consider before making site location decisions. SaskWater’s objective is to work with stakeholders so they understand the implications and potential options for water services, particularly if the location requires new capacity to be constructed at a significant cost.

New lines of business will be explored further in the future, including remote monitoring services, expanded project management services and wastewater woodlots. SaskWater will continue to explore its potential to diversify into a full service provider that includes door-to-door distribution, wastewater collection, metering and billing.

To ensure service rates are as affordable as possible to customers, SaskWater regularly reviews its operations for efficiency and participates in collaboration with other Crown corporations and ministries to avoid costs, reduce costs, increase productivity or identify new service opportunities.

A significant example of the results of this type of collaboration is the work that has been done with SaskPower to utilize their Advanced Metering Infrastructure (AMI) network. SaskPower’s network provides SaskWater with an opportunity to transition its aging metering infrastructure to more efficient technology that will provide real-time data regarding water consumption. This partnership with SaskPower allows SaskWater to gain a valuable tool while avoiding the associated infrastructure investment. The capital cost for SaskWater to create its own network would have been $5 million. In addition to the capital savings, SaskWater anticipates future operational savings by moving to AMI.

An important productivity enhancement that was initiated in 2018–19 was the selection of an Enterprise Resource Planning solution and implementation partner. SaskWater’s existing information technology systems include a number of independent systems, many based on Excel applications, which are cumbersome and require redundant data entry. The system also has limited capabilities, which results in significant manual efforts to compile reports and respond to information requests. Implementation of the new system is expected to occur during 2019–20.

Another very important aspect of the corporation’s strategy is to understand relevant grant programs and ensure the required application and supporting documentation is submitted to funding agencies for all major capital projects. Capital costs not covered by grants are typically financed initially by SaskWater and then recovered over time through

rates. This is similar to the approach used by municipalities not served by SaskWater. Regardless of who the service provider is, any grant that is received helps keep water rates more affordable to ratepayers. Where potential new customers are involved, the ability to receive a grant will in many cases determine whether an opportunity continues to move forward or not.

The CIC goals and SaskWater’s plan for customer service places a priority on the continuation of safe, reliable and sustainable water and wastewater services. To accomplish this, the corporation has invested significantly in developing the appropriate policies and procedures, training staff, ensuring operations manuals and other resources for quality control and assurance are in place, installing critical control and monitoring systems and implementing an asset management system. The corporation also considers key asset redundancy measures to ensure, where feasible, that replacement parts or equipment are on-hand in the event of a service disruption in order to minimize impacts to the customer.

Safe service also includes the safety of our employees and contractors who work with our facilities. SaskWater has been growing our safety culture and developing new policies and procedures, where required, to address significant risks or issues.

A final significant part of the strategy is to ensure the rates charged to customers support the financial sustainability of the system. When SaskWater’s mandate was revised in 2002 to be a commercial entity, many of the existing customer service contracts were long term and not set with full cost recovery or return for risk and effort included in the rates. These are referred to as legacy contracts. As these contracts have been reaching maturity, or the systems became in need of significant capital upgrades, SaskWater’s strategy has been to work with customers to reset the rates. By the end of 2018–19, only one legacy contract remains to be addressed.

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NON-POTABLE WATER SUPPLYSaskWater’s non-potable water supply business refers to the delivery of water that is not suitable for human consumption in accordance with applicable regulations.

The majority of SaskWater’s non-potable water supply is delivered in large volumes to industrial customers for processing and manufacturing operations, including potash mines and fertilizer manufacturers.

Municipal customers also purchase non-potable water from SaskWater. These customers own water treatment facilities and perform their own treatment processes prior to residential delivery.

SaskWater owns and operates non-potable water systems in the areas surrounding Saskatoon, Buffalo Pound Lake and along the Saskatoon Southeast Water Supply System.

In 2018–19, SaskWater delivered 39.9 billion litres of non-potable water.

WASTEWATER TREATMENT AND MANAGEMENTA long-standing issue in wastewater management is the need for environmentally sustainable wastewater treatment and disposal solutions. SaskWater provides solutions ranging from simple lagoon-based treatment to complex mechanical and/or chemically aided treatment systems.

An example of an environmentally sustainable wastewater disposal method is effluent irrigation onto a woodlot. SaskWater’s research in this field has led to the development of an effluent disposal process involving a woodlot with zero discharge to the environment.

SaskWater owns and operates wastewater facilities in Nipawin, Pierceland and Fort Qu’Appelle. The Pierceland facility is a stand-alone system. The Nipawin and Fort Qu’Appelle facilities are regional wastewater systems serving multiple customers either through force mains or dump stations for commercial truck haulers.

In 2018–19, SaskWater received and treated 1.0 billion litres of wastewater.

CERTIFIED OPERATION AND MAINTENANCE (COM)SaskWater contracts with 14 communities and rural pipeline groups to provide certified operation and maintenance of their water and wastewater systems, including:

• non-potable water supply

• water and wastewater treatment plants

• treated water storage facilities

• distribution systems

• wastewater collection and disposal

The above services are supervised or performed by certified operators.

COM also provides regulatory reporting and consultation, emergency planning, remote monitoring and customer support services.

SaskWater is able to offer the services of its qualified certified operators to communities and rural pipeline groups located near our existing operating centres.

SASKWATER’S CORE LINES OF BUSINESS• potable water supply

• non-potable water supply

• wastewater treatment and management

• certified operation and maintenance (COM)

• project management

• water and wastewater training

• remote monitoring

• leak detection audits

POTABLE WATER SUPPLYSaskWater’s potable water supply business refers to the delivery of water that is suitable for human consumption in accordance with applicable regulations. Municipalities represent the largest consumers of potable water. SaskWater also delivers potable water to rural pipeline groups and businesses.

The majority of SaskWater’s municipal customers own and operate their local distribution systems and manage the relationship with their residents. SaskWater provides wholesale water delivery service to the community, which then delivers the service to its residents.

STAND-ALONE SYSTEMSSaskWater’s mandate enables the corporation to purchase and operate municipal water infrastructure or to construct new water supply and treatment systems. SaskWater currently owns and operates stand-alone systems in White City, Pierceland, Edenwold, Gravelbourg and Cupar.

REGIONAL SYSTEMSFor many rural communities, a regional water system is the most cost-effective and sustainable solution to their water needs.

SaskWater owns and operates the Wakaw-Humboldt, Codette Lake, Elbow and Melville regional potable water systems. These systems consist of a single treatment plant that produces and distributes potable water to surrounding communities through a pipeline network. Water treatment plants for these regional systems are located in Wakaw, Melfort, Elbow and Melville. Together, these systems supply potable water directly to 19 communities and several rural pipeline groups.

SaskWater also owns and operates two regional potable water systems where the water is purchased from other suppliers. SaskWater purchases potable water from the City of Saskatoon and delivers it to surrounding communities, industries, other commercial businesses and rural pipeline groups through an extensive pipeline network. SaskWater also purchases potable water from the Buffalo Pound Water Administration Board, the City of Regina and the City of Moose Jaw, sourced from the Buffalo Pound Water Treatment Plant, and delivers it to customers in the surrounding areas.

In 2018–19, SaskWater delivered 7.8 billion litres of high-quality drinking water.

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SASKATOON SOUTHEASTNon-potable Water Supply System

BUFFALO POUND AREANon-potable Water Supply System

1. Broderick 2. PCS Allan 3. Mosaic Potash Colonsay ULC 4. Viscount

5. PCS Lanigan 6. BHP Jansen 7. Shields

Gardiner Dam East Side Pump Station

City of Moose Jaw

Mosaic & YaraPump Stations

K+S Pump Station

Qu’AppelleRiver

Wascana Creek

BuffaloPound Lake

Moose Jaw River

SouthSaskatchewanRiver

BradwellReservoir

BroderickReservoir

BlackstrapLake Zelma

Reservoir

DellwoodReservoir

BrightwaterReservoir

1. K+S Potash Canada 2. Terra Grain Fuels Inc. 3. Temple Gardens Mineral Spa 4. Yara Belle Plaine Inc. 5. Mosaic Potash Belle Plaine 6. Waldorf Ranch

SASKATOON AREANon-potable Water Supply System

1. Agrium Potash 2. Vanscoy 3. PCS Cory and SPI/ATCO 4. Cedar Villa

5. Golf Courses (WGCC/SGCC/Greenbryre) 6. Cargill

Saskatoon RiverPump Station

Queen ElizabethPump Station

City ofSaskatoon

Regina EastPump Station

SaskWaterTreatment Plant

SaskWaterTreatment Plant

SaskWaterTreatment Plant

REGINA EASTPotable Water Supply System

Qu’AppelleRiver

Wascana Creek

City of Regina

1. White City 2. Edenwold 3. Cupar

MELFORT AREAPotable Water Supply System

WAKAW-HUMBOLT AREAPotable Water Supply System

1. St. Louis 2. Hoey 3. St. Isidore-de-Bellevue 4. Domremy 5. Wakaw 6. One Arrow First Nation 7. Cudworth

1. Weldon 2. Kinistino 3. Beatty 4. Melfort 5. Star City 6. Star City Farming 7. Melfort Rural Pipeline Association

Codette LakePump Station

SaskWaterTreatmentPlant

Saskatchewan River

Carrot River

River PumpStation

SaskWaterTreatmentPlant

SouthSaskatchewanRiver

8. Bruno 9. Humboldt 10. Muenster 1 1 . Annaheim 12. Lake Lenore 13. SHL Pipeline Association 14. North Central Rural Pipeline Association

SASKATOON AREAPotable Water Supply System

1. Hepburn 2. Hague 3. Osler 4. Dalmeny 5. Aberdeen 6. Warman 7. Martensville 8. ERCO Worldwide 9. BizHub Developments Ltd.

City of SaskatoonCity of Saskatoon

10. Akzo Chemicals 11 . Sloboshan Ent. Ltd. 12. Prairie Pride Chick Sales Ltd. 13. Chemtrade West 14. Sunset Estates 15. Grasswood 16. Cargill Ltd. 17. Casa Rio/Wood Meadow 18. Clavet 19. Bradwell

20. Elstow 21. Allan 22. Dundurn Rural Water Utility 23. Highway 41 Rural Water Utility 24. Yellowhead Industrial Park 25. Allan South Rural Water Utility 26. Intervalley Inc. 27. Lost River Water Co. 28. Sask Valley Rural Water Utility

BUFFALO POUND AREAPotable Water Supply System

1. Bethune 2. Arm River Farming 3. Buffalo Plains Cattle Company 4. Disley 5. K+S Potash Canada 6. Marquis

BuffaloPound Lake

Qu’AppelleRiver

City of ReginaWater Line

Buffalo PoundWater Treatment PlantBuffalo PoundWater Treatment Plant

City ofMoose Jaw

City of Regina

6

7. Tuxford 8. Yara Belle Plaine Inc. 9. K+S Windsor Salt Ltd. 10. Grand Coulee 11 . Caron/Mortlach Regional Public Utility Board 12. Dufferin Water Assoc.

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PROJECT MANAGEMENTSaskWater provides project management services for customers to plan and manage the design and construction of water and wastewater infrastructure projects.

In 2018–19, SaskWater’s project management activities included the completion of a feasibility study/preliminary design for a non-potable water supply system for the Canada Golden Fortune Potash Corporation’s proposed potash mine near Broadview. In addition, a conceptual design and environmental screening was completed for a regional potable water supply system east of Lloydminster.

SaskWater also plans and manages the design and construction of water and wastewater infrastructure in northern Saskatchewan on behalf of the Ministry of Government Relations. From its Prince Albert office, SaskWater provides ongoing technical advice to northern communities and First Nations for maintenance and expansion of their water and wastewater infrastructure, including responding to community emergencies related to that infrastructure.

WATER AND WASTEWATER TRAININGSaskWater works on behalf of Indigenous Services Canada to provide operations training to Saskatchewan First Nations. In 2018–19, SaskWater trained 73 water and wastewater operators at 29 First Nations.

The goal of SaskWater’s training program is to assist in providing a safe water supply to residents and to safeguard their valuable water and wastewater infrastructure investment. The program began in 1978, and has evolved over the years to suit the specific water and wastewater operational needs of First Nations communities as they adapt to frequently changing technology and increasingly stringent regulatory requirements.

Benefits to First Nations communities include:

• enhanced quality of water and wastewater operation

• emergency technical assistance as required

• limited service disruptions and threats to public water quality and supply

• progressive operator development, including certification tutorial support

• annual water consumption records collection and reporting, representation at project management team meetings on behalf of First Nations receiving new facilities or significant facility upgrades and, upon request, participation in relevant stakeholder meetings

ROAM REMOTE MONITORINGROAM – Remote Oversight and Monitoring – provides continuous monitoring of water and wastewater facilities for customers who wish to retain both ownership and operation of their systems.

Partnering with TransGas (a subsidiary of SaskEnergy), SaskWater currently uses a Supervisory Control and Data Acquisition (SCADA) system to remotely monitor 56 SaskWater and customer-owned facilities across the province 24 hours a day, 365 days a year.

ROAM employs certified operators who can monitor water treatment plants, wastewater treatment plants and distribution systems. On its own facilities, remote monitoring helps SaskWater increase safety, improve service, enhance water quality monitoring and reduce costs.

The benefits for the customer include providing a higher level of service to residents and customers through constant monitoring and the ability to respond proactively to plant fluctuations and troubleshooting, potentially saving time and money.

LEAK DETECTION AUDITSSaskWater provides leak detection audits using noise correlator technology to detect subsurface water leaks on distribution systems. Our team of highly qualified professionals is trained and equipped to support our customers with this industry best practice for maintenance and asset management.

This service strengthens SaskWater’s commitment to provide safe, quality water to Saskatchewan communities as leaks of any size can damage infrastructure, contaminate a water supply, deprive a community of considerable revenue and waste a valuable natural resource.

18 19

System Reliability Index

Asset Renewal and Replacement

Water Quality Index

Corporate Operating Ratio

Corporate Productivity per Full-time Equivalent (FTE)

Ensure our infrastructure is safe, reliableand efficient

Continue to provide safe and reliable water that meets and exceeds regulatory requirements

Identify and implement efficient and effective business and operational processes

Goals Objectives Balanced Scorecard Measures

Identify targeted growth opportunities and service offerings

Commited Capital in New Growth

Net Investment Value of Qualified Projectsin the Queue

% Time Met RFS Timelines

Customer Satisfaction SurveyStrengthen customer partnerships andstakeholder relationships

Improve timelines and responsiveness to service requests

Employee Engagement Survey

Retention Rate

Total Recordable Injury Rate (TRIR)

Lost Time Injury Severity Rate (LTIS)

Create a challenging and rewarding workplace

Recruit and retain qualified people

Provide a workplace that promotes safety and employee health and well-being

Debt to Debt and Equity

Return on Equity

Net Income

Operate within debt ratio approved by shareholder

Achieve return on equity targets approvedby shareholderSTRATEGIC DIRECTION

We are the best at connecting water for life and growth, partnering for a better tomorrow.

VISIONTo provide safe, reliable and sustainable water and wastewater services for Saskatchewan.

MISSIONIntegrity Professionalism Teamwork Safety Innovation Environment

VALUESGrowth, Diversification and Competitiveness

STRATEGIC FOCUS

STRATEGIC PLAN AND BALANCED SCORECARD SaskWater’s 2018–19 strategic plan articulates the goals and principles that guide the corporation in achieving its long-term vision. Specifically, it lays out the path to achieving SaskWater’s mission, values, corporate goals and objectives. The strategic plan is reviewed annually by the organization’s Board of Directors in consultation with SaskWater staff and executive. It is also approved by the Crown Investments Corporation (CIC), which ensures that all provincial Crown corporations are meeting provincial expectations.

This strategic plan reinforces our mission to provide safe, reliable and sustainable potable and non-potable water to Saskatchewan residents and industry. It builds on our commitment to the customer, the continued growth of our organization, our responsibilities as a provincial Crown corporation, and the health and wellness of all SaskWater employees.

Four key priorities were identified within the strategic plan:

• Customer Driven

• Pursuing Excellence

• Valuing Employees

• Succeeding Financially

Maintaining a Customer Driven priority promises that SaskWater will provide excellent, high-quality customer service to all existing and future customers. SaskWater partners with its customers to ensure that their needs are being met and that continued satisfaction of service is achieved and maintained.

SaskWater understands its role in maintaining healthy and vibrant communities in Saskatchewan. Through Pursuing Excellence, SaskWater will deliver efficient and effective services in a socially and environmentally responsible manner.

The Valuing Employees goal speaks to the importance of providing a safe, supportive and rewarding workplace for employees so that they can excel at their work.

As SaskWater finds success in the above priorities, it will progress toward its goal of Succeeding Financially. SaskWater will continue to increase shareholder value by maintaining the financial sustainability of the corporation.

SaskWater measures its progress on its strategic goals and objectives through the Performance Management Program and uses a Balanced Scorecard to report the results. The corporate balanced scorecard identifies targets that challenge the corporation in its implementation of short-term and long-term plans. Performance results are reported to CIC quarterly, and SaskWater is accountable to the shareholder for meeting its targets.

Each of the following four sections discusses SaskWater’s corporate goals, outlines the balanced scorecard targets and results for those goals and identifies the corporate initiatives that support SaskWater’s strategic direction.

c u s t o m e r d r i v e n20 21

KEY STRATEGIC OBJECTIVES• Identify targeted growth

opportunities and service offerings

• Improve timeliness and responsiveness to service requests

• Strengthen customer partnerships and stakeholder relationships

“ We are committed to providing exceptional and innovative service to ensure high customer satisfaction. We will demonstrate that we are trustworthy, we care and we deliver.”

01CUSTOMER DRIVEN

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OUT WITH OLD, IN WITH NEWNew water treatment plant taking shape in Melville.As the 2018–19 fiscal year came to a close, significant progress could be observed on the construction site of SaskWater’s Melville Water Treatment Plant (WTP).

“ It ’s even more of an appealing structure than what the plans show,” said Tim Jansen, describing the building exterior, which was complete, save some brick siding.

Jansen, SaskWater Manager, Construction Engineering, explained that the superstructure of the water treatment plant was in place while work was still ongoing to complete the electrical and mechanical components.

The below-ground reservoirs had all been completed and three of the eight had undergone leak testing. Electrical panels were on the wall in the electrical room and some of the remaining pipework was underway.

“We’re very pleased with the outcome from the various contractors,” Jansen commented. “The contractors and consultants on the project are adept at their work and they’ve done a very good job of designing and building a system that is reliable.”

Jansen explained that the project is approximately a month behind schedule as a result of severe winter weather. He expects that time can be recaptured over the summer. Phase 1 of the commissioning is slated to begin in September with the goal of completing the second phase by the end of 2019.

Jansen noted the Melville staff is looking forward to the upcoming completion date.

“The old plant has outlived its life expectancy, and there are some innovative solutions in place to keep it operational,” Jansen said, noting the original plant was built in 1959, with expansions in 1985 and 1990. SaskWater assumed ownership of the WTP in 2016 when a water supply agreement was signed with the City of Melville. It includes provisions to build a new water supply system. “It ’s going to be quite a welcome change to have infrastructure like this to work with. We’re being proactive and developing a plant capable of meeting future needs of the community and surrounding area.”

The new WTP will be the centrepiece of SaskWater’s new potable water supply system, which will serve approximately 6,000 people in and around the City of Melville. To date, the project has involved developing two wells, adding a new well control building and installing and testing a 30-kilometre pipeline running from the wells to the WTP site. Maintenance and upgrades were completed on the system’s two existing wells and improvements were made to the water treatment plant’s wastewater system, all of which will tie into the new supply system.

While Jansen called the current progress on the project “satisfying and gratifying,” he’s eager to see the new plant in action.

“The best part will be when we can demonstrate to the community that we can improve their water quality as well as their water security,” Jansen explained. “It’s been really great to be part of a project of this magnitude where you’re benefitting a large population.”

The best part will be when we can demonstrate to the community that we can improve their water quality as well as their water security.

“Tim JansenSaskWater Manager, Construction Engineering

“

24 25

SMOOTH OPERATIONS FOR SHERWOODRM of Sherwood creates new partnership with SaskWater.Unforeseen circumstances for the RM of Sherwood resulted in a valued new partnership for SaskWater in 2018–19.

With plans to build its own water treatment plant (WTP) well underway, the RM found itself without an operator for its water supply system. The RM, which had once contracted SaskWater to operate the booster station on its transmission line, turned to the corporation to temporarily fill the void.

“SaskWater was able to get everything together to quickly step in and get to work,” explained Nish Prasad, SaskWater Account Manager.

An interim plan to provide operations and maintenance of the booster station was established in short order.

Prasad said that SaskWater has enjoyed a very good working relationship with the RM and the operations staff soon became a trusted resource for the RM as they forged ahead with their water treatment plant project.

“Our operations manager was asked to help review the plant designs, and he suggested changes to make the process more efficient and effective,” Prasad explained.

SaskWater operations staff became technical advisors to the RM as the project advanced, and served as a liaison between the RM and the project regulators and contractors.

“We worked closely with the RM of Sherwood to ensure they were getting a system that fit their needs and that they had an understanding of how it was going to serve them,” explained Darin Orb, SaskWater Manager, District Operations.

Prasad noted that these value-added services helped establish SaskWater’s strong relationship with the RM.

Eventually, a more permanent Certified Operation and Maintenance agreement was developed and SaskWater undertook the full commissioning and start-up of the WTP in November 2018. SaskWater

now oversees operation and maintenance of the WTP for the RM, including services such as staffing, water distribution and maintenance of the distribution system.

“There’s an advantage to being there from the beginning,” Orb said. “We can build our operations plan as we’re starting up the equipment and seeing how it works. We can ask questions based on our experience and troubleshoot before we even get going.”

Orb noted that by participating in the commissioning, SaskWater was able to identify tweaks to the wastewater disposal system that saved both time and money for the plant. Pump upgrades were also suggested to ensure continuous regeneration of the filter media and prevent elements such as iron and manganese from breaking through the filtration process.

The RM of Sherwood’s WTP currently supplies potable water to the rural municipalities’ commercial and industrial customers. The newly constructed plant draws source water from the Regina Aquifer via two wells and uses manganese greensand filtration as the treatment process.

It has a total treatment capacity of 24 litres per second and has provisions in place for the addition of two wells, offering ample capacity to serve future industrial, commercial or residential development within the RM’s boundaries, northeast of Regina.

The design includes storage in three below-grade concrete reservoirs; each reservoir has a capacity of approximately 780 cubic metres.

SaskWater pulls from a team of six certified operators in the region to staff the RM of Sherwood WTP, with the support of Instrumentation and Electrical Operations staff. SaskWater also provides 24-hour monitoring through SaskWater’s Supervisory Control and Data Acquisition (SCADA) system.

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TESTING THE WATERSPotash mine feasability study among SaskWater major projects.In 2018–19, SaskWater conducted significant preliminary work on a non-potable water supply system to service a proposed potash solution mine in the RM of Chester.

Canada Golden Fortune Potash Corporation (CGFPC) engaged SaskWater’s services to complete a feasibility study and provide a technical project proposal for the mine’s water supply system.

The feasibility study identified the Hatfield Aquifer as a potential viable water source for the project, and recommended a 40-kilometre pipeline route to the proposed mine site, approximately 12 kilometres south of Grenfell. A booster station would be located at approximately half the distance of the pipeline.

“We want to provide reliable service to the customer, but we are also concerned with building long-term relationships with landowners, and obtaining acceptance and support from those who will be impacted by the project,” explained Chris Robart, Manager, Construction Engineering for SaskWater.

In selecting the pipeline route, SaskWater considered which path would have the least overall social, environmental and heritage impact, while providing the most economic benefits in terms of construction operations and maintenance costs.

The feasibility study encompassed a comprehensive environmental assessment and stakeholder

engagement program. SaskWater conducted environmental surveys to avoid and mitigate impacts to rare and endangered species, environmentally sensitive areas such as wetlands or native prairie and heritage resources. SaskWater will also develop a project-specific Environmental Protection Plan for construction based on this assessment.

As a part of this process, SaskWater conducted two open house events in 2018–19 to connect with residents in the area.

“SaskWater considers stakeholder engagement and public involvement critical to the success of any project,” said Nish Prasad, SaskWater Account Manager for the project. He said feedback from the meetings was largely supportive and SaskWater is maintaining open channels of communication with stakeholders as it looks forward to the next phases of the project.

The technical project proposal, also prepared by SaskWater, was submitted and received approval by the Ministry of Environment in January 2019.

SaskWater has provided CGFPC with a preliminary design and initial cost estimate for the water supply system. Pending approval from CGFPC for the next phase, SaskWater’s next steps on the project would involve detailed engineering design work, land control, investigation and testing of the groundwater supply, and obtaining regulatory permits.

WORKING WITH NEIGHBOURSGrant funding spurs on regional pipeline project.Grant funding was announced in 2018–19 to advance a SaskWater regional water supply initiative east of Lloydminster.

“We’ve been working with the RMs and communities in that area for some time now, talking about the potential for a regional system and the benefits they provide,” said SaskWater Account Manager Chad Braun. “Receiving grant funding really makes a project like this far more feasible.”

In March 2019, the New Building Canada Plan – Provincial Territorial Component – National and Regional Projects announced funding for the Prairie North Regional Potable Water Supply System, a project with a total eligible cost of $12.2 million.

Through the New Building Canada Fund, the federal and provincial governments together will provide two-thirds of the cost toward the project, while SaskWater will invest the remaining capital.

Braun noted that communities on a SaskWater-owned and operated regional transmission pipeline would benefit from lower capital investment on infrastructure upgrades, reduced liability and lower operating costs over the life of the infrastructure, compared to those associated with owning and operating their own water supply system.

The project is currently in the preliminary design phase.

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LOOKING NORTHWARDA trusted resource in northern Saskatchewan communities.When it comes to managing water and wastewater infrastructure projects, SaskWater has become a trusted resource for northern Saskatchewan communities. In 2018–19, SaskWater was asked to apply its project management expertise to a broader scope of municipal infrastructure – specifically Lac La Ronge Waste Management Corporation’s regional landfill project.

“There’s more to a landfill than one might think, so it’s been a fair challenge,” said Glen Gillis, SaskWater Manager, Northern Engineering. Gillis is overseeing the landfill project and said that while he’s had to learn about new regulations and other project-specific details, at the end of the day, it’s not unlike managing other projects he’s tackled during his lengthy stint in the province’s North.

“Ultimately, we’re project managers,” agreed Gillis’ colleague, Kevin Cudmore, Manager, Northern Engineering. “Not just water and wastewater project managers, but municipal project managers. We’re familiar with all of the communities and know the contacts, so it made sense.”

SaskWater’s track record in the North supports Cudmore’s conclusion. In 2018–19, SaskWater provided project management on 32 projects under contract to the Ministry of Government Relations and the Northern Municipal Trust Account, 14 of which were grant-funded. SaskWater also acted as project manager for the Lac La Ronge Regional Water Corporation Water Supply System, from conceptual design through to construction, and continues to provide capital planning and administrative services, as well as certified operation and maintenance services for the system.

Gillis said that SaskWater became involved in the regional landfill due to its strong working relationship with all parties involved and various agencies working throughout the region.

“They trust us to do this type of work,” Gillis said, “and our Northern Engineering Unit can certainly deliver on what we promise to do for them.”

The regional landfill partners include the Town of La Ronge, Northern Village of Air Ronge, Northern Hamlets of Weyakwin and Timber Bay, Northern Settlements of Missinipe and Brabant Lake, Lac La Ronge First Nations Communities of Kitsaki (IR 156,

IR 156B), Morin Lake, Sucker River, Stanley Mission and Grandmother’s Bay, and a number of Northern Saskatchewan Administration District subdivisions. It will also service Tourism Saskatchewan campsites and facilities; however, they are not part of the ownership group.

In March, 2018, SaskWater completed feasibility studies for the communities noted above, which examined the most economical way for those communities to handle their solid waste. They considered the benefits of constructing individual landfills versus creating community waste transfer stations and hauling the waste to an alternate location – either the Prince Albert Landfill or the proposed regional landfill. Gillis also completed a feasibility study for the regional landfill project.

The various study results supported the development of a regional landfill located five kilometres south of Air Ronge, adjacent to an existing regional landfill. The current regional landfill is not an engineered landfill. It does not meet Ministry of Environment regulatory requirements and will require decommissioning, as will any existing landfills in the partner communities.

Pre-design and design of the regional landfill and related facilities were mostly completed by March 31, 2019. In addition, the 31-hectare site had been cleared of trees.

The next scheduled phase of the project involves the earthworks for a new 1.1-kilometre access road, a landfill cell with 10-year capacity and related leachate pond, an operations area and related storm water collection pond, a hydrocarbon farming area and related leachate pond, as well as drainage improvements.

The project also includes the construction of a new equipment storage building, scale building, weigh scale and a bin area accessible to residents hauling waste.

The design and construction of the community waste transfer stations will be completed under separate projects. This work will begin in 2019–20 and SaskWater will act as project manager for the individual municipal facilities.

The design and construction to decommission the existing regional landfill cannot be completed until the new landfill has been in operation for approximately one year.

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CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY INITIATIVESSaskWater’s corporate social responsibility and sustainability initiatives are guided by the Corporate Social Responsibility and Sustainability Principles policy that our Board of Directors approved in 2013. Customer Driven activities include community consultations and our Community Investment program.

COMMUNITY CONSULTATIONSSaskWater conducts community consultations to provide a forum for communities and individuals to learn and ask questions about SaskWater projects that may impact them. During 2018–19, community open houses and information meetings took place in Melville and Elbow regarding infrastructure upgrades on those systems, as well as in Grenfell and Broadview for a potential industrial project in the area.

SaskWater delivered customer engagement sessions to six customer groups in 2018–19. Presentations were done for the towns of Cupar, White City and Gravelbourg, the Village of Pierceland as well as customers in the Melfort and Wakaw-Humboldt service areas. The customer engagement process gives municipal representatives the opportunity to ask questions about the services they receive from SaskWater, understand how the system is performing and identify and discuss current and future capital and operational requirements.

COMMUNITY INVESTMENTAs one of Saskatchewan’s commercial Crown corporations, we embrace our social responsibility to make a positive contribution each year to Saskatchewan communities. In 2018–19, we sponsored and/or provided promotional items to 84 events in 39 communities.

SaskWater’s Community Investment Policy defines four categories of support: Community Enhancement, Environment/Sustainability, First Nations/Diversity and Partnership.

Supporting the communities we serve is important to SaskWater, and in 2018–19, we continued to provide sponsorships to several of our customer communities through a wide range of opportunities, including:

• the Village of Bradwell and Village of Lake Lenore’s fundraising efforts to support renovations to their arenas

• the City of Melfort’s playground program

• the Village of Mortlach’s family park project fundraiser

• a donation to STARS Air Ambulance on behalf of the Village of Elbow

• financial support to the City of Humboldt, as well as area first responders, after the Humboldt Broncos bus accident

• events such as fundraiser dinners, rodeos, golf tournaments, fish and boat derbies and music jamborees

In the categories of Environment/Sustainability and First Nations/Diversity, we provided support to events and organizations, including:

• Atamiskakewak National Gathering

• Saskatchewan Alexander Graham Bell Association for the Deaf and Hard of Hearing

• Lake Diefenbaker Task Force Against Aquatic Invasive Mussels

• Saskatchewan Polytechnic Hannin Creek Education and Applied Research Centre

• Back to Batoche Festival

• 2018 Treaty 4 Gathering

Partnership-related support included:

• a Saskatchewan Polytechnic bursary in the water resources diploma program

• a donation to the Jim Pattison Children’s Hospital on behalf of all of our customers in lieu of Christmas cards

• sponsorship of the University of Regina’s Faculty of Engineering and Applied Science Project Day

SaskWater is also committed to using our Community Investment program to offer educational experiences to students in our customer communities. Some of the ways we accomplished this in 2018–19 included:

• using the benefits of our Saskatchewan Science Centre corporate membership to send students to the Science Centre

• providing support for science camps for EYES – Education Youth in Engineering and Science

Churchill School in La Ronge takes SaskWater conservation title.In 2018–19, SaskWater put out a call for student-led conservation initiatives and La Ronge’s Churchill Community High School answered – loud and clear.

The SaskWater Conservation Champs Challenge tasked students with spreading conservation education in their school or community by taking on a project that had a positive environmental impact.

“The Churchill students didn’t stop at one project and their impact was undeniable,” said Suzanne Boyer, SaskWater Senior Corporate Communications Consultant. “Their habits, behaviours and leadership have undoubtedly influenced other students and teachers, and reached beyond the walls of their school.”

Under the direction of teacher Melissa Cromarty, the students of Churchill’s Alternate Education program took the lead in the school’s conservation efforts.

Task No. 1 at Churchill was to discourage bottled water use in the school. Cromarty’s students sold refillable metal water bottles for the same cost as one bottle of water. Returned metal bottles were sanitized, refilled and resold. One hundred metal water bottles were sold from March 2018 to June 2018, and the sale of plastic bottled water decreased dramatically.

As their second initiative, students introduced reusable plates and bowls for use in their cafeteria and helped wash them at lunchtime, noticeably reducing the amount of Styrofoam waste and plastic recycling.

The Alternate Education class also oversaw a recycling station where bins were available to sort and collect the students’ compostable leftovers and recyclable containers. Plastics were cleaned in washtubs to ensure they were recycled and not discarded due to contamination. Even leftover water was collected in a jug and used to water plants.

All collected cardboard, paper and plastics were taken to the local recycling centre and in a span of five months, a total of 104.46 kilograms of plastic was kept out of the landfill. Empty beverage containers were taken to the SARCAN recycling depot and funds were used for more conservation initiatives.

“We strive to increase and improve our environmental education and conservation efforts each year,” said Cromarty. “We are very grateful to SaskWater for their efforts in raising awareness of water conservation issues and encouraging schools to take action.”

Cromarty’s students also led the school’s composting program consisting of seven 94-gallon compost bins. In 2018–19, they added a 240-gallon bin and built a 1 ,912-gallon wooden composter. Compost is used in the school garden where food, such as potatoes, is grown for the school cafeteria.

SaskWater’s Conservation Champs Challenge was issued to 115 schools in communities and First Nations served by SaskWater.

“SaskWater stands for values like teamwork and innovation as we strive to protect the environment we work in,” said Boyer. “We wanted to encourage young people in our customer communities to do the same and were thrilled to see the Churchill students respond with so much dedication.”

As SaskWater’s official 2018–19 Conservation Champs, Churchill Community High School received a new water fountain with a bottle filling function to help them eliminate even more disposable water bottles from the school.

c u s t o m e r d r i v e n32 33

The Net Investment Value of Qualified Projects in the Queue is another new growth measure introduced in 2018–19. The measure assesses SaskWater projects that have a high potential of being signed to a service agreement within the next three years. The measure evaluates each project and determines the capital spend required of SaskWater to commence with the project. The measure’s target of $42.5 million represents capital commitments three times the three-year capital target of $14.2 million assigned to the Committed Capital in New Growth measure. Given that potential opportunities do not always come to fruition as projects, maintaining a target three times the Committed Capital in New Growth measure increases the likelihood SaskWater will meet its growth targets, now and into the future. SaskWater did not meet its Net Investment Value of Qualified Projects in the Queue target for 2018–19. SaskWater’s current focus has been moving forward on high-potential projects currently in the queue, rather than prospecting for new leads.

SaskWater will continue to drive its growth objectives through actively targeting municipal and industrial customers for water and wastewater services, while expanding the organization’s ancillary services, such as ROAM, Certified Operation and Maintenance (COM) and Project Management. SaskWater will continue to seek out larger population centres for stand-alone municipal systems, while also promoting regional solutions for more dispersed populations in order for high-quality water to be delivered at affordable rates for all customers.

How SaskWater measures the % Time Met Request for Service (RFS) Timelines measure has changed slightly from previous years. In prior years, SaskWater would track the average number of calendar days it would take to respond to different types of projects against established timeline targets for completion for each category. The measure changed in 2018–19 to aggregate the results of all categories into one number as a way to simplify the measure. SaskWater is required to meet the following individual category timelines 85 per cent of the time:

• Non-complex – 85 days

• Medium-complex – 155 days

• Highly complex – 200 days

• COM – 56 days

• ROAM – 56 days

Under this approach, if SaskWater has a low number of requests and is unable to meet even one of the targeted deadlines for a RFS, it would negatively impact the measure.

SaskWater’s goal is to continue to improve response times for each category by 30 per cent from 2014 to 2021. Timelines are initiated the day a customer submits a completed RFS and concluded when a conceptual solution is provided by SaskWater. In 2018–19, SaskWater received six requests for service, including, two Medium-complex, two COM requests, and two ROAM requests. SaskWater completed five of the six requests prior to their respective deadlines, or 83 per cent, finishing slightly below target.

SaskWater continues to drive customer service excellence. In 2018–19, SaskWater underwent a review of the organization’s internal processes related to service delivery, making noted improvements and efficiencies to the delivery process. In addition, customers have also been given additional opportunity to provide feedback on their experiences with SaskWater’s service delivery process. These activities have helped improve SaskWater’s response to customer service requests.

SaskWater did not conduct a Customer Satisfaction Survey in 2018–19, as the survey is conducted biennially. SaskWater will be conducting its next survey in 2019–20, and is targeting to achieve an 8.50 out of 10 satisfaction rating.

SaskWater continues to define itself as an organization focused on growth and customer service. In 2018–19, SaskWater implemented two new growth measures and redesigned an existing measure to better align with the organization’s growth objectives and customer service expectations. These measures uphold ambitious targets that promote targeted growth opportunities, improved timelines and responsiveness as well as strengthened customer partnerships and stakeholder relationships.

The new Committed Capital in New Growth measure promotes growth by targeting $14.2 million in new customer capital commitments in the next three years. This represents both signed capital commitments for new customers, as well as negotiated capital upgrades with existing customers. This measure replaces the % Investment

in New Growth measure. SaskWater believes the new measure provides a more accurate representation of SaskWater’s corporate growth. The Committed Capital in New Growth measure allows SaskWater to assess growth in three-year segments, which is more indicative of SaskWater’s typical timeline for its sales cycle of receiving a Request for Service to signing a service agreement with the customer. The $14.2 million represents a 12.5 per cent increase from the net book value of SaskWater’s property, plant and equipment in 2016–17, which was the most up-to-date financial statement available at the time the measure was developed. SaskWater is confident that a multi-year target will allow a clearer picture to emerge of SaskWater’s growth potential. SaskWater signed two service agreements in 2018–19, totalling $4.1 million in new capital commitments. SaskWater is on pace to meet its three-year capital growth goals.

LEGENDEXCEEDED TARGET BY 20% OR GREATER

ON TARGET

SLIGHTLY OFF TARGET BY UP TO 20%

OFF TARGET BY GREATER THAN 20%

TARGET INFORMATION NOT AVAILABLE

STRATEGIC OBJECTIVE

MEASURE3-YEAR TARGET

(2018–19 – 2021–22)*3-YEAR TARGET

(2018–19 – 2021–22)INDICATOR

LIGHT3-YEAR TARGET

(2022–23 – 2024–25)

IDENTIFY TARGETED GROWTH OPPORTUNITIES AND SERVICE OFFERINGS

1 Committed Capital in New Growth $14.2M $4.1 1 M N/A

*As of April 1, 2019

STRATEGIC OBJECTIVE

MEASURE2018–19

TARGET2018–19RESULT

INDICATORLIGHT

2019–20TARGET

2020–21TARGET

2021–22TARGET

2022–23TARGET

2023–24TARGET

IDENTIFY TARGETED GROWTH OPPORTUNITIES AND SERVICE OFFERINGS

2Net Investment Value of Qualified Projects in the Queue

$42.5M $32.4M $42.5M $42.5M $42.5M $42.5M $42.5M

IMPROVE TIMELINESS AND RESPONSIVENESS TO SERVICE REQUESTS

3 % Time Met RFS Timelines 85% 83.3% 85% 85% 85% 85% 85%

STRENGTHEN CUSTOMER PARTNERSHIPS AND STAKEHOLDER RELATIONSHIPS

4 Customer Satisfaction Survey N/A N/A 8.50 N/A 8.50 N/A 8.50

BALANCED SCORECARD

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KEY STRATEGIC OBJECTIVES• Ensure our infrastructure is

safe, reliable and efficient

• Continue to provide safe and reliable water that meets and exceeds regulatory requirements

• Identify and implement efficient and effective business and operational processes

“ We will be recognized as a leader in operations and regional systems by delivering safe and reliable water and wastewater services and providing innovative solutions to improve the efficiency, effectiveness and long-term sustainability of our business and systems.”

02PURSUING EXCELLENCE

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INFRASTRUCTURE REFRESH IN THE WORKSGrant provides significant support for water treatment plant upgrades in Melfort.Grant funding paired with renewed customer agreements has facilitated the progress of much-needed upgrades to SaskWater’s Codette Lake Water Supply System (CLWSS).

The upgrades will include the installation of a secondary clarifier and backup power at the system’s regional water treatment plant (WTP) in Melfort. The project received grant funding from the New Building Canada Plan – Provincial Territorial Component – National and Regional Projects, announced in March 2019. Federal and provincial funding will contribute two-thirds of the project’s $8.47 million in eligible costs, with SaskWater investing the remaining capital.

“These upgrades will allow us to treat the water while performing preventative maintenance tasks, or even when the power goes out,” explained Brad Dunlop, SaskWater Account Manager. “This will improve the reliability and safety of the potable water supply and reduce the number of service interruptions on the system.”

The timing of the grant was fortuitous as SaskWater renegotiated its agreements with users of the CLWSS in 2018–19. The system supplies water to approximately 9,000 users from the City of Melfort, the Melfort Rural Pipeline Association, the Village of Weldon, the Town of Kinistino, the Village of Beatty, the Town of Star City, Star City Farming and Wapiti Valley Regional Park, as well as several individual rural users. The 25-year agreement in place with the City of Melfort was set to expire in December 2018, which provided an opportunity to address some of the system’s upcoming capital needs.

“With the rates we have in place now, the system will be sustainable for years to come,” said Dunlop. “We designed the new rates to phase in over several years to reduce the impact to the end customer. We’re appreciative that the grant allowed us to provide even further relief.”

The system’s original WTP was constructed in Melfort in 1958 and its water treatment consisted of one clarifier for primary treatment and two multimedia gravity filters. A second clarifier was added in 1972.

In 1993, SaskWater purchased the system and expanded it into a regional water supply system. As a result, an addition was built onto the WTP to house a third clarifier and three gravity filters. By 2002, the old portion of the WTP was taken out of service, including the original two clarifiers, as they could no longer meet water quality regulations, leaving only the newest clarifier in use.

Chris Robart, Manager, Construction Engineering at SaskWater, explained the upgrades will allow the current clarifier to be taken offline for maintenance and cleaning, reducing the risk for water contamination. Meanwhile, backup power will reduce the likelihood of a Precautionary Drinking Water Advisory (PDWA) on the system. A PDWA is required if a power outage causes the regional pipeline to depressurize, creating the potential for contamination.

“These changes will improve the efficiency and effectiveness of the water supply infrastructure while supporting future economic development and community growth,” Robart said.

SaskWater was in the final stages of procurement on the project at year-end. It is expected that a design-build team will be selected by September 2019, with the start of construction anticipated by early 2020. The target date for completion is set for early 2021 .

These changes will improve the efficiency and effectiveness of the water supply infrastructure while supporting future economic development and community growth.

“Chris RobartManager, Construction Engineering

“

p u r s u i n g e x c e l l e n c e38 39

LARGER LAGOON FOR PIERCELANDFederal/provincial grant combined with SaskWater investment.September 2018 brought good news for the Village of Pierceland in the form of a much-anticipated grant announcement.

“ It was very exciting because we weren’t sure, if we didn’t get that grant, how we were going to afford this,” said Pierceland Mayor Jim Krushelnitzky.

The grant assures that the upgrades and expansion of Pierceland’s wastewater lagoon will proceed. The lagoon, originally constructed by the village, is now owned and operated by SaskWater. The six-to-eight-month expansion project is slated for the spring of 2020. The joint federal/provincial grant program, known as the New Building Canada Plan’s Small Communities Fund, will fund up to $2.1 million of the $3.15 million in eligible costs for the project, with SaskWater investing the remainder of the cost.

“We purchased the lagoon from the community and in recent years have been working with them to resolve some of the challenges that come with an aging wastewater system,” said Chad Braun, SaskWater Account Manager for the community of Pierceland. “We’ve engineered a solution and the assistance from the grant program is making it a viable project.”

Braun noted that SaskWater has recently renewed its agreement to provide potable water to the Village of Pierceland and updated the terms of its wastewater agreement to ensure the long-term sustainability of both systems.

The new engineered lagoon, designed with local soil conditions in mind, will include a clay liner,

or membrane liner, to ensure that the lagoon is sound and the village is in compliance with all requirements set by the Water Security Agency.

The lagoon expansion will include a new primary storage cell alongside an existing one at the village lagoon site. Once constructed, the original primary cell will be drained into the new one. This approach should prevent any major disruption of wastewater services to the village residents.

The berm between the original primary and secondary cells will be removed to create a larger secondary cell and repairs to the secondary cell lining will also be undertaken along with the installation of a new discharge pipe and any necessary works to facilitate the annual discharge of treated effluent from the lagoon.

Krushelnitzky says the upcoming lagoon expansion brings opportunity for his community and the fact that SaskWater will be involved makes the process far easier for local officials. For example, tendering is something he’s grateful not to handle, as he believes it allows local contractors to bid on the work through a completely objective process.

Ultimately the Mayor says, the village is aware that its current lagoon capacity is a barrier to progress. The Water Security Agency has indicated a planned subdivision can’t go ahead without the expansion.

“If we get the expansion and the upgrades done, then for future growth, we’re ready,” he said. “ It had to be upgraded.”

IT DIRECTION CLEARLY MAPPEDNew ERP software meets all key requirements.2018–19 was a year focused on refining internal processes and identifying technology tools to enable the unmatched service and superior customer experience SaskWater strives to achieve.

“SaskWater is committed to providing our employees with the resources they need to support our customers and grow our business,” explained Jacquie Gibney, Vice President, Corporate and Customer Service at SaskWater. “Innovative approaches to our processes, the technology we use and the services we provide enhance our interactions with one another, and most importantly, with customers.”

SaskWater’s Enterprise Resource Planning (ERP) project is an extension of an earlier business process-mapping initiative that sought to find efficiencies in the workflow throughout the corporation. The ERP project will now apply a software solution to the processes that were mapped, creating integration across all departments.

The ERP project team, headed by the Information Technology (IT) department, was charged with the complex task of identifying a software solution that would integrate day-to-day business activities and automate behind-the-scenes office functions related to technology, services and human resources. Following in-depth research, which included several product demonstrations and discussions with vendors and customers, Oracle Fusion Cloud was selected in 2018–19 as SaskWater’s ERP standard.

“In order to move forward with new business opportunities, we need to evolve,” explained

Paul Mayson, Manager, IT Services at SaskWater. “The new ERP software will allow us to do things that our current system is just not capable of doing. It meets all of SaskWater’s key requirements in one single solution.”

The new software will include modules that address everything from finances, to customer relationship management, human resources management, enterprise asset management, project management, and time and attendance tracking.

Mayson said the new ERP solution will provide mobile applications for tasks like timesheets, expense claims and approval functions that have typically been tied to employee desktop computers – an asset to SaskWater’s field staff and other employees who are increasingly dependent on mobile devices.

The software will also provide executive and management with a more real-time view of the corporation’s overall financial picture for financial reporting and forecasting.

Mayson noted the software selection was the culmination of a year’s worth of research, and now with an implementer chosen to introduce the software, some of the major project milestones have been achieved.

“ It ’s like all of the blocks are falling into place,” Mayson said.

He predicted the new software solution should be up and running within the year.

p u r s u i n g e x c e l l e n c e40 41

Dark Tuesday - what we learned about business continuity, mass notification and emergency response planning. What began as a regular workday in December 2018 became a real-time test of new safety technology and a trial run for the Business Continuity Plan (BCP) SaskWater had been working to refine in 2018–19.

SaskWater introduced a mobile-friendly safety software in 2018–19, called Everbridge. Among other things, it provides field staff with a tool that assures they can get assistance if an emergency arises while working alone. It provides alerts for missed check-ins

as well as emergency location services in case an employee cannot be contacted.

Tuesday, December 4, 2018, was the day Paul Mayson, IT Services Manager at SaskWater, had scheduled his first full trial of the software’s mass notification function. It was also the day SaskPower experienced its biggest power outage since 1981, affecting roughly 200,000 Saskatchewan customers.

Mayson was on a conference call , around 9 a.m., when the lights went out at SaskWater’s head office in Moose Jaw.

“ It really didn’t click how big this was until we started walking around the office,” Mayson said. “People were chatting about the online updates and it became evident the outage was affecting a vast geographical area. Concerns were being raised about the SaskWater locations that may be impacted.”

A core group of people quickly gathered, including SaskWater’s Occupational Health and Safety Manager, Miles Yeroschak. They completed an analysis of the current situation, including the status of SaskWater’s water treatment plants. Provincial emergency management officials were consulted and SaskWater invoked its Business Continuity Plan.

“It became obvious there was no short-term fix,” Mayson explained. “Employees needed to be notified of the situation so a decision was made to use the mass notification system and see how it worked.”

The initial message was sent informing all employees of the situation and that a team of SaskWater staff was assessing the situation. That initial message reached approximately 130 people in a span of five minutes. Over the course of the incident additional messages were sent, including messages to groups of staff with instructions specifically for them.

“It saved a lot of time. The days of a calling tree should be gone,” said Mayson, noting that even group text messages can be problematic in terms of tracking who has received them. Everbridge’s mass notification system runs down a list of contacts for each employee, until they acknowledge the message with a simple prompt.

“We can then run reports of who wasn’t notified and why, so we can identify those gaps and make sure everyone gets the same message.”

In this instance 80 per cent of people acknowledged the alert within 10 minutes of receiving the notification. Though he would have liked to run the scheduled test, Mayson said he was thankful the technology was available during the incident, which was resolved by late afternoon in most locations, without having any significant impact on water supplies.

“We learned the few pains of the system are minor compared to the benefits we get from it,” Mayson said.

Yeroschak said the mass notification system is one of the tools that plays into SaskWater’s BCP, which was being reviewed throughout the year. The BCP outlines a framework to evaluate an unforeseen situation that could interrupt SaskWater services, build the necessary team to address it , develop a plan, and execute it . Mock exercises have been run to ensure the plan is effective, and the power outage offered another opportunity to assess it .

“ It definitely helps that people are becoming more aware of business continuity and having a process to follow,” Yeroschak said. “The mass notification tool keeps people informed, updates them and provides essential information about what’s going on and what we’re doing about it . This situation gave me confidence that we can get the right message out at the right time.”

Yeroschak said the notification system will also be a useful tool to incorporate into SaskWater’s individual Facility Emergency Response Plans, which are slated to be updated in 2019–20.

CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY INITIATIVESCorporate social responsibility and sustainability initiatives that fall under SaskWater’s goal of Pursuing Excellence to deliver safe, efficient and sustainable services include:

• promoting the value of water through contests within our customer communities’ schools and providing water conservation information to customers and events

• facilitating school tours of our water treatment plants

• preparing handbills to encourage customer communities to request SaskWater’s Save a drop. Save a lot. brochures for their residents

• promoting www.saskwater.com as a resource for water conservation materials

• setting an emissions intensity target to reduce Greenhouse Gas (GHG) emissions by 20 per cent in 2020 from 2006 levels. As of 2017, SaskWater has achieved a 22 per cent reduction with 507 tonnes of GHG emissions per 1 million cubic metres of water pumped or treated. This target will be revisited to reflect GHG targets identified in the Paris Agreement. SaskWater’s Greenhouse Gas Committee meets regularly to review potential initiatives to reduce GHG emissions. The committee has implemented initiatives, including:

– installation of solar panels at the Wakaw water treatment plant to increase the use of renewable energy and lower GHG emissions

– changing inefficient lighting to more efficient LED lighting

– implementing a pump optimization program to lower power consumption by reducing average operating pressures in water supply lines

– reducing employee travel by implementing remote access to facilities for diagnostic and troubleshooting purposes

• taking an active approach to minimizing water loss on water supply systems. The target is a water loss rate of three per cent or less. SaskWater is undertaking a targeted asset renewal and replacement program for its systems that are aging and experiencing high water loss. (See the System Reliability Index measure in the Balanced Scorecard on page 42.)

• participating in corporate recycling of paper, plastics, electronics and batteries

We learned the few pains of the system are minor compared to

the benefits we get from it.““Paul Mayson

IT Services Manager

p u r s u i n g e x c e l l e n c e42 43

2018-19 Target

2018-19 Result

WATER QUALITY INDEX FACTOR

RESULTS

Bacteriological Analysis

Chlorine

Trih

alom

etha

nes

Turb

idity

0.470

0.230

0.0

70

0.230

0.470

0.230

0.0

69

0.2

292018-19 Target

2018-19 Result

WATER QUALITY INDEX FACTOR

RESULTS

Bacteriological Analysis

Chlorine

Trih

alom

etha

nes

Turb

idity

0.470

0.230

0.0

70

0.230

0.470 0.230

0.0

69

0.2

29

SaskWater is committed to properly maintaining and investing in its existing assets. The Asset Renewal and Replacement target is to invest between 2-4 per cent of the book value of assets each year. SaskWater was within this target range in 2018-19, with total asset investment shifting below budget. This was the result of some projects being delayed to maintain eligibility for grant financing, while others were delayed to coordinate with timelines of other stakeholders.

SaskWater’s sustained investment in its asset renewal has begun to yield benefits for the corporation, which has influenced the outcome of the System Reliability Index. SaskWater’s Asset Management Program has contributed to a reduction in unplanned service interruptions and other water loss incidents. The Asset Management Program establishes preventative maintenance schedules on all applicable infrastructure, reducing the risk of future malfunctions.

The corporation ensures customers receive high-quality, safe drinking water that meets and exceeds regulatory standards. The Water Quality Index measure identifies four critical factors that determine whether SaskWater is achieving high-quality water throughout SaskWater’s potable water systems. The factors include chlorine, turbidity, bacteriological analysis, and trihalomethanes (THMs). For the target calculation, each factor is given a weighted percentage based on risk and impact associated with its potential presence in the water source. The Water Quality Index was on target for 2018–19, with all SaskWater systems meeting each of the Water Quality Index factors. Full details regarding 2018 water quality results can be found in SaskWater’s Annual Water Quality Report located at https://www.saskwater.com/quadrant/media/Water_Quality_report_2018-FINAL.pdf.

As a provincial Crown corporation, SaskWater is committed to operating efficiently and continuously seeks opportunities to reduce costs and improve productivity. The Corporate Operating Ratio quantifies this relationship by considering total operating and overhead costs in relationship to overall revenue. SaskWater was successful in meeting its 2018–19 target.

Similar to the Corporate Operating Ratio, the Corporate Productivity per Full-Time Equivalent (FTE) measure tracks employee productivity by using a ratio of earned revenue to the number of FTEs in the organization. An FTE is all paid hours worked, including overtime hours. The 2018–19 result for this measure is above target.

Both the Corporate Operating Ratio and Corporate Productivity per FTE measure are driven by continual improvements to corporate efficiency. Since 2015–16, SaskWater has maintained an efficiency program that tracks and quantifies corporate efficiencies. This includes Crown collaboration with the purpose of identifying efficiencies and cost savings amongst the Crowns by pursing joint initiatives. In addition, SaskWater’s Greenhouse Gas Committee targets organizational changes that promote not only greenhouse gas reduction, but also operational efficiencies. With the implementation of both the Efficiency Program and Greenhouse Gas Committee, SaskWater has experienced a noted reduction in overall corporate expense.

Providing safe and reliable water and wastewater services efficiently and effectively is fundamental to SaskWater. SaskWater’s Pursuing Excellence goal sets out expectations that all SaskWater customers receive high-quality, safe drinking water, delivered in an efficient and economically sustainable manner. SaskWater has established three main strategic objectives related to this measure. SaskWater will ensure safe, reliable and efficient infrastructure; safe and reliable water that meets and exceeds regulatory requirements; and will implement efficient and effective business and operational processes. Five measures have been identified and aligned accordingly.

The System Reliability Index tracks the reliability and efficiency of SaskWater’s systems and services. This measure’s success is based upon four main features: unplanned service interruptions, length of interruptions, compliance with interruption procedures, and water loss. Each individual factor is given a score out of one, with one being a perfect score. The 2018–19 result for the System Reliability Index is on target, meeting three of the four factors in the index. SaskWater’s

target for service interruptions is to have service restored within 24 hours. There were 24 service interruptions in 2018-19. The average period of interruption was eight hours; however, in three cases, the repair work surpassed the 24-hour timeframe. The longest service interruption was resolved in 34.5 hours.

Systems Reliability Index Factor Results2018-2019

Factor Target2018-2019

Results

Unplanned Service Interruption Factor (USIF)

30 16

Length of Interruption Factor (LIF) 93.75% 88%

Planned Service Interruption Factor (PSIF) 95% 100%

Water Loss Factor (WLF) 3% 1.77%

BALANCED SCORECARD

STRATEGIC OBJECTIVE

MEASURE2018–19TARGET

2018–19RESULT

INDICATORLIGHT

2019–20TARGET

2020–21TARGET

2021–22TARGET

2022–23TARGET

2023–24TARGET

ENSURE OUR INFRASTRUCTURE IS SAFE, RELIABLE AND EFFICIENT

5 System Reliability Index 19.69 19.67 19.69 19.69 19.69 19.69 19.69

6 Asset Renewal and Replacement 3.9% 3.2% 3.6% 4.0% 2.3% 2.9% 3.1%

CONTINUE TO PROVIDE SAFE AND RELIABLE WATER THAT MEETS AND EXCEEDS REGULATORY REQUIREMENTS

7 Water Quality Index 0.986 0.998 0.987 0.988 0.989 0.990 0.991

IDENTIFY AND IMPLEMENT EFFICIENT AND EFFECTIVE BUSINESS AND OPERATIONAL PROCESSES

8 Corporate Operating Ratio 0.52 0.49 0.71 0.68 0.65 0.63 0.63

9 Corporate Productivity per FTE ($000) $423 $442 $448 $469 $475 $459 $472

LEGENDEXCEEDED TARGET BY 20% OR GREATER

ON TARGET

SLIGHTLY OFF TARGET BY UP TO 20%

OFF TARGET BY GREATER THAN 20%

TARGET INFORMATION NOT AVAILABLE

v a l u i n g e m p l o y e e s44 45

KEY STRATEGIC OBJECTIVES• Create a challenging and

rewarding workplace

• Recruit and retain qualified people

• Provide a workplace that promotes safety and employee health and well-being

“ We provide employees with opportunities and challenges in an environment that is safe, inclusive, respectful and supportive to maximize their potential.”

VALUING EMPLOYEES03

v a l u i n g e m p l o y e e s46 47

DEFINING OUR BRANDSaskWater embarks on marketing strategy and brand positioning project.At the heart of SaskWater’s brand are its people, so it seemed only fitting to include as many employees as possible in the corporation’s Marketing Strategy and Brand Positioning Project in order to reach the milestones achieved in 2018–19 for the multi-year project.

The intent of the brand project is to build off of SaskWater’s existing brand assets and create a more deliberate and focused corporate brand, both internally and externally. The first phase of the project was to define SaskWater’s Brand Guideposts. These statements act as the foundation for the brand moving forward, and each and every SaskWater employee had the opportunity to inform this phase of the project through either workshops, interviews or a survey.

“We are excited about the work we’ve done up to this point, and for the work to come,” said project lead Courtney Mihalicz, Manager of Corporate Communications at SaskWater. “We’re particularly proud of the approach we took to make sure each and every employee and Board member feels they’ve been a part of the project and can be proud of what we are creating.”

Other work in 2018–19 included creating the visual representation of the brand and exploring the customer experience to identify opportunities for improvement. These phases included internal Brand Committee and Board of Directors’ presentations, a presentation at SaskWater’s staff conference and another workshop involving several employees representing all areas of the corporation.

“The brand project work has been very valuable both in terms of developing and identifying touchpoints and opportunities when we’re considering our external brand and interactions with customers,” said Randy Avery, Director of Customer Growth and Engagement at SaskWater, “but also internally, as all areas of the corporation are realizing the important role they play in developing our brand.”

As the project nears completion in 2019–20, employees will continue to be actively involved in communications planning, workshops to explore brand behaviours, actions and expectations as well as the launch and implementation of SaskWater’s refreshed brand.

The brand project work has been very valuable both in terms of developing and identifying touchpoints and opportunities when we’re considering our external brand and interactions with customers.

“Randy AveryDirector of Customer Growth and Engagement

“

49v a l u i n g e m p l o y e e s48

SAFETY COMES FIRSTSaskWater makes staff safety a top priority.SaskWater’s commitment to safety is evident through the continuous evolution of its safety programs.

In 2018–19, three initiatives came into full force, which have a direct link to the well-being of employees – SaskWater’s Fit for Duty program, new guidelines for personal protective equipment (PPE) and a mobile application to be used by employees working alone and for mass notification.

SaskWater’s Fit for Duty program was an initiative intended to update and formalize existing company policy around potential drug-and-alcohol-related workplace incidents. With the legalization of marijuana coming into effect, it was imperative that SaskWater’s policy be current and reflect industry best practice.

“SaskWater recognizes that employees who use, or are impaired by, drugs or alcohol while performing work endanger not only themselves but their co-workers and others affected by the work,” explained SaskWater’s Occupational Health and Safety Manager Miles Yeroschak. “The policy provides our employees with peace of mind and understanding that we’re creating an environment free of drugs and alcohol. We want to keep our people safe and send them home to their loved ones every day.”

The policy took effect on August 1, 2018, and applies to all employees, though the alcohol and drug-testing portion only affects employees who work in what have been deemed safety-sensitive positions. The new policy allows for pre-screening of new employees who will work in these safety-sensitive positions. It also helps SaskWater adhere to industry standards that are required by several of its industrial partners. Yeroschak stressed that random drug and/or alcohol testing is not included within the policy, which sets very clear parameters for screening. Any request for screening would require justification.

“We’re equipping our supervisors to recognize signs of impairment to prevent potential hazards,” Yeroschak added.

SaskWater’s updated PPE policy is another proactive initiative to protect employees. The policy aims to standardize how PPE is used. It spells out which employees are required to use it, and in what circumstances. While performing work tasks outside of an office setting, control room or vehicle, all employees and contractors of SaskWater will be expected to wear a minimum level of PPE, as well as additional equipment that may be deemed appropriate to the task.

“ It ’s an investment in our people,” explained Yeroschak, noting that

not only does the equipment provide an important last line of physical defense for employees on a work site, it also sets a standard for SaskWater contractors, builds public trust and enhances the SaskWater brand. “We’re putting them in a safer position, but it also brings an element of professionalism and an identity for our staff in the field. This is what a SaskWater employee looks like, and it’s a very specific standard.”

SaskWater has also simplified the task of equipping staff with PPE through the implementation of a web portal for the purchase of required items like coveralls, work bibs, jackets or designated shirt and pant combinations. Hard hats, steel-toed footwear and protective eyewear, including prescription glasses, are also provided as necessary.

Along with the proper gear, SaskWater is providing employees with a cell phone application called Everbridge, which allows them to maintain essential contact with supervisors, particularly while they are working alone.

When employees are working on any task in an isolated setting, they will be prompted to check in with Everbridge hourly to notify supervisors that all is well . This is accomplished simply with a tap of a button on the phone screen.

“If you miss a check-in or require assistance, your supervisor gets a message,” explained Yeroschak. If the supervisor is unable to contact an employee within 15 minutes of a missed check-in, the situation is escalated and measures are taken to locate the employee. Everbridge helps through a feature that employees activate to record their location every time their position changes by 500 metres.

“This is only to be used in an urgent situation when we need to locate an employee, Yeroschak noted. “Our employees cover considerable distances, often alone. Whether it’s to attend a meeting, move between office locations or access remote work sites, this extensive travel is just one of the motivating factors for using Everbridge.”

Everbridge also incorporates a mass notification function that can efficiently send messages to all SaskWater staff, or specifically affected groups, in urgent or emergent circumstances.

We’re equipping our supervisors to recognize signs of impairment

to prevent potential hazards.““Miles YeroschakOccupational Health and Safety Manager

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ALL ABOUT BIKE BUILDINGBicycles become vehicle for teamwork and generosity.SaskWater took an approach to team building in 2018–19 that represented an investment not only in its staff, but also in a deserving Regina community group.

On March 14, 2019, roughly 100 of SaskWater’s employees had the pleasure of participating in a workshop presented by Dan Perdue’s company, LEVEL 12. Perdue’s program is designed to challenge participants – physically, mentally and emotionally – to think resourcefully and achieve new levels of success.

He accomplishes this by having each group of employees assemble a bicycle in 45 minutes, using only the basic tools provided. Unbeknownst to the participants, the assembled bicycles are later donated to a local non-profit group.

The pretense of the exercise is that each small group is operating its own bicycle factory, and that they must create a visual identity and commercial pitch to present along with the assembled bicycle. Despite their overall inexperience and unexpected setbacks, such as missing tools, the teams are encouraged to focus on delivering an exceptional customer experience.

“I ’ll never forget the look on everyone’s faces while they were building and advertising the bicycles,” said SaskWater Senior Technologist Brendan Miller, with a chuckle.

The fun and chaos of running a fictitious bicycle company, challenged with tight deadlines and production issues, forced the diverse teams to be resourceful, rely on each other’s strengths and push beyond their comfort zones.

“There’s so much value in bringing co-workers together in an environment that creates new connections and makes them appreciate each other’s skills and talents,” said Sarah Francis, SaskWater Human Resources Consultant. “This session offered all of that, with the added reward of a community outreach component.”

While the professional rewards were clear, the activity had an obvious emotional impact when it was revealed that the bicycles produced from the exercise would be donated to youth involved with the YWCA Big Sisters of Regina.

The news of the donation brought smiles to the crowd, but when several young people from the mentoring program were brought in to accept their bicycles, a few tears were interspersed with the smiles.

“ I was very pleased the bikes were going to children,” said Dale Heshka, SaskWater Manager of District Operations in Melville. “The smiles on their faces were even more precious than anything we gained working together building them!”

Miller agreed that the highlight of the exercise was turning the bicycles over to the kids.

“That touched a lot of people,” he said. “Things like this reminds me why I am so proud to be part of the SaskWater team.”

During the workshop, SaskWater staff assembled 17 bicycles, which were inspected by a qualified technician and delivered to the YWCA Big Sisters of Regina, along with 17 helmets.

v a l u i n g e m p l o y e e s52 53

INNOVATIVE TECHNIQUES REALLY DELIVERSaskWater’s Zelma East Project recognized for engineering excellence.SaskWater’s Zelma East project beat out some tough competition to take top honours at the Brian Eckel Awards in November 2018.

The Saskatchewan Association of Consulting Engineering Companies (ACEC) holds the annual awards to recognize engineering excellence.

Sumith Kahanda, SaskWater Project Manager, Construction Engineering, was extensively involved in the Zelma East project and attended the awards on SaskWater’s behalf.

“ It is nice to see this project recognized by the community and the industry,” said Kahanda. “Our success is due to our teamwork. Everyone worked hard to provide a quality product and complete the project within budget.”

The Pinnacle Award, the ACEC’s top distinction, recognized the consulting work of AECOM Canada Ltd. on the SaskWater project.

The project was an expansion to the Saskatoon Southeast Water Supply System and delivers non-potable water from the Zelma Reservoir to the proposed BHP Billiton (BHPB) potash mine near Jansen.

The project was also awarded the ACEC’s Award of Distinction for Municipal Infrastructure and Water Resources.

A video clip prepared for the awards ceremony highlighted the project’s winning attributes and stated, “the team used innovative techniques to deliver the project,” and went on to mention examples such as hydraulic modelling, failure modes and effects analysis workshops, as well as alternate construction procurement methods.

“This project is being recognized for demonstrating a high level of expertise and analysis, combined with extensive project management activities,” the video continued. “ It provides a secure water supply for hundreds of residents and large, critical industries.”

The completed water delivery system includes two water intakes and a pump station at the Zelma Reservoir, 57.4 kilometres of 750-millimetre diameter PVC transmission pipeline, a booster station, 35.4 kilometres of 600-millimetre diameter PVC transmission pipeline and the BHPB meter station located at the mine site.

“Thanks to everyone for their support and contribution to this project,” Kahanda added. “ It was a great experience.”

SASKWATER’S PEOPLE

EMPLOYEESAt SaskWater, employees are the corporation’s most important asset and provide a valuable connection to our customers, industry contacts and the general public.

SaskWater has approximately 130 employees working out of headquarters in Moose Jaw and offices in Regina, Saskatoon and Prince Albert, as well as the locations identified on the systems map on page 5.

SaskWater operates in a unionized environment; 82 of our permanent employees are members of the UNIFOR Union, Local 820.

DIVERSITYAt SaskWater, we understand the importance of a diverse workforce to support our operations and help us continue to be an innovative and forward-looking corporation.

SaskWater supports a representative workforce. Strategies include attraction, retention, training and promotion of those who fall into the Saskatchewan Human Rights Commission representative categories: women in under-represented positions, visible minorities, Indigenous people and persons with disabilities.

In 2018–19, members of these designated equity groups represented 28 per cent of SaskWater’s workforce, which is a slight increase over recent years. To further support diversity, we continue to deliver an Indigenous Cultural Awareness Program to SaskWater employees. This year, seven of our employees attended this program, bringing the percentage of staff who have taken this training to 94 per cent.

As part of their core training, SaskWater employees attend Crucial Conversations, a two-day interactive communication skills development workshop, aimed at contributing to a respectful working environment. Since this became part of the core training in 2016–17, 58 employees (45 per cent) have attended, with an additional 15 employees already scheduled to attend in 2019–20.

TRAININGSaskWater encourages and supports training in the areas of ongoing education, professional development and occupational health and safety for employees. Training is offered to upgrade employee knowledge and skills. This increases organizational effectiveness by raising overall employee performance and engagement. In 2018–19, 97 employees took part in training initiatives.

EDUCATIONIn the water and wastewater industry, education is important. Investing in post-secondary education is investing in SaskWater’s future employees and the future workforce of Saskatchewan.

SaskWater’s co-op terms show our commitment to recruiting promising young talent in Saskatchewan. SaskWater provided two eight-month co-op placements in 2018–19 at its Wakaw and Melfort locations.

Our success is due to our teamwork. Everyone worked hard to provide a quality product and complete the

project within budget.“

“Sumith Kahanda

SaskWater Project Manager, Construction Engineering

v a l u i n g e m p l o y e e s54 55

CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY INITIATIVESCorporate social responsibility and sustainability initiatives under SaskWater’s goal of Valuing Employees include developing a positive, engaged and representative workforce through:

• support for a representative workforce through core training opportunities, including Crucial Conversations and Indigenous Cultural Awareness

• corporate and employee support for events and charity fundraisers such as the Terry Fox Run, Day of Pink, Plaid for Dad, the Riverside Mission’s Christmas fundraising campaign, and a silver collection for the Prince Arthur Community School Santa Store

• participation in the Good Food Box program that is designed to promote healthy eating and support Hunger in Moose Jaw

• support for employees who volunteer for philanthropic activities such as the Moose Jaw Health Foundation Radiothon, Sundae with Santa and the City of Moose Jaw’s Downtown Business Clean Up Day

v a l u i n g e m p l o y e e s56 57

SaskWater supports the growth and well-being of its employees. The Valuing Employees goal focuses on two main strategic objectives: creating a challenging and rewarding workplace and creating a workplace that promotes safety and employee health and well-being. SaskWater maintains four measures to gauge its success in this area.

The Employee Engagement Survey is conducted biennially to track the effectiveness of employee engagement management strategies. SaskWater scored well on the 2018–19 survey, being slightly above the target. The survey results suggested that SaskWater’s strengths include Work Environment, Immediate Management and Company Culture. Areas as opportunities for improvement include Information and Communication, Organizational Vision and Teamwork. The next Employee Engagement Survey is scheduled for 2020–21 .

The Retention Rate measure tracks resignations/terminations and monitors trends that help inform workforce planning. Targets for this measure were set using benchmarks and historical data, and the targets for this measure are considered to be at the higher end of the benchmark range. SaskWater

met the 2018–19 target with a 92 per cent Retention Rate. SaskWater intends to maintain a 92 per cent target over the next five years.

SaskWater measures two types of Injury Rate measures: Total Recordable Injury Rate (TRIR) and Lost Time Injury Severity Rate (LTIS). Each measure’s ultimate goal is to reduce workplace injuries to zero, with future targets slowly approaching that goal. TRIR is calculated at the point in which an occupational injury requires medical treatment beyond standard first aid. LTIS calculates the number of days employees miss work as a result of injury. A recordable injury that occurred in 2017–18 negatively affected the LTIS for 2018–19, pushing the LTIS slightly above target. SaskWater did not have a recordable injury in 2018–19.

SaskWater’s Safety Program continued to be refined in 2018–19. New policies and programs implemented during the year included the Personal Protective Equipment (PPE) program and the Fit for Duty program. SaskWater also made significant improvements to its Emergency Response Plan, Chemical Safety, Return to Work and Contractor Safety Management programs, which are scheduled for release in 2019–20.

BALANCED SCORECARD

STRATEGIC OBJECTIVE

MEASURE2018–19TARGET

2018–19RESULT

INDICATORLIGHT

2019–20TARGET

2020–21TARGET

2021–22TARGET

2022–23TARGET

2023–24TARGET

CREATE A CHALLENGING AND REWARDING WORKPLACE 10 Employee

Engagement Survey 74% 75% N/A 75% N/A 76% N/A

RECRUIT AND RETAIN QUALIFIED PEOPLE 11 Retention Rate 92% 92% 92% 92% 92% 92% 92%

PROVIDE A WORKPLACE THAT PROMOTES SAFETY AND EMPLOYEE HEALTH AND WELL-BEING

12 Total Recordable Injury Rate (TRIR) 3.18 0 3.13 3.08 2.02 1.99 1.99

13 Lost Time Injury Severity Rate (LTIS) 15.88 18.62 15.63 12.31 9.09 4.98 4.98

LEGENDEXCEEDED TARGET BY 20% OR GREATER

ON TARGET

SLIGHTLY OFF TARGET BY UP TO 20%

OFF TARGET BY GREATER THAN 20%

TARGET INFORMATION NOT AVAILABLE

s u c c e e d i n g f i n a n c i a l l y58 59

KEY STRATEGIC OBJECTIVES• Achieve return on equity

targets approved by shareholder

• Operate within debt ratio approved by shareholder

“ We are committed to sustainable financial growth that provides value to our shareholder, while offering competitive rates and supporting provincial growth through strategic investments and partnerships.”04SUCCEEDING

FINANCIALLY

s u c c e e d i n g f i n a n c i a l l y60 61

2018-19 FINANCIAL RESULTSSaskWater generated earnings of $7.9 million in 2018–19, (2017–18: $8.2 million).

Water sales and services revenue increased by 3.2 per cent to $45.8 million, up from $44.8 million in the previous year. Potable water sales rose in part due to another hot summer and in part due to customer community growth around major cities. Non-potable water sales improved largely as a result of five of the seven operating potash mines served by SaskWater increasing their consumption to meet market conditions.

Services revenue grew by approximately $600,000 to $4.7 million. Services includes certified operation and maintenance (COM) where SaskWater provides the personnel to operate facilities owned by the customer, project management services to support feasibility studies and pre-construction engineering for potential new ventures, northern engineering services for water and wastewater

projects in northern Saskatchewan in conjunction with the Ministry of Government Relations, operator training to a number of First Nations communities through a contract for services with Indigenous Services Canada, and ancillary services including leak detection and remote monitoring of water supply systems. The major changes to this revenue category includes growth in the number of COM customers, more work on behalf of northern communities due to their ability to secure grant funding, somewhat offset by a reduction in project management, which has largely been on behalf of potential entrants in the potash sector wrestling with ongoing low commodity prices.

Other revenues experienced a decrease of $1 .1 million, returning to normal levels. 2017–18 saw a one-time revenue boost as SaskWater was able to renegotiate its customer contracts on a former legacy system to improve the financial

2017-18 Result

EARNINGS(MILLIONS)

$8.

2

$7.

9

2018-19 Result

2017-18 Result

EARNINGS(MILLIONS)

$8.

2

$7.

9

2018-19 Result

REVENUESOURCES

Water Sales and Treatment

Other

Serv

ices

$45.8

$6.8

$4.

7

REVENUESOURCES

Water Sales and Treatment

Other

Serv

ices

$44.8

$8.0

$4.

1

2017-18 Result

EARNINGS(MILLIONS)

$8.

2

$7.

9

2018-19 Result TOTAL REVENUE$57.3

$56.9

TOTAL OPERATING EXPENSES$47.8

$46.7

sustainability of the system, thereby allowing a reversal of $0.9 million in onerous contracts and asset impairment charges during the prior year.

Total revenue from all sources increased by $0.4 million or 0.8 per cent to $57.3 million for the current year, up from $56.9 million in 2017–18.

Total operating expenses increased by $1 .1 million or 2.4 per cent to $47.8 million for the year, up from $46.7 million in 2017–18.

Salaries and benefits increased during the year by $0.2 million or 1 .7 per cent as compared to 2017–18. The increase is primarily reflecting the full year of new staff brought on to support the additional COM contracts.

Operations Maintenance and Administration (OM&A) expense for the year increased by $0.1 million or 1 .0 per cent as compared to 2017–18. In line with the increased COM revenues from new

customers, SaskWater had additional related operating expenses of $0.1 million that account for the increase. All other operating expenses remained unchanged in aggregate.

Depreciation of property, plant and equipment rose $0.3 million over 2017–18, primarily as a result of infrastructure being replaced during the year. During 2018–19, SaskWater put into service $0.5 million worth of new customer and growth-related infrastructure, $12.2 million worth of replacement and upgrade-related infrastructure and $0.4 million worth of equipment into service during the year.

Bulk water purchases are amounts paid to buy potable water from other treatment plants and then distribute it to SaskWater customers, in lieu of SaskWater building its own water treatment plant.

s u c c e e d i n g f i n a n c i a l l y62 63

Key Financial Data

( $ millions ) Year ended March 31, 2019

Year ended March 31, 2018

Total Assets $359.7 $351.9

Return on Equity 10.7% 12.5%

Debt Ratio 46.1% 46.6%

Dividends Declared $3.745 $2.019

LIQUIDITY AND CAPITAL RESOURCESSaskWater secures capital investment dollars through a combination of internally generated cash from operations and from debt arranged through the Government of Saskatchewan, Ministry of Finance. The maximum short-term borrowing and maximum total borrowing are established by order-in-council as follows:

Financing ( $ millions) Authorized Outstanding at March 31, 2019

Short Term ( promissory notes)

$30.0 $ –

Total ( including short term) $130.0 $76.4

OPERATINGEXPENSES

OM&A

Amor

tizat

ion

Saskatchewan Taxes $0.8

$10.4

$12

.3

$13.5

$10

.9Bu

lk W

ate

r

Salaries & Benefits

OPERATINGEXPENSES

OM&A

Amor

tizat

ion

Saskatchewan Taxes $0.7

$10.3

$12

.0

$13.3

$9.

0Bu

lk W

ate

r

Salaries & Benefits

2017-18 Result

EARNINGS(MILLIONS)

$8.

2

$7.

9

2018-19 Result

TOTAL REVENUE$57.3

$56.9

TOTAL OPERATING EXPENSES$47.8

$46.7

This is largely paid to the City of Saskatoon, with some purchases also from the Buffalo Pound Water Administration Board, the City of Regina and the City of Moose Jaw. Bulk water purchases during the year were $0.5 million or 5.0 per cent higher than 2017–18, as a result of the hot summer, continued customer community growth and rate increases applied by treatment plant owners in those areas.

CAPITAL INVESTMENTDuring the year, $24.4 million was spent on capital projects, including new construction and expansion, existing infrastructure refurbishment and asset management programs. SaskWater invested $23.7 million from its own source funds and the remainder was received from customers as contributions in aid of capital. Major projects initiated in the current or prior years include:

• Construction of the new Melville Water Treatment Plant and its non-potable supply wells and pipeline. The pipeline was substantially complete last year and construction shifted to the water treatment plant. The superstructure of the water treatment plant is now complete and the interior equipment is being worked on. Progress on the water treatment plant totalled $14.2 million.

• Replacement of 9.1 kilometres of pipeline on the Saskatoon East Potable Water Supply System at a cost of $4.8 million. The original steel pipeline is 60 years old and SaskWater is refurbishing the infrastructure in stages.

• Refurbished over $1 .5 million in assets on the Saskatoon Southeast Water Supply (SSEWS) canal system. The work included improved flow monitoring, bridge inspections and repairs, the replacement of several inline culverts as well as several cross drains that allow natural drainage to cross the canal.

s u c c e e d i n g f i n a n c i a l l y64 65

NEW ACCOUNTING STANDARDS IN THE CURRENT YEARSaskWater adopted the following new and amended standards and interpretations effective April 1 , 2018:

IFRS 15 Revenue from Contracts with Customers Effective April 1 , 2018, the corporation has adopted IFRS 15, Revenue from Contracts with Customers, which replaced IAS 11 , Construction Contracts and IAS 18, Revenue and related interpretations, using the modified retrospective approach whereby the cumulative effect of any adjustments are recognized in the opening balance of retained earnings as of April 1 , 2018. The comparative information has not been restated and continues to be reported under previous accounting standards. The requirements of IFRS 15 had no impact on the corporation and therefore no adjustments to the opening balance of retained earnings or to the presentation of the statements of financial position were required. Although no changes were made to existing accounting policies, additional disclosure has been provided in Notes 3(a), 3(b) and 3(i) of the 2018–19 financial statements.

In adopting IFRS 15, the corporation elected to apply the following practical expedients:

• the corporation will apply the standard retrospectively only to contracts that are not completed contracts at the date of initial application

• the corporation will recognize revenue from contracts where the right to consideration from a customer corresponds directly with the value to the customer of the corporation’s performance completed to date in the amount to which the corporation has the right to invoice

• the corporation may apply the standard to a portfolio of contracts; specific contract types will be assessed to determine if the portfolio method is most appropriate

2019–20 OUTLOOKSaskWater anticipates revenues to grow slightly, moving to $60.0 million (an increase of 4.7 per cent). It is anticipated that the non-potable, wastewater, services (with the exception of certified operation and maintenance) and other revenues will remain consistent. Potable revenues

are anticipated to increase with rate increases targeted to recover increased costs as well as some legacy contract renegotiations. Certified operation and maintenance is anticipated to grow with potential new customer revenue in 2018–19.

The corporation has budgeted a net income of $6.7 million for 2019–20, which represents a projected return on equity of 9 per cent.

SaskWater anticipates declaring a dividend for the 2019–20 fiscal year, equal to 50 per cent of profits, or approximately $3.4 million.

SaskWater expects to invest a maximum of $25.2 million net ($31 .7 million gross, with the difference made up from customer contributions in aid of capital) in water and wastewater infrastructure projects in the province.

Investments include:

Melville Potable Water Supply System – Completion of water treatment plant

Pierceland Lagoon Expansion – Upgrades to facility for regulation compliance

Melfort WTP and Clarifier Upgrade – System reliability associated with contract renegotiations

White City – Pipeline expansion

SSEWS Canal Improvements – Structure replacement program

Prospective new customer – Water treatment plant purchase

Prospective new regional water supply system design

General Asset Management Projects

FUTURE ACCOUNTING CHANGESThe following standards or amendments to standards have been issued but are not effective for the year ended March 31 , 2019, and may have an impact on the financial statements:

IFRS 16 Leases, effective January 1 , 2019

The corporation is reviewing the standards to determine the potential impact of these new standards and amendments to standards.

Key Financial Data ($ millions)

YearTotal

Comprehensive Income

Revenue Total AssetsReturn on

Average Equity

Debt Ratio

2018-19 $7.9 $57.3 $359.7 10.7% 46.1%

2017-18 $8.2 $56.9 $351.9 12.5% 46.6%

2016-17 $6.5 $53.0 $338.1 11.0% 44.7%

2015-16 $5.6 $48.0 $328.9 10.3% 45.7%

2015-16* $7.4 $59.0 $328.9 13.7% 45.7%

2014 $5.5 $43.9 $316.4 11.3% 45.0%

2015-16* – Data is for the 15-month period from January 1, 2015 – March 31, 2016

Key Operational Data

YearTotal

Customer Accounts

Total Sales Volumes

(million cubic metres)

Kilometres of Potable and Non-potable

Pipeline

Full-Time Equivalent Employees

2018-19 415 48.7 967 129.7

2017-18 414 44.7 964 126.9

2016-17 414 43.9 935 123.9

2015-16 411 46.8 935 120.0

2015-16* 411 57.4 935 120.0

2014 406 38.0 865 115.5

2013 406 40.1 876 111.9

2015-16* – Data is for the 15-month period from January 1, 2015 – March 31, 2016

s u c c e e d i n g f i n a n c i a l l y66 67

RISK MANAGEMENTProviding safe, reliable and sustainable water and wastewater services is subject to risks that can affect the achievement of SaskWater’s strategic goals and objectives. SaskWater manages risk through an Enterprise Risk Management (ERM) program designed to minimize the impact of risks and enable the corporation to achieve business goals and performance objectives. To ensure consistent risk management, SaskWater has implemented an Enterprise Risk Management Policy that provides an approach to manage risks and establishes the roles and responsibilities throughout the organization.

The Executive Committee is responsible for identifying risks that impact the corporation’s strategic objectives and for implementing mitigation measures to manage those risks. The Board of Directors provides oversight and stewardship to the corporation and ensures that an acceptable risk management program is in place. The Board receives an annual update that provides a broad overview of the top risks and how they are being mitigated.

The following discussion outlines the top 2018–19 corporate risks and the strategies implemented to deal with them.

CHANGING COMPETITIVE MARKETSaskWater’s growth strategy is dependent on the development, acquisition and operation of municipal, regional and industrial water and/or wastewater systems in Saskatchewan. As part of this strategy, SaskWater is looking to broaden current services and to expand into new service areas and lines of business.

SaskWater’s major competitors are municipalities themselves. Communities choose to operate their own water and wastewater facilities either because they view third party services as too expensive, or do not desire to lose control of their water and wastewater services. Larger municipalities often provide regional services to adjacent communities as a revenue generation strategy.

Increased competition by municipalities may result in the loss of new business opportunities or result in non-renewal or loss of existing service contracts. Other entities, particularly

municipalities, may be seen as having lower overhead costs or little to no profit requirements, resulting in costs that are perceived to be less than SaskWater. This perception is a challenge to being recognized as a competitive service provider.

Strategies that SaskWater is pursuing internally to mitigate the impact of this risk include:

• development of strategic plan and business plan

• development of targeted marketing strategy, including review of growth targets

• development and training of business development group

• obtaining feedback from customers regarding customer relations and service

• maintaining an external presence at key customer events, such as the Saskatchewan Urban Municipalities Association, and Saskatchewan Association of Rural Municipalities conventions

FINANCIAL DEPENDENCE ON INDUSTRIAL CUSTOMERSA large portion of SaskWater’s revenues are concentrated in a few large resource-based industrial customers. Consequently, SaskWater’s revenues are susceptible to fluctuations in volume usage due to the nature of SaskWater’s volumetric-based rates.

The resource sector is subject to global market forces and significant production swings. Demand for resources is influenced by many global economic and environmental factors, such as commodity price, formation or changes in corporate consortiums, population, global trade environment and weather/climate conditions. As economic conditions have a significant influence on the consumption patterns of industrial customers, any change to production and investment decisions could either negatively or positively impact the demand for services offered by SaskWater.

The strategies that SaskWater uses to mitigate this risk include:

• an annual review of potable and non-potable rates using an industry standard cost of service methodology

• identifying minimum purchase requirements in contracts to offset the effect of volatility in service needs

• reinforcing a corporate culture to identify and implement cost-efficient operations

• pursuing business development activities that focus on diversifying the customer base in other areas, with an emphasis on leveraging existing regional water supply systems

CHANGING REGULATORY ENVIRONMENTSaskWater’s water and wastewater operations are subject to stringent regulatory requirements that govern the environment, health and safety, quality of water provided to customers, water allocation rights and the manner in which SaskWater collects, treats, discharges and disposes of wastewater.

The federal government continually reviews water and wastewater regulations, and these changes are generally adopted by the provincial regulator. Regulatory requirements for wastewater have become more stringent, requiring different timelines to do upgrades depending on the condition of water treatment facilities.

Regulatory changes in other areas of legislation may also impact SaskWater’s corporate, operational and engineering activities. Any changes to legislation regarding greenhouse gas emissions, labour relations or corporate business functions could have some material impact.

Mitigation measures to manage this risk include:

• maintaining a solid working relationship with the provincial and federal regulatory agencies

• actively participating in consultation reviews of potential regulatory changes

• designing facilities with the potential for future regulatory changes in mind

• completing the capital budget in conjunction with assessments for regulatory compliance

• ongoing training of certified operators to ensure facilities are operated in accordance with regulations

CONTAMINATION OF WATER SUPPLIESThe quality of water for drinking water is important to the health and well-being of the public. Contamination of drinking water, either by biological pathogens or chemical pollutants, can cause illness. In the case of biological contamination, boil water advisories are put in place to protect human health.

Contamination to potable water systems can result from factors such as inadequate or inappropriate treatment processes, failure to maintain appropriate levels of residual chlorine in water supplies or external contaminants entering potable water systems.

Contamination of source water can occur from naturally occurring compounds, chemicals in groundwater systems and pollution from man-made sources. Contamination of source water can be the result of one incident or due to long-term exposure that can degrade the quality of water over time.

The contamination of potable supplies and/or the source water can have implications to service delivery and may require costly infrastructure upgrades and/or an alternate supply of water.

Consequently, potable water is a highly regulated resource, and any issues that may occur require urgent responses. If a contamination were to occur, services might be either suspended or reduced until the contamination is cleared.

SaskWater’s operations are monitored with stringent water treatment standards and controls covering quality of treated water; the number, frequency and form of water quality testing; and mandatory improvement to the water treatment processes if required. SaskWater strives to meet or exceed the regulatory requirements for treatment on all of its potable water supply systems to ensure the health and safety of customers.

Other mitigation strategies include:

• a corporate Water Quality Policy, whereby the corporation is required to meet or exceed provincial water quality regulations at its owned water treatment and supply facilities and Certified Operation and Maintenance sites

• extensive water quality testing and reporting

s u c c e e d i n g f i n a n c i a l l y68 69

• ensuring system operators meet or exceed the regulatory requirements for education and training

• working closely with the regulatory agencies regarding SaskWater’s waterworks infrastructure and participating in consultations about potential future regulatory changes

• a remote monitoring system that is operated 24 hours a day, 365 days a year, to augment manual operations and provide instant alarms in case of problems

• procedures to notify customers about precautionary drinking water advisories or boil water orders

• researching, testing and implementing new technologies and techniques to improve the quality of source and drinking water

• Quality Control and Quality Assurance plan and Emergency Response plan are in place

• day-to-day management and oversight of facilities

SERVICE INTERRUPTIONS AND FAILURESWater and wastewater works are subject to potential service interruptions, such as asset failures, which could impact customer satisfaction and the corporation’s reputation and financial position. SaskWater has systems and assets, including water and wastewater treatment facilities and/or equipment, pipelines, pump stations and booster stations. Some of these assets may require replacement due to their age and/or condition. Aging assets are expensive to maintain, operate and replace and have the potential to result in service interruptions if not maintained properly.

SaskWater’s water and wastewater infrastructure is subject to other operational risks, including mechanical failure, accidents, storms, power failure, and other force majeure events. Any of these situations may result in service interruptions.

Service interruptions can have an impact on both SaskWater and its customers. Customers run the risk of having no water for consumption or production purposes. Where there are extended service interruptions, customer satisfaction will be significantly impacted. With any service interruption, SaskWater runs the risk of losses to revenue, and where asset failures occur, repair costs could be substantial.

Strategies in place to mitigate these risks include:

• asset management system to proactively manage asset refurbishment

• targeted capital spending on asset refurbishment for all of SaskWater’s systems, particularly for those systems that require critical asset upgrades

• emergency response plans in place for individual facilities

• vulnerability assessments, including site security

• contact procedures to notify customers in cases of service interruptions

• remote monitoring 24 hours a day, 365 days a year, to provide instant alarms in case of problems

• systems designed with some redundancy to minimize down time

• third party system audits every five years to identify potential issues

• customers are encouraged to have water storage reserves to meet their needs in cases of service interruptions; in extreme circumstances, water may be hauled from other locations

• presence of liability insurance

OCCUPATIONAL HEALTH AND SAFETYThe health and safety of SaskWater employees, contractors, customers and the general public are important to the corporation. SaskWater’s operations staff is exposed to a variety of safety risks, including confined spaces, working with hazardous chemicals and working with high-voltage electrical facilities where water is located. If SaskWater does not provide adequate safety measures, such as appropriate internal procedures, training and safety equipment, staff will be at risk. Further, SaskWater’s contractors and engineering staff are exposed to construction safety risks during the construction of water supply systems. SaskWater is responsible to ensure that all safety requirements are being met. Failure to comply with corporate policies could result in a serious injury or loss of life. Where safety measures are not being met, SaskWater and its employees run the risk of regulatory fines, litigation and negative impacts to reputation and financials.

SaskWater manages this risk through:

• the Occupational Health and Safety program, which is guided by a series of policies and procedures that outline safety requirements for situations such as use of personal protective equipment, working alone, accident investigations and job safe hazard analysis

• Occupational Health and Safety committees, managed by a dedicated Occupational Health and Safety professional, to identify corporate health and safety requirements of staff and contractors

• identified and implemented mandatory safety training for job requirements

• safety shares and sharing of safety protocols at corporate and operational meetings to encourage a culture of safety

EMPLOYEE RELATIONSHaving a positive relationship with SaskWater’s employees is critical to the success of the organization and the provision of safe, reliable water and wastewater services to customers. Employee engagement and empowerment are cornerstones in having a productive and innovative environment. Any changes to the organization as a result of mandate, corporate decisions and/or legislative changes could result in a misunderstanding by employees and affect relationships, particularly if those changes are not communicated properly.

Negative implications of deteriorating employee relationships are loss of productivity, a decline in employee/employer trust and possibly labour disruptions with in-scope employees.

SaskWater manages this risk by:

• promoting its commitment to train staff

• maintaining a competitive remuneration package

• having a commitment to a safe work environment

• implementing an employee performance management system designed to link corporate objectives with individual work plans and to provide constructive feedback on performance

• communicating the corporation’s plans and activities via an employee newsletter

• monitoring engagement levels through an employee engagement survey

• having regular meetings with the management, staff and/or union to discuss any issues related to policy, mandate, corporate direction and/or legislative changes

s u c c e e d i n g f i n a n c i a l l y70 71

SASKWATER’S BRAND Brand is essential to organizations, as it defines how they are unique and influences how programs are delivered to customers. It defines the journey that customers are exposed to when working with an organization and the reputation it has as a service provider. Enhancing SaskWater’s brand is important, as strong reputations dictate where people purchase goods and services and where people work.

SaskWater is challenged externally with respect to its brand. SaskWater is not well understood in regard to the service it provides. Confusion exists at provincial government agencies, Crown corporations, municipalities and with the general public regarding SaskWater’s role in the water sector in Saskatchewan. Much of this confusion is tied to SaskWater’s past history, where SaskWater and the Water Security Agency were one entity.

This lack of understanding has limited the opportunities to be invited by potential customers and/or agencies that would be of value/importance to SaskWater or the customer.

Mitigation measures include:

• developing and implementing a brand strategy for SaskWater

• providing a corporate focus on safe, reliable water and wastewater service supported by policies, training, system maintenance and asset refurbishment

• having the Community Investment Policy, targeted at supporting customer communities through sponsorships and donations

• implementing customer engagement meetings to discuss service and issues that customers may have

CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY INITIATIVESCorporate social responsibility and sustainability initiatives under SaskWater’s goal of Succeeding Financially include achieving accountable and transparent governance and long-term financial stability:

To achieve accountable and transparent governance, SaskWater:

• implemented an Enterprise Risk Management program and supporting policy. Every year, the corporation identifies corporate risks and assesses the top 10 against likelihood and impact. Top risks are identified in the annual report for public disclosure and submitted to Crown Investments Corporation.

• produces the annual report that documents the performance of the corporation via the balanced scorecard and financial reports for public consumption

To address long-term financial stability for the corporation, SaskWater:

• has a cost of service rate methodology in place, designed to recover the full cost of providing service, including a rate of return. In 2018–19, SaskWater undertook an external review of the cost of service rate methodology and approach to ensure that the policies and methodology applied today are appropriate given current business conditions and utility best practices.

• developed a strategy for purchase and transmission systems to address water rates

• renegotiated long-term legacy agreements to bring rates closer to the cost to provide service

• implemented efficiency initiatives to manage inflationary cost increases

– found cost reductions and deferred spending to help address government fiscal challenges

– participates in Crown collaboration efforts to identify services and resources that can be shared to reduce overall Crown costs, including replacing water meters with ones that are compatible with SaskPower’s Advanced Metering Infrastructure system

s u c c e e d i n g f i n a n c i a l l y72 73

SaskWater continues to be a financially viable organization. Two areas of priorities for Succeeding Financially include: achieving the return on equity targets approved by shareholder, and operating within the debt ratio approved by shareholder. Three measures are used to monitor these objectives.

Both the Return on Equity and Net Income measure exceeded targets. Four of SaskWater’s five major lines of businesses, including Potable, Non-potable, Certified Operation and Maintenance (COM) and Project Management, increased in revenue year-to-year, with wastewater revenue slightly decreasing.

The Debt to Debt and Equity measure is lower than target. This was due to strong revenues and lower-than-expected capital expenditure for the year, which decreased SaskWater’s debt ratio. The reduced capital investment was primarily a result of one project not proceeding when the prospective

customer determined that without grant support, it could not proceed. Also included was a second project that was delayed waiting on a grant award. Finally, a third project proceeded more slowly than expected due to cold weather conditions.

The financial success experienced by SaskWater has been achieved largely through the corporation’s growth strategy, renegotiation of underperforming contracts, and higher potable and non-potable volumes as a result of a drier summer. In 2018-19, SaskWater signed a new agreement with an existing customer for expanded COM service and renegotiated several legacy agreements to improve service and financial performance. SaskWater has made improvements on the majority of its customer agreements since 2005, which has resulted in financial stability for the corporation.

BALANCED SCORECARD

STRATEGIC OBJECTIVE

MEASURE2018–19TARGET

2018–19RESULT

INDICATORLIGHT

2019–20TARGET

2020–21TARGET

2021–22TARGET

2022–23TARGET

2023–24TARGET

ACHIEVE RETURN ON EQUITY TARGETS APPROVED BY SHAREHOLDER

14 Return on Equity 9.0% 10.7% 9.0% 9.0% 9.0% 10.4% 11.1%

15 Net Income $6,213 $7,490 $6,686 $7,346 $7,553 $7,704 $7,803

OPERATE WITHIN DEBT RATIO APPROVED BY SHAREHOLDER 16 Debt to Debt

and Equity 56.2% 46.1% 54.5% 57.5% 56.3% 58.7% 60.4%

LEGENDEXCEEDED TARGET BY 20% OR GREATER

ON TARGET

SLIGHTLY OFF TARGET BY UP TO 20%

OFF TARGET BY GREATER THAN 20%

TARGET INFORMATION NOT AVAILABLE

74 75

Independent Auditor’s Report To the Members of the Legislative Assembly Province of Saskatchewan

Opinion We have audited the financial statements of Saskatchewan Water Corporation (the “Company”), which comprise the statement of financial position as at March 31, 2019, and the statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at March 31, 2019, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (“IFRS”).

Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian GAAS”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Chartered Professional Accountants May 23, 2019 Regina, Saskatchewan

Management’s Report on Internal Control over Financial ReportingI, Doug Matthies, the President and Chief Executive Officer, and I, Danny Bollinger, Director, Financial Services and Chief Financial Officer, certify the following:

a. That we have reviewed the financial statements included in the Annual Report of SaskWater. Based on our knowledge, having exercised reasonable diligence, the financial statements included in the Annual Report, fairly present, in all material respects the financial condition, results of operations, and cash flows, as of March 31, 2019.

b. That based on our knowledge, having exercised reasonable diligence, the financial statements included in the Annual Report of SaskWater do not contain any untrue statements of material fact, or omit to state a material fact that is either required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made.

c. That SaskWater is responsible for establishing and maintaining effective internal control over financial reporting, which includes safeguarding of assets and compliance with applicable legislative authorities; and SaskWater has designed internal controls over financial reporting that are appropriate to the circumstances of SaskWater.

d. That SaskWater conducted its assessment of the effectiveness of the corporation’s internal controls over financial reporting and, based on the results of this assessment, SaskWater can provide reasonable assurance that internal controls over financial reporting as of March 31, 2019, were operating effectively and no material weaknesses were found in the design or operation of the internal controls over financial reporting.

On behalf of management,

Doug Matthies President and CEO

Danny Bollinger Director, Financial Services and Chief Financial Officer

May 23, 2019

Management’s ResponsibilityManagement has prepared the financial statements of the corporation in accordance with International Financial Reporting Standards. The financial data included elsewhere in this report is consistent with these statements and the underlying information from which the corporation prepared them.

Management has the primary responsibility for the integrity and objectivity of the financial statements. To fulfill this responsibility, the corporation maintains appropriate systems of internal controls, policies and procedures. These systems provide reasonable assurance that assets are safeguarded and that the books and records reflect the authorized transactions of the corporation.

Deloitte LLP, the corporation’s external auditors, have examined the March 31, 2019, financial statements and their report follows. The Board of Directors of SaskWater has examined and approved the statements.

On behalf of the corporation,

Doug Matthies President and CEO

Danny Bollinger Director, Financial Services and Chief Financial Officer

May 23, 2019

76 77

Statement of Comprehensive Income for the year ended(thousands of dollars)

Statement of Financial Positionas at(thousands of dollars)

March 312019

March 312018

Revenue (note 4)

Water sales and treatment $ 45,765 $ 44,816

Services 4,689 4,090

Other 6,836 7,955

57,290 56,861

Expenses

Salariesandbenefits 13,499 13,271

Operations, maintenance and administration 10,367 10,263

Depreciation of property, plant and equipment 12,293 12,033

Bulk water purchases 10,873 10,355

Saskatchewan taxes 801 786

47,833 46,708

Net income before the following 9,457 10,153

Finance income 368 334

Finance expense (2,335) (2,411)

Net finance expense (note 5) (1,967) (2,077)

Net income 7,490 8,076

Other comprehensive income

Debt retirement fund market value gains 353 179

Realized losses on debt retirement fund redemptions — (91)

Reclassificationofrealizedlossestonetfinanceexpense — 91

Net actuarial gains (losses) on retiring allowance 10 (51)

363 128

Total comprehensive income $ 7,853 $ 8,204

See accompanying notes

March 31 2019

March 31 2018

AssetsCurrent assets

Cash (note 6) $ 2,046 $ 6,758

Trade and other receivables (note 7) 7,603 9,761

Prepaid expenses and inventories (note 8) 891 1,052

Current portion of deferred charges 13 4

10,553 17,575

Deferred charges 281 37

Investment – debt retirement funds (note 9) 15,057 12,387

Property, plant and equipment (note 10) 333,762 321,851

$ 359,653 $ 351,850

Liabilities and Province’s EquityCurrent liabilities

Trade and other payables (note 11) $ 10,290 $ 7,632

Notes payable (note 12) — 5,000

Dividends payable (note 13) 2,509 664

Current portion of deferred revenue (note 14) 6,359 6,339

Current portion of provisions (note 15) 190 190

Current portion of long-term debt (note 16) 9,593 —

28,941 19,825

Deferred revenue (note 14) 191,133 196,828

Provisions (note 15) 461 618

Long-term debt (note 16) 66,800 66,393

Employee benefits (note 17) 548 524

287,883 284,188

Province’s equity

Equity advance (note 18) 8,700 8,700

Accumulated other comprehensive income (loss) 187 (176)

Retained earnings 62,883 59,138

71,110 67,662

$ 359,653 $ 351,850

Commitments and contingencies (note 20)

See accompanying notes

On behalf of the Board:

Chair Director

78 79

Statement of Changes in Equityfor the year ended(thousands of dollars)

Statement of Cash Flowsfor the year ended(thousands of dollars)

EquityAdvances

Accumulated Other

ComprehensiveIncome (Loss)

RetainedEarnings Total

Balance, March 31, 2017 $ 8,700 $ 1 $ 52,770 $ 61,471

Impact of adoption of IFRS 9:

Reclassificationofmarketvalue

losses on debt retirement funds — (305) 305 —

Recognition of expected credit losses — — 6 6

Net income — — 8,076 8,076

Other comprehensive income — 128 — 128

Dividends — — (2,019) (2,019)

Balance, March 31, 2018 8,700 (176) 59,138 67,662

Net income — — 7,490 7,490

Other comprehensive income — 363 — 363

Dividends — — (3,745) (3,745)

Balance, March 31, 2019 $ 8,700 $ 187 $ 62,883 $ 71,770

See accompanying notes

March 31 2019

March 31 2018

Operating activities

Net income $ 7,490 $ 8,076

Items not affecting cash from operations:

Depreciation of property, plant and equipment 12,293 12,033

Impairment recovery — (531)

Impairment of assets — 48

Amortization of deferred revenue (6,361) (6,213)

Amortization of provisions (208) (510)

Employeebenefits 34 (6)

Netfinancingexpense 1 ,967 2,077

Loss (gain) on disposal of property, plant and equipment 5 (78)

Change in non-cash working capital items:

Trade and other receivables 2,158 (2,965)

Prepaid expenses and inventories 161 52

Deferred charges (253) 5

Trade and other payables 2,555 (269)

Infrastructure deposits — (4,140)

Deferred revenue 686 13,146

Interest paid (2,401) (2,319)

Interest received 50 18

Cash provided by operating activities 18,176 18,424

Investing activities

Property, plant and equipment expenditures (24,163) (24,059)

Proceeds on disposal of property, plant and equipment 166 322

Cash used in investing activities (23,997) (23,737)

Financing activities

Proceeds from long-term debt 10,000 15,000

Repayment of long-term debt — (7,600)

Net repayments of notes payable (5,000) (2,200)

Debt retirement fund installments (1,991) (1,621)

Debt retirement fund redemptions — 6,140

Dividends paid (1,900) (1,795)

Cash provided by financing activities 1 ,109 7,924

Change in cash (4,712) 2,611

Cash, beginning of year 6,758 4,147

Cash, end of year $ 2,046 $ 6,758

See accompanying notes

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Notes to the Financial StatementsMarch 31, 2019(thousands of dollars)

Notes to the Financial StatementsMarch 31, 2019(thousands of dollars)

3. Significant accounting policies (continued)g) New standards and interpretations not yet adopted (continued)

1. General informationTheSaskatchewanWaterCorporation(theCorporation)isacorporationlocatedinCanada.TheaddressoftheCorporation’sregisteredofficeandprincipalplaceofbusiness is 200-111 Fairford Street East, Moose Jaw, SK, S6H 1C8.

The Corporation was established on July 1, 1984 under the authority of The Water Corporation Act which remained in effect until September 30, 2002. On October 1, 2002 The Saskatchewan Water Corporation Act was proclaimed.

By virtue of The Crown Corporations Act, 1993, the Corporation has been designated as a subsidiary of Crown Investments Corporation of Saskatchewan (CIC). Accordingly,thefinancialresultsoftheCorporationareincludedintheconsolidatedfinancialstatementsofCIC,aProvincialCrowncorporation.AstheCorporationisaProvincial Crown corporation, it is not subject to Federal or Provincial income taxes in Canada, but is subject to Provincial corporate capital tax.

The principal activity of the Corporation is to construct, acquire, manage or operate water facilities and to provide services in accordance with any agreements that it enters into pursuant to The Saskatchewan Water Corporation Act.

2. Basis of preparationa) Statement of compliance

TheCorporation’sfinancialstatementsarepreparedbymanagementinaccordancewithInternationalFinancialReportingStandards(IFRS).Thesefinancialstatementswere approved and authorized for issue by the Board of Directors on May 23, 2019.

b) Basis of measurement

Thefinancialstatementshavebeenpreparedonthehistoricalcostbasisexceptforthefollowing:

FinancialinstrumentsthatareaccountedforaccordingtothefinancialinstrumentcategoriesdefinedinNote3(n).

ProvisionsdefinedinNote3(g).

EmployeebenefitobligationsdefinedinNote3(j).

c) Functional and presentation currency

ThesefinancialstatementsarepresentedinCanadianDollars,whichistheCorporation’sfunctionalcurrency.

d) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market at the measurement date under current market conditions (exit price). The Corporation’s own credit risk and the credit risk of the counterparty havebeentakenintoaccountindeterminingthefairvalueoffinancialassetsandliabilities.TheCorporationhasclassifiedthefairvalueofitsfinancialinstrumentsaslevel1,2,or3(Note22)asdefinedbelow:

Level 1 — Fair Values are determined using inputs that are quoted prices (unadjusted) in active markets for identical assets or liabilities to which the Corporation has immediate access.

Level 2 — Fair Values are determined using inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. Debt retirement funds are valued at closing period-end unit prices received from the Saskatchewan Ministry of Finance. In all other circumstances, valuations aredeterminedwithreferencetosimilaractivelytradedinstruments.Alllong-termdebtobligationsareestimatedusingdiscountedcashflowanalysisbasedon current market yields for similar arrangements.

Level 3 — Fair values are determined based on inputs for the asset or liability that are not based on observable market data.

e) Use of estimates and judgments

ThepreparationoffinancialstatementsinconformitywithIFRSrequiresmanagementtomakejudgments,estimatesandassumptionsthataffecttheapplicationofaccounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

InformationaboutsignificantareasofestimationuncertaintyandcriticaljudgmentsinapplyingaccountingpoliciesthathavethemostsignificanteffectontheamountsrecognizedinthefinancialstatementsisincludedintheaccountingpolicyinNote3,andthefollowingnotes:

• Note 7 — trade and other receivables

• Note 10 — depreciation of property, plant and equipment

• Note 14 — deferred revenue and infrastructure deposits

• Note 15 — provisions

• Note17—measurementofemployeebenefits

• Note 20 — commitments and contingencies

f) New standards and interpretations that came into effect during the year

The Corporation adopted the following new and amended standards and interpretations effective April 1 , 2018:

IFRS 15 Revenue from Contracts with Customers

Effective April 1 , 2018, the Corporation has adopted IFRS 15, Revenue from Contracts with Customers which replaced IAS 11, Construction Contracts and IAS 18, Revenueandrelatedinterpretations,usingthemodifiedretrospectiveapproachwherebythecumulativeeffectofanyadjustmentsarerecognizedintheopening balance of retained earnings as of April 1 , 2018. The comparative information has not been restated and continues to be reported under previous accounting standards. The requirements of IFRS 15 had no impact on the Corporation and therefore no adjustments to the opening balance of retained earningsortothepresentationofthestatementsoffinancialpositionwererequired.Althoughnochangesweremadetoexistingaccountingpoliciesadditional disclosure has been provided in Notes 3(a), 3(b) and 3(i).

In adopting IFRS 15, the Corporation elected to apply the following practical expedients:

• The Corporation will apply the standard retrospectively only to contracts that are not completed contracts at the date of initial application,

• The Corporation will recognize revenue from contracts where the right to consideration from a customer corresponds directly with the value to the customer of the Corporation’s performance completed to date in the amount to which the Corporation has the right to invoice,

• TheCorporationmayapplythestandardtoaportfolioofcontracts.Specificcontracttypeswillbeassessedtodetermineiftheportfoliomethodismostappropriate.

g) New standards and interpretations not yet adopted

The following standards or amendments to standards have been issued but are not effective for the year ended March 31, 2019 that may have an impact on the financialstatements:

Standards or amendments to standards Effective DateIFRS 16 Leases January 1, 2019The Corporation is reviewing the standard to determine the potential impact of these new standards and amendments to standards.

3. Significant accounting policiesa) Revenue recognition

The Corporation recognizes revenue when it transfers control over a promised good or service, a performance obligation under the contract, to a customer and where the Corporation is entitled to consideration as a result of completion of the performance obligation. Depending on the terms of the contract with the customer, revenuerecognitioncanoccuratapointintimeorovertime.Whenaperformanceobligationissatisfied,revenueismeasuredatthetransactionpricethatisallocated to that performance obligation. For contracts where non-cash consideration is received, revenue is recognized and measured at the fair value of the non-cash consideration.

Customer contracts may include the transfer of multiple goods and services. Where the Corporation determines that the multiple goods and services are not distinct performanceobligations,theyaretreatedasasingleperformanceobligation.Therearecurrentlynocontractsthatcontainsignificantfinancingcomponents.Revenueisclassifiedaswatersalesandtreatment,servicesandotherrevenuedependingonthenatureofeachdistinctperformanceobligation.

Contract costs for obtaining a customer contract are recognized as expenses as incurred unless they create an asset related to future contract activity that the Corporation expects to recover.

Significantjudgmentmayberequiredtodeterminethenumberofdistinctperformanceobligationswithinacontractandtheallocationoftransactionpricetomultiple performance obligations in a contract, and to determine whether the Corporation acts as a principal or agent for certain performance obligations. When multipleperformanceobligationsareidentifiedinacontract,thetransactionpriceisallocatedbasedonthestand-alonesellingpriceofeachperformanceobligationspecifiedseparatelyinthecontract.Ifstand-alonesellingpriceisnotobservable,theCorporationestimatesthestand-alonesellingpriceforeachdistinctperformance obligation based on the related expected cost plus margin of each distinct performance obligation. The Corporation is acting as a principal when the Corporation controls the goods or services before transfer to the customer. The Corporation is acting as an agent when it is obliged to arrange for the provision of the goods and services by another party that are not controlled by the Corporation before transfer to the customer. When the Corporation acts as an agent, the revenue is recognized net of any related costs incurred.

TheCorporation’sprinciplesourcesofrevenueandmethodsappliedtotherecognitionoftheserevenuesinthesefinancialstatementsareasfollows:

Water sales and treatment revenues

The contracts with customers for the supply of each of potable water, non-potable water and wastewater treatment primarily consist of perpetual contracts that are effective until terminated by the customer or the Corporation. The Corporation provides a series of distinct goods or services, which are simultaneously received and utilizedbythecustomers.Eachoftheperformanceobligationsissatisfiedovertimeusingtheoutputmethodforrecognitionofrevenue,i.e.theunitsofeachgoodorservice supplied to the customer which is when control of the good or service has been transferred to or from the customer as it passes through the delivery point.

Revenues are calculated based on the customer’s usage of the goods during the period, at the applicable rates as per the terms of the respective contracts. Customers are generally billed on a monthly basis and payment is generally due within 30 days of billing the customer.

Services revenues

Thecontractswithcustomersforthesupplyofcertifiedoperations&maintenanceandremotemonitoringservicesprimarilyconsistofperpetualcontractsthatare effective until terminated by the customer or the Corporation. The contracts with customers for the supply of each of project management, northern project management, operator training, and leak detection services primarily consist of short and medium term contracts that are effective until the end of the term, when the performanceobligationisfulfilledortheyareterminatedbythecustomerortheCorporation.Certainservicecontractsincludemultipleservices,eachofwhichtheCorporation has determined to typically constitute distinct performance obligations. Each of the performance obligations in these contracts relate to the provision ofaseriesofdistinctservices,whicharesimultaneouslyreceivedandutilizedbythecustomers.Performanceobligationsunderservicecontractssuchascertifiedoperationsandmaintenance,operatortraining,leakdetectionandremotemonitoringaresatisfiedovertimeusingtheoutputmethod.Timeanddisbursementcontractssuchasoncecontainedinancillarycertifiedoperationsandmaintenance,projectmanagementandnorthernprojectmanagementaresatisfiedovertimeusing the input method.

Revenues are calculated based on the services provided to the customer during the period, at the applicable rates as per the terms of the respective contracts. These revenues include an estimate of the value of services provided to the customers in the reporting period and billed subsequent to the reporting period. Customers are generally billed within a month and payment is generally due within 30 days of billing the customer.

Other revenues

The contracts with customers that result in deferred revenues primarily consist of perpetual contracts that are effective until terminated by the customer or the Corporation. Recognition of the deferred revenue is described in Note 3 (i).

Revenues are calculated based on the goods or services provided to the customer during the period, at the applicable rates as per the terms of the respective contracts. Customers are generally billed within a month and payment is generally due within 30 days of billing the customer.

b) Contract assets and liabilities

AcontractliabilityisrecordedwhentheCorporationreceivesconsiderationbeforetheperformanceobligationshavebeensatisfied.Contractliabilitiesrelatedtocustomer contributions are described in Note 3 (i). A contract asset is recorded when the Corporation has rights to consideration for the completion of a performance obligation when that right is conditional on something other than the passage of time. The Corporation recognizes unconditional rights to consideration separately as a receivable. Contract assets and receivables are evaluated at each reporting period to determine whether there is any objective evidence that they are impaired.

c) Inventories

Maintenance materials and treatment supplies inventory are recorded at the lower of weighted average cost and net realizable value. The net realizable value of inventory is the estimated market price for the same or similar items. Materials and supplies are charged to inventory when purchased and then expensed or capitalized when used.

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d) Property, plant and equipment

Property, plant and equipment is recorded at cost less accumulated depreciation and any accumulated provisions for impairment. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, and borrowing costs on qualifying assets for those projects that are under construction for a period greater than six months. Assets under construction are recorded as in progress until they are available for use, at which time they are transferred to property, plant and equipment.

To the extent that funds are borrowed generally and used for the purpose of obtaining a qualifying asset, the amount of borrowing costs eligible for capitalization are determined by applying a capitalization rate to the expenditures on that asset. The capitalization rate is the weighted average of the borrowing costs applicable to the borrowingsthatareoutstandingduringtheperiod,otherthanborrowingsmadespecificallyforthepurposeofobtainingaqualifyingasset.

Allotherborrowingcostsarerecognizedinprofitorlossintheperiodinwhichtheyareincurred.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

The cost of replacing a part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefitsembodiedwithinthepartwillflowtotheCorporation,anditscostcanbemeasuredreliably.Thecarryingamountofthereplacedpartisderecognized.Thecosts of the day-to-day servicing of property, plant and equipment are recognized in net income as incurred.

When property, plant and equipment is disposed of or retired, the related cost, accumulated depreciation and any accumulated impairment losses are eliminated. Any resultinggainsorlossesarereflectedinnetincomefortheperiod.

e) Depreciation

Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value.

Depreciation is recognized in net income on a straight-line balance basis over the estimated useful lives of each part of an item of property, plant and equipment, since thismostcloselyreflectstheexpectedpatternofconsumptionofthefutureeconomicbenefitsembodiedintheasset.

The depreciation rates used for asset classes are as follows:

Property, plant and equipment Rate

Building 2.50% to 5.00%Water facilities 2.00% to 10.00%Maintenanceequipmentandofficeequipment 5.00%to33.33%

Depreciationmethods,estimatedusefullivesandresidualvaluesarereviewedateachfinancialyearendandadjustedifappropriate.

f) Impairment

i) Financial assets

TheCorporationrecognizeslossallowancesforexpectedcreditlosses(ECLs)onfinancialassetsmeasuredatamortizedcost;anddebtinstrumentsdesignatedas FVOCI. The Corporation uses a matrix to determine the lifetime expected credit losses for trade receivables. Debt instruments and other receivables that are determined to have low credit risk at the reporting date are measured at 12-month ECL. The Corporation considers a debt instrument to have low credit risk when its credit risk rating is A or higher (investment grade).

The Corporation uses historical patterns for the probability of default, the timing of collection and the amount of the incurred credit loss, which are adjusted based on management’s judgment about whether current economic conditions and credit terms are such that actual losses may be higher or lower than what the historical patternssuggest.TheCorporationassumesthatthecreditriskonafinancialassethasincreasedsignificantlyifitismorethan90dayspastdue.TheCorporationconsidersafinancialassettobeindefaultwhentheborrowerisunlikelytopayitscreditobligationstotheCorporationinfull,withoutrecoursebytheCorporationtoactionssuchasrealizingsecurity,orthefinancialassetis365daysormorepastdue.

Lossallowancesforfinancialassetsmeasuredatamortizedcostaredeductedfromthegrosscarryingamountoftheassets.FordebtinstrumentsatFVOCI,thelossallowanceischargedtoprofitorlossandisrecognizedinOCI.Thegrosscarryingamountofafinancialassetiswrittenofftotheextentthatthereisnorealisticprospect of recovery.

ii) Non-financialassets

ThecarryingamountsoftheCorporation’snon-financialassetsarereviewedateachreportingdatetodeterminewhetherthereisanyindicationofimpairment.Ifanysuch indication exists, then the asset’s recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated futurecashflowsarediscountedtotheirpresentvalueusingadiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecificto the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cashinflowsfromcontinuingusethatarelargelyindependentofthecashinflowsofotherassetsorgroupsofassets(thecash-generatingunit,or“CGU”).

TheCorporation’scorporateassetsdonotgenerateseparatecashinflows.Ifthereisanindicationthatacorporateassetmaybeimpaired,thentherecoverableamountisdeterminedfortheCGUtowhichthecorporateassetbelongs.Whereareasonableandconsistentbasiscanbeidentified,corporateassetsarealsoallocated to individual cash-generating units, or otherwise, they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocationbasiscanbeidentified.

AnimpairmentlossisrecognizedifthecarryingamountofanassetoritsCGUexceedsitsestimatedrecoverableamount.Impairmentlossesarerecognizedinnetincome.ImpairmentlossesrecognizedinrespectofCGU’sareallocatedtoreducethecarryingamountsoftheotherassetsintheunit(groupofunits)onaproratabasis.

Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognized.

g) Provisions

A provision is recognized if, as a result of a past event, the Corporation has a present legal or constructive obligation that can be estimated reliably, and it is probable thatanoutflowofeconomicbenefitswillberequiredtosettletheobligation.Provisionsaredeterminedbydiscountingtheexpectedfuturecashflowsataratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheliability.Theunwindingofthediscountisrecognizedasfinanceexpense.Currently the only provision recognized relates to onerous contracts.

h) Onerous contracts

AprovisionforonerouscontractsisrecognizedwhentheexpectedbenefitstobederivedbytheCorporationfromacontractarelowerthantheunavoidablecosts

of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Corporation recognizes any impairment loss on the assets associated with that contract.

i) Deferred revenue

Government grants

GovernmentgrantsarerecognizedinitiallyasdeferredrevenueatfairvaluewhenthereisreasonableassurancethattheywillbereceivedandtheCorporationwillcomplywiththeconditionsassociatedwiththegrant.GrantsthatcompensatetheCorporationforexpensesincurredarerecognizedinnetincomeonasystematicbasisinthesameperiodsinwhichtheexpensesarerecognized.GrantsthatcompensatetheCorporationforthecostofanassetarerecognized in net income on a systematic basis over the useful life of the asset. There is no change in policy for revenue recognition of government grants as a result of the implementation of IFRS 15.

Customer contributions

Customer contributions are received from customers, generally in the form of cash, to assist in the construction of assets to provide services to the contributing customers. Prior to the commencement of construction these amounts are recorded as infrastructure deposits. As construction occurs these amounts are transferred to deferred revenue.

Whencompletionoftheconstructionisdeterminedtobeaseparatelyidentifiableperformanceobligation,theseamountsarerecognizeddirectlyintonetincome. When completion of construction is not determined to be separate from the ongoing supply or services performance obligation, these amounts are transferred to deferred revenue and recognized in net income over the term of the contract with the customer. If the contract does not specify a period or automatically continues in effect after an initial term, the revenue shall be recognized over a period no longer than the useful life of the related assets used to provide the ongoing service. There is no change in policy for revenue recognition of customer contributions as a result of the implementation of IFRS 15.

j) Employee benefits

i) Short-termemployeebenefits

Short-termemployeebenefitobligationsaremeasuredonanundiscountedbasisandareexpensedastherelatedserviceisprovided.

A liability is recognized for the amount expected to be paid under short-term cash bonus if the Corporation has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

ii) Definedcontributionplan

Adefinedcontributionplanisapost-employmentbenefitplanunderwhichtheCorporationpaysfixedcontributionsintoaseparateentityandwillhavenolegalorconstructiveobligationtopayfurtheramounts.Obligationsforcontributionstodefinedcontributionpensionplansarerecognizedasanemployeebenefitexpenseinnet income in the periods during which services are rendered by employees.

iii) Definedbenefitretirementallowanceplan

TheCorporation’sobligationistheamountoffuturebenefitthatemployeeshaveearnedinreturnfortheirserviceinthecurrentandpriorperiods.AsatDecember31ofeachyearthefuturebenefitisactuariallydeterminedusingtheprojectedbenefitmethod.Anyactuarialgainsorlossesarerecognizedinothercomprehensiveincome(loss) and the Corporation will transfer any actuarial gains or losses from other equity to retained earnings in the year it is recognized in other comprehensive income (loss).

k) Lease payments

Payments made under operating leases are expensed on a straight-line basis over the term of the lease. Lease incentives received are recognized as an integral part of the total lease expense, over the term of the lease.

l) Finance income and expense

Financeincomecomprisesinterestincomeonfundsinvestedandchangesinthefairvalueoffinancialassetsatfairvaluethroughprofitorloss.Interestincomeisrecognized as it accrues in net income, using the effective interest method.

Financecostscompriseinterestexpenseonborrowings,unwindingofthediscountonprovisions,changesinthefairvalueoffinancialassetsatfairvaluethroughprofitorlossandimpairmentlossesrecognizedonfinancialassets.Borrowingcoststhatarenotdirectlyattributabletotheacquisition,constructionorproductionofaqualifying asset are recognized in net income using the effective interest method.

m) Equity advance

TheCorporationperiodicallyreceivesfundingfromitsparentandsoleequityholder,CrownInvestmentsCorporationofSaskatchewan.Fundingisfirstanalyzedto determine whether the funding is a transaction with the equity holder in their capacity as an equity holder, i.e. equity injection, or whether the funding would be availabletootherpartiesforaspecificpurpose.IfthereisnorequirementtocomplywithcertainconditionsrelatingtotheoperatingactivitiesoftheCorporation,thefunding is recorded as an equity advance. If the Corporation must comply with certain past or future conditions relating to the operating activities of the Corporation, andthefundingcouldbeavailabletootherpartiesforaspecificpurpose,thefundingisrecordedasagovernmentgrant(seeNote3(i)).

n) Financial instruments

TheCorporationclassifiesitsfinancialinstrumentsintooneofthefollowingcategories:amortizedcost(AC);fairvaluethroughprofitorloss(FVTPL);fairvaluethroughothercomprehensiveincome(FVOCI);andotherliabilities(OL)(Note22).

Allfinancialinstrumentsaremeasuredatfairvalueoninitialrecognitionandrecordedonthestatementoffinancialposition.Financialassetsandliabilitiesareoffsetandthenetamountpresentedinthestatementoffinancialpositionwhen,andonlywhen,theCorporationhasalegalrighttooffsettheamountsandintendseithertosettle on a net basis or to realize the asset and settle the liability simultaneously.

TheCorporationderecognizesafinancialassetwhenthecontractualrightstothecashflowsfromthefinancialassetexpire,orittransfersthecontractualrightstoreceivethecashflowsofthefinancialassetinatransactionwheresubstantiallyalltherisksandrewardsofownershipofthefinancialassetaretransferredorinatransactionwheretheCorporationneithertransfersnorretainssubstantiallyalloftherisksandrewardsofownershipofthefinancialassetbutdoesnotretaincontroloftheasset.AnyinterestintransferredfinancialassetsthatiscreatedorretainedbytheCorporationisrecognizedasaseparateassetorliability.

TheCorporationinitiallyrecognizesdebtsecuritiesissuedonthedatethattheyareoriginated.Allotherfinancialliabilitiesarerecognizedinitiallyonthetradedateatwhich the Corporation becomes a party to the contractual provisions of the instrument.

Notes to the Financial StatementsMarch 31, 2019(thousands of dollars)

3. Significant accounting policies (continued)

Notes to the Financial StatementsMarch 31, 2019(thousands of dollars)

3. Significant accounting policies (continued)i) Deferred revenue (continued)

84 85

TheCorporationderecognizesafinancialliabilitywhenitscontractualobligationsaredischarged,cancelledorexpire.

TheCorporationalsoderecognizesafinancialliabilitywhenthereisasubstantialmodificationofthetermsofanexistingfinancialliabilityorapartofit.Inthissituation,anewfinancialliabilityunderthenewtermsisrecognizedatfairvalue,andthedifferencebetweenthecarryingamountofthefinancialliabilityorpartofthefinancialliabilityextinguishedandthenewfinancialliabilityunderthenewtermsisrecognizedinprofitorloss.

i) Amortized cost

Afinancialassetismeasuredatamortizedcostifbothofthefollowingcriteriaaremet:Theassetisheldtocollectitscontractualcashflows;andthecontractualtermsofthefinancialassetgiveriseonspecifieddatestocashflowsthataresolelypaymentsofprincipalandinterest.Financialassetsincludedwithinthiscategoryareinitiallyrecognizedatfairvalueandsubsequentlymeasuredatamortizedcost,lessimpairmentlosses.TheCorporationhasclassifiedtradeandotherreceivablesasamortizedcostfinancialassets.

ii) Fair value through other comprehensive income (FVOCI)

AfinancialassetismeasuredatFVOCIifbothofthefollowingcriteriaaremet:theobjectiveofthebusinessmodelisachievedbothbycollectingcontractualcashflowsandsellingfinancialassets;andthecontractualtermsofthefinancialassetgiveriseonspecifieddatestocashflowsthataresolelypaymentsofprincipalandinterest.The Corporation may make an irrevocable election at initial recognition for particular investments in equity instruments that would otherwise be measured at fair valuethroughprofitorlosstopresentsubsequentchangesinfairvalueinothercomprehensiveincome.Thiselectionismadeforeachseparateinvestment.Financialassets included within FVOCI are initially and subsequently measured at fair value. Movements in the carrying amount should be recorded through OCI, except for the recognitionofimpairmentgainsorlosses,interestrevenueandforeignexchangegainsandlosseswhicharerecognizedinprofitandloss.Wherethefinancialassetisderecognized,thecumulativegainorlosspreviouslyrecognizedinOCIisreclassifiedtoprofitorlossasareclassificationadjustment.TheCorporationhasclassifieddebt retirement funds as FVOCI assets.

iii) Fairvaluethroughprofitorloss(FVTPL)

AfinancialassetismeasuredatFVTPLiftheydonotmeetthecriteriaofamortizedcostorFVOCI.Thisincludesallderivativefinancialassets.TheCorporationmay,atinitialrecognition,irrevocablydesignateafinancialassetasmeasuredatFVTPLifdoingsoeliminatesorsignificantlyreducesameasurementorrecognitioninconsistencythatwould otherwise arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases. Financial assets included within FVTPL should be measuredatfairvaluewithallchangesrecordedthroughprofitorloss.TheCorporationhasclassifiedCashasFVTPL.

iv) Other liabilities

Otherfinancialliabilitiesarerecognizedinitiallyatfairvalueplusanydirectlyattributabletransactioncosts.Subsequenttoinitialrecognitionthesefinancialliabilitiesaremeasuredatamortizedcostusingtheeffectiveinterestmethod.Uponderecognition,allgainsandlossesarealsorecognizedinprofitorloss.

4. RevenueMarch 31

2019March 31

2018Water sales and treatment

Potable water supply $ 23,267 $ 22,587

Non-potable water supply 21,874 21,597

Wastewater treatment 624 632

45,765 44,816

Services

Certifiedoperations&maintenance 2,321 1,803

Project management 709 834

Northern project management 867 701

Operator training 753 707

Leak detection 7 17

Remote monitoring 32 28

4,689 4,090

Other

Amortization of customer contributions 6,035 5,944

Amortization of government grants – capital related 326 269

Miscellaneous revenue 475 1,742

6,836 7,955

$ 57,290 $ 56,861

5. Finance income and expenses

6. CashCashconsistsofcashavailableforcurrentpurposesandrestrictedusecash.Restrictedusecashisonlyavailableforaspecificcapitalprojectasitrelatestoaninfrastructure deposit agreement and will be drawn upon as actual expenses are incurred.

7. Trade and other receivables

March 31 2019

March 31 2018

Finance income

Debt retirement fund earnings $ 326 $ 316

Otherfinanceincome 42 18

368 334

Finance expenses

Interest expense on short-term debt 53 95

Interest expense on long-term debt 2,437 2,273

Amortization of discount and commissions 7 5

Realized losses on redemption of debt retirement funds — 91

Unwindingofdiscountonprovisions 51 64

Other interest expense 2 (10)

Borrowing costs capitalized to qualifying assets (215) (107)

2,335 2,411

Netfinanceexpense $ (1,967) $ (2,077)

Interest capitalization rate 0.80% 0.50%

March 31 2019

March 31 2018

Cash available for current purposes $ 2,046 $ 6,758

March 31 2019

March 31 2018

Trade receivables $ 5,295 $ 5,515

Accrued receivables 2,372 4,309

Other receivables 6 5

7,673 9,829

Allowance for doubtful accounts (70) (68)

$ 7,603 $ 9,761

Notes to the Financial StatementsMarch 31, 2019(thousands of dollars)

4. Revenue (continued)n) Financial instruments (continued)

Notes to the Financial StatementsMarch 31, 2019(thousands of dollars)

86 87

The Corporation’s exposure to credit risks and impairment losses related to trade and other receivables is disclosed in Note 22.

8. Prepaid expenses and inventories

9. Investment — debt retirement fundsUnderconditionsattachedtotheCanadaPensionPlanInvestmentBoardlong-termdebtissuesfromtheProvinceofSaskatchewan’sGeneralRevenueFund(GRF),theCorporation is required (on an annual basis) to invest an amount at least equal to one per cent of the related outstanding debt. The investments, referred to as debt retirement funds, are administered by Saskatchewan’s Ministry of Finance. The investments in debt retirement funds are held by the Province of Saskatchewan. The yield on the investments was 4.9 per cent for the year ended March 31, 2019 (2.7 per cent for the year ended March 31, 2018). The changes in the carrying amount of debt retirement funds are as follows:

March 31 2019

March 31 2018

Expected credit losses, opening balance $ 68 $ 75

Recognition of expected credit losses under IFRS 9 — (6)

Recoveries — (4)

Provision adjustments 2 3

Expected credit losses, ending balance $ 70 $ 68

March 31 2019

March 31 2018

Prepaid expenses $ 398 $ 390

Inventories 493 662

$ 891 $ 1,052

March 31 2019

March 31 2018

Debt retirement funds, beginning of year $ 12,387 $ 16,502

Installments 1,991 1,621

Redemptions — (6,231)

Earnings 326 316

Change in fair value of debt retirement funds 353 179

Debt retirement funds, end of year $ 15,057 $ 12,387

Debtretirementfundinstallmentsdueineachofthenextfiveyearsareasfollows:

2019/20 $ 668

2020/21 668

2021/22 629

2022/23 629

2023/24 608

$ 3,202

10. Property, plant and equipment

At March 31, 2019 the Corporation had property, plant and equipment that was fully depreciated and still in use with a cost of $24,740 (March 31, 2018 - $21,959).

For the year ended March 31, 2019, capitalized borrowing costs related to the acquisition of land and construction of new assets amounted to $215 (March 31, 2018 - $107), with a capitalization rate of 0.8% (2018 - 0.5%).

During the year ended March 31, 2019 there were no additions to Water Facility to operate certain previously impaired cost generating units, resulting in an impairment expense of $0 (March 31, 2018 - $48).

There was no impairment recovery during the year ended March 31, 2019. During the year ended March 31, 2018 contracts relating to certain previously impaired assets were renegotiated and was therefore considered to be an event that impacted the assessment. The Corporation reassessed the affected assets based on the renegotiated contract and determined that the impairment was no longer appropriate, resulting in an impairment recovery of $531.

DuringtheyearendedMarch31,2019theCorporationmadethedecisiontosellanoffice/shopbuildingthatwasutilizedbyouroperationsdepartmentwithabookvalue of $315. The decision to sell was made as the building no longer met our operational needs. All of the facts required to classify the asset as held for sale were met during the year with an arms length sale transaction agreed to and taking place in April, 2019. As such the asset was moved from Buildings into Held for Sale during the yearandremainsclassifiedassuchatMarch31,2019.

Buildings Water Facilities

Maintenance & Office

EquipmentAssets under Construction Land Held for Sale Total

Cost

Balance at March 31, 2017 $ 3,028 $ 388,724 $ 5,800 $ 19,696 $ 1,729 $ — $ 418,977

Additions 9 (6) 217 23,922 — — 24,142

Transfers 351 21,319 1,133 (22,803) — — —

Disposals (914) (126) (140) — — — (1,183)

Balance at March 31, 2018 2,474 409,911 7,010 20,815 1,726 — 441,936

Additions 37 64 274 24,003 — — 24,378

Transfers (359) 12,615 13 (12,690) — 421 —

Disposals — (388) (375) (3) — — (766)

Balance at March 31, 2019 $ 2,152 $ 422,202 $ 6,922 $ 32,125 $ 1,726 $ 421 $ 465,548

Depreciation and impairment losses

Balance at March 31, 2017 $ 2,063 $ 103,397 $ 4,033 $ — $ — $ — $ 109,493

Depreciation 106 11,320 607 — — — 12,033

Impairment recovery — (531) — — — — (531)

Impairment of assets — 48 — — — — 48

Disposals (745) (126) (87) — — — (958)

Balance at March 31, 2018 1,424 114,108 4,553 — — — 120,085

Depreciation 87 11,637 569 — — — 12,293

Transfers (106) — — — — 106 —

Disposals — (369) (223) — — — (592)

Balance at March 31, 2019 $ 1,405 $ 125,376 $ 4,899 $ — $ — $ 106 $ 131,786

Carrying amounts

Balance at March 31, 2018 $ 1,050 $ 295,803 $ 2,457 $ 20,815 $ 1,726 $ — $ 321,851

Balance at March 31, 2019 $ 747 $ 296,826 $ 2,023 $ 32,125 $ 1,726 $ 315 $ 333,762

Notes to the Financial StatementsMarch 31, 2019(thousands of dollars)

7. Trade and other receivables (continued)

Notes to the Financial StatementsMarch 31, 2019(thousands of dollars)

88 89

11. Trade and other payables

The Corporation’s exposure to liquidity risk related to trade and other payables is disclosed in Note 22.

12. Notes payable

By Order-in-Council 171/2014, SaskWater is authorized to borrow up to $30 million (March 31, 2018 - $30 million) by way of temporary loans from the Province of Saskatchewan’sGeneralRevenueFund(GRF).

The Corporation’s exposure to interest rate and liquidity risk related to notes payable is disclosed in Note 22.

13. Dividends payable

As a subsidiary of CIC, the Corporation declares and remits dividends accordingly.

March 31 2019

March 31 2018

Trade payables $ 3,790 $ 2,699

Interest payable 611 508

Other payables 5,889 4,425

$ 10,290 $ 7,632

March 31 2019

March 31 2018

Amount outstanding $ — $ 5,000

Interest rate N/A 1 .168%

Due date N/A 2-Apr-18

March 31 2019

March 31 2018

Balance, beginning of the year $ 664 $ 440

Dividends declared 3,745 2,019

Payments remitted (1,900) (1,795)

Balance, end of the year $ 2,509 $ 664

14. Deferred revenue and infrastructure deposits

15. Provisions

TheCorporationhadanonerouscontractrelatedtoapotablesystematthebeginningoftheyear.ThesystemhasasignificantcontractineffectuntilDecember31,2022. SaskWater evaluates the system’s provision on an annual bases and the changes to the provision were related to system performance that was different than anticipated.

March 31 2019

March 31 2018

Deferred revenue

Balance, beginning of the year $ 203,167 $ 196,234

Net deferred revenue additions 686 11,373

Transferred from infrastructure deposits — 1,773

Amortization of deferred revenue (6,361) (6,213)

197,492 203,167

Less: Current portion of deferred revenue (6,359) (6,339)

Non-current balance, end of the year $ 191,133 $ 196,828

March 31 2019

March 31 2018

Infrastructure deposits

Balance, beginning of the year $ — $ 4,140

Customer contributions received/receivable — 574

Refund of deposits — (2,271)

Transferred to deferred revenue — (1,773)

Recognized as project management revenue — (670)

Balance, end of the year $ — $ —

March 31 2019

March 31 2018

Balance, beginning of the year $ 808 $ 1,254

Provisions removed during the year — (360)

Settlements during the year (192) (196)

Provisions (reversed) increased during the year (16) 46

Unwindingofthediscountonprovisions 51 64

651 808

Less: Current portion of provisions (190) (190)

Non-current balance, end of the year $ 461 $ 618

Notes to the Financial StatementsMarch 31, 2019(thousands of dollars)

Notes to the Financial StatementsMarch 31, 2019(thousands of dollars)

90 91

16. Long-term debt

Long-termdebtrepaymentsineachofthenextfiveyearsareasfollows:

By Order-in-Council 171/2014, SaskWater is authorized to borrow up to $100 million (March 31, 2018 - $100 million). All of the above loans are payable to the Province of Saskatchewan’sGRFwithinterestpayablesemi-annually.TheCorporation’sexposuretointerestrateandliquidityriskrelatedtolong-termdebtisdisclosedinNote22.

UnderconditionsattachedtocertainadvancesfromtheProvinceofSaskatchewantheCorporationisrequiredtopayannually,intodebtretirementfundsadministeredby the Saskatchewan Ministry of Finance, amounts at least equal to 1 per cent of certain debt outstanding (Note 9).

March 31, 2019 March 31, 2018

Date of Maturity

Coupon Rate

(per cent)

Effective Rate

(per cent)Outstanding

AmountEffective

Rate (per cent)

Outstanding Amount

01-Sep-19 4.16 4.16 $ 4,500 4.16 $ 4,500

01-Mar-20 4.14 4.14 5,093 4.14 5,093

01-Dec-21 2.96 2.96 3,900 2.96 3,900

01-Mar-24 5.32 5.32 2,100 5.32 2,100

10-Apr-25 5.05 5.05 1,700 5.05 1,700

02-Jun-27 2.65 2.753 5,000 2.753 5,000

03-Dec-30 4.32 4.32 9,000 4.32 9,000

12-Dec-35 3.29 3.29 2,407 3.29 2,407

10-Jan-36 3.18 3.18 2,400 3.18 2,400

03-Nov-36 2.94 2.94 4,575 2.94 4,575

10-Apr-37 3.20 3.20 2,800 3.20 2,800

11-May-37 3.02 3.02 2,600 3.02 2,600

03-Mar-38 3.15 3.15 5,000 3.15 5,000

01-Mar-41 3.29 3.29 10,718 3.29 10,718

01-Mar-41 3.16 3.16 4,600 3.16 4,600

02-Jun-50 3.10 3.10 10,000 N/A —

76,393 66,393

Less: Current portion of long-term debt (9,593) —

$ 66,800 $ 66,393

2019/20 $ 9,593

2020/21 —

2021/22 3,900

2022/23 —

2023/24 2,100

Thereafter 60,800

$ 76,393

17. Employee benefitsa ) Defined benefit retiring allowance plan

Theamountsrelatedtothedefinedbenefitretiringallowanceplanforexecutive,managementemployeesandmembersoftheUNIFORUnionareasfollows:

AnactuarialassessmentisrequiredtobecompletedeachcalendaryearasatDecember31inconjunctionwithreportingrequirementsoftheplan.ThesignificantactuarialassumptionsadoptedinmeasuringtheCorporation’sannualaccruedbenefitliabilityare:

The discount rate was based on the yield curve for Saskatchewan provincial bonds whose duration approximates the duration of the liabilities.

b) Defined contribution pension plan

TheCorporation’semployeesparticipatedinthePublicEmployeesPensionPlan(thePlan),adefinedcontributionpensionplan.TheCorporation’scontributionstothePlan include making regular payments into the Plan equal to 160 per cent of the required amounts contributed by employees for current service. The total amount paid to the Plan for the year ended March 31, 2018 was $842 (March 31, 2018 - $839).

18. Equity advance and capital disclosureTheCorporationdoesnothavesharecapital.However,theCorporationhasreceivedadvancesfromCICtoformitsequitycapitalization.Theadvancesreflectanequityinvestment in the Corporation by CIC.

TheCorporation’sdebtmanagementplanisbuiltonthegoalofensuringthecapacitytomeetlong-termobligationsandensuringfinancialhealth,whileachievingthegrowth plans of the Corporation.

As a Crown corporation, SaskWater receives its long-term capital funding primarily from the Saskatchewan Ministry of Finance. SaskWater also has access to a $30 million line of credit.

The Corporation’s capital consists of notes payable, long-term debt and equity, less debt retirement funds.

The Corporation has complied with all externally imposed restrictions on its debt for the year ended March 31, 2019.

March 31 2019

March 31 2018

Balance, beginning of year $ 524 $ 479

Expenses 34 (6)

Actuarial (gains) losses (10) 51

Balance, end of year $ 548 $ 524

Discount rate 3.10% 2.90%

Inflationrate 2.25% 2.25%

Average remaining service life 11 .9 years 12.1 years

March 31 2019

March 31 2018

Grosslong-termdebt $ 76,393 $ 66,393

Notes payable — 5,000

Debt retirement funds (15,057) (12,387)

Net debt 61,336 59,006

Total equity 71,770 67,662

Capitalization $ 133,106 $ 126,668

Debt ratio 46.1% 46.6%

Notes to the Financial StatementsMarch 31, 2019(thousands of dollars)

Notes to the Financial StatementsMarch 31, 2019(thousands of dollars)

92 93

19. Operating leasesNon-cancellable operating lease rentals are payable as follows:

TheCorporationleasesanumberofvehicles,officeequipmentandofficefacilitiesunderoperatingleases.DuringtheyearendedMarch31,2019anamountof$1,111(year ended March 31, 2018 - $1,096) was recognized as an expense in net income with respect to operating leases.

20. Commitments and contingenciesa) Contractual commitments

As of March 31, 2019, the Corporation has outstanding commitments of $10,884 (March 31, 2018 - $23,126) for construction contracts and consulting agreements primarily relating to assets under construction and other service contracts.

b) Litigation

The Corporation has provided, in its accounts, for any known claims from lawsuits or other legal proceedings for which there is material risk of liability to the Corporation in accordance with management’s best estimates and the advice received from legal counsel. The Corporation intends to account for any differences which may arise between amounts provided and amounts expended in the period in which the claims are resolved.

21. Related party transactionsa) Related parties

IncludedinthesefinancialstatementsaretransactionswithvariousSaskatchewanCrowncorporations,ministries,agencies,boardsandcommissionsrelatedtotheCorporationbyvirtueofcommoncontrolbytheGovernmentofSaskatchewanandnon-CrowncorporationsandenterprisessubjecttojointcontrolandsignificantinfluencebytheGovernmentofSaskatchewan(collectivelyreferredtoas“relatedparties”).TheCorporationhaselectedtotakepartialexemptionunderIAS24Related Party Disclosures which allows government related entities to limit the extent of disclosures about related party transactions with government and other government related entities.

Routine operating transactions with related parties are settled at prevailing market prices under normal trade terms. The Corporation also pays Saskatchewan provincial sales tax on all its taxable purchases to the Saskatchewan Ministry of Finance. Taxes paid are recorded as part of the cost of those purchases.

b) Compensation of key management personnel

Key management personnel include the President and Vice President positions. The compensation related to key management for employee services is shown below:

22. Financial instruments and risk managementa) Fair values

Fair values are the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.Fairvaluesareestimatesusingpresentvalueandothervaluationtechniqueswhicharesignificantlyaffectedbytheassumptionsusedconcerningtheamountandtimingofestimatedfuturecashflowsanddiscountratesthatreflectvaryingdegreesofrisk.Therefore,duetotheuseofjudgmentandfuture-orientedinformation,aggregate fair value amounts should not be interpreted as being realizable in an immediate settlement of the instruments.

March 31 2019

March 31 2018

Less than one year $ 813 $ 688

Betweenoneandfiveyears 2,416 749

Morethanfiveyears 944 —

$ 4,173 $ 1,437

March 31 2019

March 31 2018

Salaries,wagesandshort-termemployeebenefits $ 644 $ 627

Post-employmentbenefits 45 45

$ 689 $ 672

Thefollowingsummarizestheclassification,carryingamountsandfairvaluesoftheCorporation’sfinancialinstruments:

1Classificationdetailsareasfollows: FVTPL-Fairvaluethroughprofitandloss

AC - Amortized cost FVOCI - Fair value through other comprehensive income (loss) OL - Other liabilities at amortized cost

2 Fair values are determined using a fair value hierarchy as follows: Level 1 – Where quoted prices are readily available from an active market.

Level 2 – Valuation model not using quoted prices, but still using predominantly observable market inputs, such as market interest rates. Level 3 – Valuation for the asset or liability that are not based on observable market data. Not applicable (N/A) – Financial instruments that are carried at values which approximate fair value.

b) Market risk

Marketriskistheriskthatthefairvalueorfuturecashflowsofafinancialinstrumentwillfluctuatebecauseofchangesinmarketprice.Debtretirementfundsaremonies set aside to retire outstanding debt upon maturity. The Corporation is required to pay annually into debt retirement funds which are held and invested by the SaskatchewanMinistryofFinance.Theimpactoffluctuationsinmarketpricesrelatedtotheseinvestmentswillnotbesignificant,thereforemanagementhasnotprovided a sensitivity analysis of the impact.

The Corporation is exposed to interest rate risk on the maturity of its long-term debt. However, in the current low interest rate environment, these risks are considered low.Interestrateriskontheseexpectedfutureborrowingsaremanaged,basedontherefinancingneedsoftheCorporation,usingderivativefinancialinstrumentswhendeemedappropriate.TheCorporationhadnoderivativefinancialinstrumentsinplacetooffsetinterestrateriskasofMarch31,2019andMarch31,2018.Thechangeinratewouldhavenoimpactonnetincomeduetoclassificationoflong-termdebtasotherliabilities.

March 31, 2019 Asset (Liability)

March 31, 2018 Asset (Liability)

Financial instruments Classification1 Level2 Carrying Amount Fair Value Carrying Amount Fair Value

Financial assets

Cash FVTPL 1 $ 2,046 $ 2,046 $ 6,758 $ 6,758

Trade and other receivables AC N/A 7,603 7,603 9,761 9,761

Debt retirement funds FVOCI 2 15,057 15,057 12,387 12,387

Financial liabilities

Trade and other payables OL N/A (10,290) (10,290) (7,632) (7,632)

Notes payable OL N/A — — (5,000) (5,000)

Dividends payable OL N/A (2,509) (2,509) (664) (664)

Infrastructure deposits OL N/A — — — —

Long-term debt OL 2 (76,393) (81,658) (66,393) (69,551)

Notes to the Financial StatementsMarch 31, 2019(thousands of dollars)

Notes to the Financial StatementsMarch 31, 2019(thousands of dollars)

22. Financial instruments and risk management (continued)b) Market risk (continued)

94 95

c) Liquidity risk

LiquidityriskistheriskthattheCorporationisunabletomeetitsfinancialcommitmentsastheybecomedue.SaskWatermanagestheCorporation’scashresourcesbasedonfinancialforecastsandanticipatedcashflows.ThefollowingsummarizesthecontractualmaturitiesoftheCorporation’sfinancialliabilities:

Futurecashflowsfromoperationsandavailabilityunderexistingcreditfacilitieswillbeadequatetosupportthesefinancialliabilities.

d) Credit risk

Creditriskistheriskthatonepartytoatransactionwillfailtodischargeanobligationandcausetheotherpartytoincurafinancialloss.Concentrationsofcreditriskrelate to groups of customers or counterparties that have similar economic or industry characteristics that cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions.

TheCorporationisnotexposedtoasignificantconcentrationofcreditrisk.ThemaximumcreditrisktowhichtheCorporationisexposedasatthefollowingdates,islimitedtothefairvalueofthefinancialassetsrecognizedasfollows:

March 31, 20196 months

or less7 – 12

monthsSubsequent

1 yearSubsequent

3 – 5 yearsMore than

5 years

Trade and other payables $ 10,290 $ — $ — $ — $ —

Notes payable — — — — —

Dividends payable 2,509 — — — —

Long-term debt 5,828 6,327 2,258 12,543 88,884

$ 18,627 $ 6,327 $ 2,258 $ 12,543 $ 88,884

March 31, 20186 months

or less7 – 12

monthsSubsequent

1 yearSubsequent

3 – 5 yearsMore than

5 years

Trade and other payables $ 7,632 $ — $ — $ — $ —

Notes payable 5,000 — — — —

Dividends payable 664 — — — —

Long-term debt 1,173 1,173 11 ,845 9,628 74,602

$ 14,469 $ 1,173 $ 11,845 $ 9,628 $ 74,602

March 31 2019

March 31 2018

Cash $ 2,046 $ 6,758

Trade receivables

Current 4,902 5,273

31 – 60 days 112 70

61 – 90 days 190 —

91 – 180 days 17 94

Over 180 days 74 78

Subtotal 5,295 5,515

Allowance (70) (68)

5,225 5,447

Accrued and other receivables 2,378 4,314

Debt retirement funds 15,057 12,387

$ 24,706 $ 28,906

Provisions for credit losses are maintained and regularly reviewed by the Corporation based on an lifetime expected credit losses. Historically, the Corporation has notwritten-offasignificantportionofitsaccountsreceivablebalances.AtMarch31,2019,theCorporationhadabalanceof$70(March31,2018-$68)recordedintheexpected credit losses account.

Debt retirement funds are on deposit with, and being administered by, the Saskatchewan Ministry of Finance. At March 31, 2019, the Ministry has invested these funds primarily in Provincial government and Federal government bonds with varying maturities to coincide with related long-term debt maturities and are managed based onthismaturityprofileandmarketconditions.Assuch,therelatedcreditriskassociatedwiththeseinvestmentsasatMarch31,2019,isconsideredlow.

Notes to the Financial StatementsMarch 31, 2019(thousands of dollars)

22. Financial instruments and risk management (continued) d) Credit risk (continued)

Notes to the Financial StatementsMarch 31, 2019(thousands of dollars)

22. Financial instruments and risk management (continued)

Corporate governance is generally accepted as the set of processes, customs, policies, laws and institutions that affect how a corporation is directed, administered or controlled. Corporate governance includes the relationships among the stakeholders and the goals for which the corporation is governed. Effective corporate governance results in a well-run, high-performing and transparent organization, accountable to the public it serves. The shareholder, board of directors and management are instrumental in achieving effective corporate governance.

A VISION FOR ALL CROWN CORPORATIONS

SaskWater shares in the vision that the provincial government has defined for the Crown sector. This vision is for “a secure and prosperous Saskatchewan, leading the country in economic and population growth, while providing a high quality of life for all .”

CROWN CORPORATION STRUCTURE

SaskWater is a statutory Crown corporation governed by The Saskatchewan Water Corporation Act, 2002, and is subject to the provisions of The Crown Corporations Act, 1993.

Crown Investments Corporation of Saskatchewan (CIC) is the Province of Saskatchewan’s holding company for its commercial Crown corporations, including SaskWater, and has authority to establish direction for SaskWater related to certain matters set out in legislation.

Through the Chair, who is an independent director, the Board of Directors is accountable to the Minister Responsible for SaskWater.

05 CORPORATE GOVERNANCE

98 99

ROLES AND RESPONSIBILITIES

The Government of Saskatchewan represents the public’s interests and sets the vision for the Crown sector. Government approves and rescinds Crown Board appointments.

The CIC Board sets strategic direction for the Crown sector, sets public policy expectations, approves performance standards, allocates capital, and monitors and evaluates the Crown corporations’ performance throughout the year.

The Minister Responsible for SaskWater keeps informed of Crown activities and functions as the communication channel between the Crown corporation and its stakeholders, including government, the legislature and the public.

CIC develops policy on Crown corporations and communicates and monitors strategic shareholder direction and policy to the corporation.

SaskWater’s Board oversees the overall direction of the business activities of the corporation to achieve the performance targets and is responsible for the approval and implementation of the corporation’s strategic plan and performance plan.

DIRECTION TO THE CROWN SECTOR

The CIC Board provides direction to SaskWater that is reflected in our strategic, business and operational plans. CIC priorities include:

• customer focus to provide the best possible service that is high quality, accessible and affordable

• infrastructure for economic development in Saskatchewan

• development of an effective workforce while striving to contain growth in the workforce

• financial and fiscal sustainability

CIC also provides direction to SaskWater for such things as programs, reporting processes and procedures, policies and administrative or legislative matters.

Source: Crown Sector Strategic Plan

BOARD OF DIRECTORS

The SaskWater Board of Directors terms of reference state that the Board will have a minimum of three (3) members and a maximum of ten (10). As of November 22, 2018, the SaskWater Board consisted of nine (9) independent directors. All are appointed for a set term by the Lieutenant Governor in Council , who also designates the Chair and Vice Chair. Subject to applicable legislation, directors are appointed for a fixed term and their appointments can be renewed at expiry.

RESPONSIBILITIES AND DUTIES

The Board is responsible for SaskWater’s stewardship while fostering success consistent with SaskWater’s mandate. The Board works with management to oversee corporate operations, including:

• setting corporate direction

• guiding strategic planning processes

• executing performance evaluations

• annual and quarterly monitoring and reporting functions

• assisting in business plan development and approval

• monitoring processes and systems used to achieve sustainable operations

The SaskWater Board of Directors met nine (9) times in 2018–19.

COMMITTEES

In 2018–19, the Board had two (2) standing committees to undertake detailed reviews and provide in-depth supervision in key areas of responsibility.

The Committees of the Board were:

• Audit and Finance, and Governance and Corporate Responsibility

Audit and Finance Committee – held five (5) meetings in 2018–19

Current Committee Members (appointed to committee on November 21 , 2018): Michael Gering (Chair), Alison Green, Patricia Hughes, Richard Porter, Silvia Martini (ex-officio).

The Audit and Finance Committee helps the Board fulfill its financial accountability by:

• overseeing the corporation’s budget, financial operations and results

• reviewing internal controls established by management and the Board

• participating in internal and external audit processes

• monitoring the adequacy and condition of capital assets

• reviewing and making recommendations on capital activities

• ensuring appropriate systems are in place to identify and manage risk

Governance and Corporate Responsibility Committee – held four (4) meetings in 2018–19

Current Committee Members (appointed to committee on November 21 , 2018): Linda Jijian (Chair), Bill Hutchinson, Jeff Richards, Glenda Whalen, Silvia Martini (ex-officio).

The Governance and Corporate Responsibility Committee reviews and maintains SaskWater’s governance practices and oversees the Board’s nominating and governance activities, including:

• evaluating the performance of Board committees, Board Chair, individual directors and the President/CEO

• recommending Board and Committee structure, composition and mandate

• ensuring Board orientation and opportunities for professional development

• articulating the roles and responsibilities of the Board

• overseeing compensation policies and collective bargaining mandate

GOVERNANCE PRACTICES

The SaskWater Board has implemented a comprehensive set of governance practices and is committed to clear disclosure of its governance practices in accordance with current best practice disclosure standards.

On June 30, 2005, the Canadian Securities Administrators (CSA) National Policy 58-201 on Corporate Governance Guidelines and National Instrument 58-101 on Governance Disclosure Rules came into effect. The CSA standards supersede the Toronto Stock Exchange Corporate Governance Guidelines, which the Board used previously to assess its practices. The Governance and Social Corporate Responsibility Committee has reviewed the Guidelines with a view of adapting the Board’s governance practices to the guidelines, where effective and beneficial. Although SaskWater is not required to comply with the CSA governance guidelines, the corporation has used them to benchmark its corporate governance practices in the following section.

100 101

Chair, Silvia MartiniSaskatoonSilvia Martini is Vice President of Interlink Research, Inc., and Principal of Martini Consulting. With over 35 years of business ownership, entrepreneurial and leadership success, Silvia brings to the Board a courageous and strategic mindset, with decision-making supported by critical thinking. She is known for value-based leadership, and engaging the varied competencies and diverse strengths of the Board and staff within a collaborative culture and clear accountability.

She has contributed her leadership strengths and competencies to community through decades of service leadership with, and on boards of directors, such as the Greater Saskatoon Chamber of Commerce, The Word On The Street Festival in Saskatoon and boards addressing change and challenge. Described as a “thought leader,” Silvia is a staunch advocate for Saskatchewan’s leadership potential in sustainable economic and community development. She has celebrated with her teams a wide range of achievements, creating new platforms from which success continues to this day.

Silvia is a graduate of the Edwards School of Business (EBAC), and obtained her Chartered Director (C. Dir.) designation from The Directors College. Over the years, Silvia has been the recipient of a number of awards, including the Raj Manek 2016 Above and Beyond Award.

Prior to her appointment as Chair in 2017, Silvia served as Vice Chair of the SaskWater Board and Chair of the Governance and Corporate Responsibility Committee.

Vice Chair, Michael GeringSwift CurrentMichael Gering is President and CEO of Diamond Energy Services in Swift Current, a company he founded in 1996. He has worked in the oilfield industry since 1985. He is also a member of the RM of Swift Current Council.

Michael and his wife are long-time residents of Swift Current. Over the years, he has supported his community with involvement in Swift Current Minor Hockey and the South Saskatchewan Female Hockey League, as a member of the Great Plains College Board of Directors as well as participation on numerous other community and fundraising committees. Michael currently sits on the CAODC Board of Directors.

Michael completed the Johnson and Shoyama Board Governance Program. He currently serves as Chair of the SaskWater Board Audit and Finance Committee.

Glenda WhalenQu’AppelleGlenda Whalen is a small business owner in Saskatchewan. After many years working in the field of education, she pursued her Bachelor of Fine Arts degree at the University of Regina, graduating with distinction, and was employed as a contracted designer.

Serving her community is a high priority for Glenda. She is currently serving as the Vice Chair for the Qu’Appelle Library Board and Lioness Club. She also actively volunteered with the James Hamblin School Council, Qu’Appelle Soccer Association (founding member), Qu’Appelle Lioness Club, Indian Head

Broncs Football and Chiefs Hockey. Glenda and her husband are owners and operators of a cattle and grain farm in the RM of South Qu’Appelle.

Glenda obtained her Chartered Director (C. Dir.) designation from The Directors College.

Patricia HughesPrince AlbertPatricia Hughes works for Transwest Air, overseeing Business Development and Marketing. She also continues to farm with her family in Tisdale.

Patricia and her husband Brad reside in Prince Albert. They have two grown sons. Logan is pursuing his education in Business Management. Brett is apprenticing as an Agriculture Technician.

Patricia currently serves as Chair of Community Futures Saskatchewan and is a Director with Prince Albert Community Futures Board. She is also a Director and Secretary for Pan West Community Futures.

Patricia continues to be very active in her community with many fundraising initiatives that support local organizations.

Richard PorterWarmanRichard Porter is the owner and CEO of Shellbrook Crushing, Shellbrook Trucking and several related businesses. Richard has gained a wealth of knowledge and experience as an employer dealing with large staffs and government contracts. He has a good working knowledge of both sides, as employer and employee.

BOARD OF DIRECTORS

Silvia Martini Michael Gering

Community involvement is a large part of Richard’s life and over the years he has been very active with the Kinsmen Club, Telemiracle and as Chair of the Parkland School Division Board. He was a councillor in the RM of Canwood for 10 years and served as Reeve for four years.

Richard has sat on and chaired several committees, including the Fundraising Committee for the Parkland Integrated Health Centre in Shellbrook.

Bill HutchinsonReginaBill Hutchinson’s career in the private and public sectors spans four decades. Highlights include building a successful architectural practice, four terms as a member of Regina City Council and two terms as a member of Saskatchewan’s Legislative Assembly.

As a City Councillor, Bill chaired the Regina Planning Commission and served on the Regina Regional Economic Development Authority, the Board of Police Commissioners and the Saskatchewan Urban Municipalities Association. While an MLA, he was Minister of Municipal Affairs, Minister of First Nations and Metis Relations and Minister of Tourism, Parks, Culture and Sport.

Volunteer activity has included service on more than 20 community and provincial boards, notably SIAST (now Saskatchewan Polytechnic), SaskBuilds and the University of Regina Senate.

Linda JijianReginaLinda Jijian is the Manager of Governance and Compliance with SaskCentral. Her experience includes research and development, wealth

management, workshop facilitation and strategic planning. Her current role supports credit unions in meeting their federal and provincial legislative and regulatory obligations in the areas of governance and compliance. She also assumes the role of provincial Ombudsman as part of the provincial government’s consumer protection directive.

Linda received her ProDir Certification through the Johnson Shoyama Graduate School of Public Policy and Brown Governance, and has also completed the academic requirements for the Directors Education Program offered by the Institute of Corporate Directors (ICD).

Linda has served on various Boards and has chaired various committees. She currently serves as Chair of the SaskWater Board Governance and Corporate Responsibility Committee.

Jeff RichardsWeyburnJeff Richards is currently the Vice President of Strategic Development at Southeast College. After more than a decade as a small business owner, he has spent the last 10 years in senior leadership roles. Most recently he was elected to Weyburn City Council and currently serves on the Police Commission and the Regional Planning Commission.

Jeff and his wife raised their family in Weyburn and are strong supporters of community and the arts. He has served as a Director on a number of organizations, including the Weyburn Credit Union, the Weyburn Chamber of Commerce and Estevan Chamber of Commerce, as well as Chairing the Weyburn and District United Way and the Weyburn Regional Planning Commission.

Over the years, Jeff has invested in himself through numerous professional development programs, including his recent graduation from the Credit Union Director Achievement (CUDA) Program.

Alison GreenReginaAlison Green joined SaskWater’s Board of Directors in November 2018. Prior to that, she was a Director of the SOCO Board and Chair of the Audit and Finance Committee.

Alison is a Regina native, and completed her Bachelor of Administration degree and CMA designation (now CPA, CMA) at the University of Regina. She also has a Certified Financial Planner designation (CFP) and obtained her Chartered Director (C. Dir.) designation in 2015 from The Directors College.

Alison has a background in finance, having worked in the energy sector, banking industry and public accounting. She is a tax specialist at Saveway Tax Services in Regina where she enjoys providing tax and accounting services to individuals, families and business clients.

In her volunteer life, Alison has been a Rotarian for over 20 years and was a Director of the Rotary Club of Regina. She has served on the National Board and Division Board of CNIB, and has recently been an Ambassador with the Regina Chamber of Commerce.

Glenda Whalen Patricia Hughes Richard Porter Bill Hutchinson Linda Jijian

Missing:

Jeff Richards

Alison Green

102 103

CSA CORPORATE GOVERNANCE POLICY, NP 58-201, AND DISCLOSURE INSTRUMENT, NI 58-101F1 (SUMMARY)

COMMENTS AND DISCUSSION DOES SASKWATER ALIGN?

COMPOSITION OF THE BOARD

NP 58-201, section 3.1

3.1 The board should have a majority of independent directors.

All directors on the SaskWater Board (9 out of 9) are independent. Yes

NI 58-101F1, sections 1(a) to (d)

1 (a) Disclose the identity of directors whoareindependent;

(b) Disclose the identity of directors who are not independent and the basisforthatdetermination;

(c) Disclose whether the majority of directorsareindependent;and

(d) Disclose whether a director is a director of any other issuer that is a reporting issuer.

Silvia Martini, Chair: INDEPENDENT – Vice President of Interlink Research, Inc.

Don Atchison: INDEPENDENT1 – Businessman

Michael Gering: INDEPENDENT – President – Diamond Energy Services Inc.

Alison Green: Independent2

– Tax Accountant

Patricia Hughes: INDEPENDENT –BusinessDevelopmentOfficer,TransWest

Bill Hutchinson: INDEPENDENT – Consultant

Linda Jijian: INDEPENDENT –Manager,GovernanceandCompliance,SaskCentral

Richard Porter: INDEPENDENT – Retired

Jeff Richards: INDEPENDENT3 – Vice President Strategic Development, Southeast College

Gwyn Tremblay : INDEPENDENT4 –ExecutiveDirector,SofiaHouse

Glenda Whalen: INDEPENDENT – Small business owner

ThedeterminationofindependenceismadebytheGovernanceandCorporateSocial Responsibility Committee and is based on an assessment of the requirements in Multilateral Instrument 52-110, Audit Committees.

Section 1(d) does not apply to SaskWater as SaskWater does not have share capital, and is not an issuer.1 Don Atchison was not reappointed to the SaskWater Board 2 AlisonGreenwasappointedtotheBoardNovember22,2018 3 Jeff Richards was appointed to the Board November 22, 2018 4 GwynTremblaywasnotreappointedtotheSaskWaterBoard

Yes

NP 58-201, section 3.2

3.2 The chair of the board should be an independent director who is the effective leader of the board and who ensures that the board’s agenda will enable it to successfully carry out its duties.

The Chair of the Board is an independent director who provides leadership in Board organization, processes, effectiveness and renewal, serves as liaison betweentheBoardandtheshareholderandensuresBoardagendasreflectaneffective balance between the role of the Board and that of management.

Yes

NI 58-101F1, section 1(f)

1 (f) Disclose whether the chair of the boardisanindependentdirector;disclose the identity of the chair and describe the role of the chair.

Silvia Martini is the Chair of the Board and she is an independent director. The Chair reports to the Board and ultimately to the shareholder and is responsible for presiding over meetings of the Board and ensuring that the Board discharges its fiduciaryandlegalresponsibilities.TheChair’sprimarydutiesinclude:

• chairing meetings of the Board and ensuring meetings are properly convened and business is conducted legally

• working with the CEO and the Corporate Secretary to set Board meeting schedules and establish agendas

• monitoring meeting attendance and encouraging full participation by directors at meetings

• communicating with directors between meetings

• taking a lead role in assessing and addressing any concerns related to Board, committee or director performance

• assisting directors to achieve full utilization of individual abilities

• promoting an open and constructive working relationship between senior management and the Board

• working with committee chairs to maintain effective communications and division of responsibilities

• providing advice and counsel to the CEO and senior management

• representing the shareholder’s interests and perspective to management, and representing management’s views to the shareholder

• in conjunction with the CEO, developing productive relationships and representing the Corporation with the shareholder and key stakeholders

Yes

CSA CORPORATE GOVERNANCE POLICY, NP 58-201, AND DISCLOSURE INSTRUMENT, NI 58-101F1 (SUMMARY)

COMMENTS AND DISCUSSION DOES SASKWATER ALIGN?

MEETINGS OF INDEPENDENT DIRECTORS

NP 58-201, section 3.3

3.3 The independent directors should hold regularly scheduled meetings at which non-independent directors and members of management are not present.

As a Standing Agenda item, the Board holds an in-camera session without management present at each regular meeting of the Board. All directors participateinthesessions,exceptwhereadirectorhasaconflictwithanitemunder discussion.

Yes

NI 58-101F1, section 1(e)

1(e) Disclose whether the independent directors hold regularly scheduled meetings at which members of managementarenotpresent;disclose the number of such meetings held in the previous 12 months;ifsuchmeetingsarenotheld, disclose what the board does to facilitate open and candid discussion among independent directors.

Therewerenine(9)Boardmeetingsheldin2018–19,andduringfive(5)regularmeetings, in-camera sessions without management present but including all directors were held.

Board practices that facilitate open and candid discussion and independent judgment by directors include:

• holdingin-camerasessionsofnofixeddurationwheredirectorsareencouraged to raise any issues of concern

• having an independent director as Chair of the Board

• clearly delineating the division of responsibilities between Board and management

• providing for the Board/directors to access external advice

TheBoardissatisfiedthatitsgovernancepracticesfosterfullandopendiscussionand debate, and that it retains the independence of mind to make decisions in the best interests of the Corporation and the shareholder.

Yes

NI 58-101F1, section 1(g)

1 (g) Disclose the attendance record of each director for board meetings held in the most recently completed financialyear.

The Board held nine (9) meetings in 2018–19. The number of Board meetings attended by each director in 2018–19 is set out below.

Yes

Director

Silvia Martini, Chair

Don Atchison1

MichaelGering

AlisonGreen2

Patricia Hughes

Bill Hutchinson

Linda Jijian

Richard Porter

Jeff Richards3

GwynTremblay4,5

GlendaWhalen

Meetings Attended*

7(9)**

5(5)

8(9)

3(3)

7(9)

7(9)

8(9)

7(9)

3(3)

2(3)

8(9)

1 Don Atchison was not reappointed to the SaskWater Board2AlisonGreenwasappointedtotheBoardNovember22,20183 Jeff Richards was appointed to the Board November 22, 20184GwynTremblaywasnotreappointedtotheSaskWaterBoard5GwynTremblaytemporarilyremovedherselffromtheBoardtopursueapoliticalnomination

*For the purposes of this report, members who attended meetings in part were considered to be present.

**Figures in brackets represent the maximum number of meetings for the period in which the individual was a Board member.

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CSA CORPORATE GOVERNANCE POLICY, NP 58-201, AND DISCLOSURE INSTRUMENT, NI 58-101F1 (SUMMARY)

COMMENTS AND DISCUSSION DOES SASKWATER ALIGN?

BOARD MANDATE

NP 58-201, section 3.4

3.4 The board should adopt a written mandate which explicitly acknowledges responsibility for the stewardship of the corporation and responsibility for:

(a) to the extent possible, satisfying itself as to the integrity of the CEO and executive and that they have created a culture of integrity throughout the organization;

(b) adopting a strategic planning process and approving at least annually a strategic plan, which takes into account, among other things, the opportunities andrisksofthebusiness;

(c) identificationoftheprincipalrisks of the corporation’s business and ensuring the implementation of appropriate systemstomanagetheserisks;

(d) succession planning, including appointing, training and monitoring senior management;

(e) adopting a communications policyforthecorporation;

(f) the integrity of the corporation’s internal control and management information systems;and

(g) developing the corporation’s approach to corporate governance, including a set of principles and guidelines specifictothecorporation.

The written mandate should also address measures for receiving feedback from stakeholders (for example, a process for stakeholders to contact independent directors);andtheexpectationsandresponsibilities of directors, including basic duties to attend meetings and review materials in advance.

The Board has written Terms of Reference that contain the majority of the elements required by the Policy. The Terms of Reference outline the Board’s principal duties and responsibilities, including responsibility to function as stewards of the corporation and to:

• provide leadership in setting the Corporation’s long-range strategic direction and annually approve the Corporation’s overall strategic plan

• participate in identifying the principal risks of the business in which the Corporation is engaged and oversee the implementation of appropriate systems to manage the risks

• appoint the CEO, evaluate the performance of senior management and ensure effective succession planning processes

• adopt policies and processes to enable effective communication with the shareholder, stakeholders and the public

• monitor the integrity of the Corporation’s internal control and management information systems

The Board has approved Terms of Reference for directors where the expectations and responsibilities of individual directors are delineated.

SaskWater regularly surveys internal and external stakeholders to obtain feedback about corporate activities. The Chair of the Board participates in a forum established by CIC, which is composed of the chairs of all subsidiary Crown Boards andseniorCICofficials,whereissuesofmutualinterestandconcernareshared.

ElementsofthePolicynotspecificallyidentifiedintheTermsofReferencefortheBoard include (a) and (g). Respecting (a), the Board has established practices that promote a culture of ethical business conduct (see discussion under section 3.8 of NP 58-201). With respect to (g) the Board has delegated responsibility totheGovernanceandCorporateResponsibilityCommitteetooverseetheCorporation’s approach to corporate governance.

Substantial compliance

NI 58-101F1, section 2

2 Disclose the text of the board’s written mandate.

The Board’s principal responsibilities are described above. The text of the Board’s Terms of Reference can be obtained by contacting the Corporate Secretary to the Board.

Yes

POSITION DESCRIPTIONS

NP 58-201, section 3.5

3.5 The board should: develop clear position descriptions for the chair of the board and the chair of eachboardcommittee;togetherwith the CEO, develop a position description for the CEO delineating management’sresponsibilities;develop or approve corporate goals and objectives that the CEO is responsible to meet.

The Board has approved Terms of Reference for the Board, the Chair of the Board, the Chair of each committee, each committee and individual directors and has adopted a Position Description for the CEO. The Terms of Reference outline the key areas of focus for each committee and can be obtained by contacting the Corporate Secretary to the Board.

The CEO’s Position Description sets out the CEO’s primary accountabilities and responsibilities. The Board Terms of Reference address management duties, and a Final Authorization Policy, applicable to monetary and non-monetary matters, sets out those matters that require Board approval and delegates other matters to management.

TheGovernanceandCorporateSocialResponsibilityCommitteeannuallyrecommends performance indicators for the Corporation and personal goals for the CEO that are approved by the Board. The Board annually approves a business plan that includes corporate objectives, priorities and performance indicators. The CEO is responsible to see that the Corporation achieves the business plan and to meet any other targets assigned by the Board.

Yes

CSA CORPORATE GOVERNANCE POLICY, NP 58-201, AND DISCLOSURE INSTRUMENT, NI 58-101F1 (SUMMARY)

COMMENTS AND DISCUSSION DOES SASKWATER ALIGN?

NI 58-101F1, sections 3(a) and (b)

3 (a) Disclose whether the board has developed written position descriptions for the chair of the board and the chair of each board committee and, if not, describe how the board delineates the role and responsibilities of each such position.

(b) Disclose whether the board and CEO have developed a written position description for the CEO.

The Board has developed written position descriptions for the Chair of the Board, the Chair of each committee and the CEO.

Yes

ORIENTATION & CONTINUING EDUCATION

NP 58-201, sections 3.6 and 3.7

3.6 The board should ensure new directors receive comprehensive orientation and fully understand the role of the board and committees, the contribution individual directors are expected to make and the nature and operation of the business.

3.7 The board should provide continuing education opportunities for all directors to enhance their skills and abilities and ensure their knowledge of the corporation’s business is current.

Management provides new directors with a comprehensive orientation to the business and the industry. CIC delivers a training program that focuses on the skills that directors need to do their jobs, effective board processes and best practices in corporate governance. Other development opportunities made available to directors are described below.

Yes

NI 58-101F1, sections 4(a) and (b)

4 (a) Describe the measures taken to orient new directors to the role of the board, committees and directors, and to the nature of the corporation’s business.

(b) Describe the measures taken to provide continuing education opportunities for all directors.

All new directors receive an orientation session delivered by management. The orientation session addresses key industry trends, critical business risks and challenges, the strategic plan, organizational structure and responsibilities of senior staff. New directors are able to meet informally with senior managers to learn about the business.

Each year, CIC sponsors a comprehensive education program for directors of CIC subsidiary Crown boards. The program has focused on the key roles and responsibilities of boards, committees and directors, the skills directors need to effectively discharge their responsibilities, and best practices and new developments in corporate governance. Directors can participate in external development opportunities related to their duties as directors where authorized by the Corporation or the Board.

Yes

CODE OF BUSINESS CONDUCT AND ETHICS

NP 58-201, section 3.8

3.8 The board should adopt a written code of business conduct and ethics applicable to directors, officersandemployeesofthecorporation designed to promote integrity and deter wrongdoing. The code should address:

(a) conflictsofinterest,includingtransactions and agreements whereadirectororofficerhasamaterialinterest;

(b) protection and proper use of corporate assets and opportunities;

(c) confidentialityofcorporateinformation;

(d) fair dealing with the Corporation’s security holders, customers, suppliers, competitorsandemployees;

(e) compliance with laws, rules andregulations;and

(f) reporting of illegal or unethical behaviour.

Board members must comply with the Directors’ Code of Conduct, which was developed by CIC and applies to the directors of all its subsidiary Crown boards. OfficersandemployeesoftheCorporationanditssubsidiariesmustcomplywithSaskWater’s Code of Business Conduct and Ethics Policy.

Both Codes are designed to promote integrity and deter wrongdoing, address the elements of the Policy as they apply to a Crown corporation and provide a mechanism to report illegal or unethical behaviour.

In December 2018, all SaskWater employees completed a policy review of SaskWater’sCodeofBusinessConductandEthics,andConflictofInterestPolicies,andwererequiredtosignanewConflictofInterestdisclosureform.Employeesalso completed refresher training on anti-harassment and Discrimination in July 2018.

Yes

106 107

CSA CORPORATE GOVERNANCE POLICY, NP 58-201, AND DISCLOSURE INSTRUMENT, NI 58-101F1 (SUMMARY)

COMMENTS AND DISCUSSION DOES SASKWATER ALIGN?

NI 58-101F1, section 5(a)

5 (a) Disclose whether the board has adopted a written code of ethical business conduct for the directors,officersandemployeesoftheCorporation;howtoobtainacopyoftheCode;howtheboardmonitorscompliancewiththeCode;and reference any material change reportinthemostrecentfinancialyear relating to any conduct of a directororofficerthatconstitutesadeparture from the Code.

A copy of the Directors’ Code of Conduct can be obtained by contacting CIC.

Committees of the Board monitor compliance with the Directors’ Code and the BusinessCode.TheGovernanceandCorporateSocialResponsibilityCommitteemonitors compliance with corporate donation and sponsorship policies and is responsible to administer, monitor and enforce the Directors’ Code. The Chair of the Committee reports to the Board at each regular meeting any such issues addressed by the Committee, and submits an annual report to the Board regarding compliance with the Directors’ Code.

TheAuditandFinanceCommitteemonitorsthefinancialperformanceofthe Corporation and assists the Board to meet its responsibilities respecting accountingandfinancialreporting,riskmanagement,internalcontrolsandaccountability. The Committee interacts directly with the internal and external auditors, who report to the Committee concerning, among other things, any instances of illegal or improper treatment of corporate assets.

TheGovernanceandCorporateSocialResponsibilityCommitteemonitorscompliance with environmental, health and safety and human resource programs, including compliance with the Business Code.

SaskWater does not have share capital and is not an issuer. Therefore, no material changereportshavebeenfiled.

Yes

NP 58-201, section 3.9

3.9 The board should monitor compliance with the Code and any waiversgrantedforthebenefitofdirectorsandexecutiveofficersshould be granted by the board or a board committee. Any waivers for a material departure from the Code foranydirectorsorofficersshoulddisclose full details of the material change.

The Board has delegated to its Committees the responsibility to monitor compliance with the Codes of Conduct. The Committees report any issues dealt with pursuant to the Codes to the full Board.

NowaiversfromeitherCodehavebeengrantedtoanydirectororofficerin2018–19.

Yes

NI 58-101F1, section 5(b)

5 (b) Describe steps the board takes to ensure directors exercise independent judgment in considering transactions and agreements where a director or officerhasamaterialinterest.

Where a director has, or may be perceived to have, a personal interest in a transaction being considered by the Corporation, the director is responsible to declare any such interest at the meeting where the matter is considered and not to participate in discussions about or vote on the matter.

Management monitors agenda items to identify any issues where a director may have a material interest and such items are not distributed to the director.

Yes

NI 58-101F1, section 5(c)

5 (c) Describe other steps the board takes to encourage and promote a culture of ethical business conduct.

The Board encourages and promotes a culture of ethical business conduct by following current best practices in corporate governance. These practices are reinforced by open and honest discussion about business issues at Board meetings and at informal gatherings between the Board and senior management.

The Board expects management to act ethically in its business dealings, in accordance with all applicable legislation, the Business Code of Conduct and any directives or policies of the Board or the shareholder. Issues arising under the BusinessCodeofConductarereportedtoandmonitoredbytheGovernanceandSocialResponsibilityCommitteeandmanagementreportstotheGovernanceandSocialResponsibilityCommitteerespectingsignificantissuesthathavearisenpursuant to the whistle-blowing policy. Whistle-blowing reports may also be made directlytotheChairoftheGovernanceandSocialResponsibilityCommittee.

Yes

NOMINATION OF DIRECTORS

NP 58-201, section 3.10

3.10 The board should appoint a nominating committee composed of entirely independent directors.

TheGovernanceandSocialResponsibilityCommitteefunctionsastheNominatingCommittee.Allfive(5)membersoftheGovernanceandSocialResponsibilityCommittee, including the Committee Chair, are independent directors.

Yes

CSA CORPORATE GOVERNANCE POLICY, NP 58-201, AND DISCLOSURE INSTRUMENT, NI 58-101F1 (SUMMARY)

COMMENTS AND DISCUSSION DOES SASKWATER ALIGN?

NI 58-101F1, sections 6(a) and (b)

6(a) Describe the process by which the boardidentifiesnewcandidatesforboard nomination.

(b) Disclose whether the board has a nominating committee composed entirely of independent directors and, if not, describe the steps the board takes to encourage an objective nomination process.

Appointments of directors of SaskWater are a decision made by the government throughanorder-in-council.TheGovernanceandSocialResponsibilityCommitteemay, through their responsibility as nominating committee, recommend qualifiednomineestotheSaskWaterBoardforconsiderationandtohavethosenominees be recommended for consideration to the CIC Board and ultimately the Government.

TheBoard,throughtheGovernanceandSocialResponsibilityCommittee,reviewsthe composition and skill sets of directors annually with a view to maintaining an appropriate mix of expertise, experience and diversity on the Board to support the strategic direction and operating needs of the Corporation.

TheGovernanceandSocialResponsibilityCommitteeisresponsibleforidentifyingtheskillsetsneededontheBoard,developingandmaintainingaSkillsProfilethatdelineatesthecompetenciesofcurrentdirectorsandidentifiesanyskillgaps,and seeking and recommending to the Board nominees that have the required competenciestofillanyidentifiedgaps.Inadditiontocompetenciesandskills,the appointment practices encourage diversity in the composition of the Board. In seeking candidates, the Committee may receive recommendations from the directors, senior management and the shareholder. Potential candidates may be interviewedtodeterminetheiroverallfitwiththeneedsoftheBoard,anyconflictsthat would preclude their effective participation and whether they have the time to devote to Board work. The Committee may recommend a list of candidates for each vacant position to the Board, which in turn recommends a list of recommended candidates to the shareholder for approval. The shareholder has the legislative authority to make Board appointments.

The Committee believes that following best practices related to Board appointments, maintaining a skills matrix and recruiting candidates who possess the required combination of skills, background and diversity to add value to corporate decision-making supports an objective nomination process.

Substantial compliance

NP 58-201, section 3.11

3.11 The nominating committee should have a written charter establishing the committee’s purpose, responsibilities, memberqualifications,memberappointment and removal, structure and operations (including any authority to delegate to individual directors or subcommittees) and manner of reporting to the board. In addition, the nominating committee should be given authority to engage and compensate outside advisors necessary to permit it to carry out its work. Where a third party has a legal right to nominate directors, the selection and nomination of those directors need not involve the approval of an independent nominating committee.

TheGovernanceandSocialResponsibilityCommitteehaswrittenTermsofReference setting out its purpose and principal responsibilities, which address the Committee’s responsibility to lead the process of recruiting and nominating candidates for appointment to the Board, as well as the other elements of thePolicyexceptmemberqualificationsandtheabilitytodelegatetasks.TheCommittee has authority to engage outside advisors to assist it in performing its duties, subject to the approval of the Board. The shareholder has the right to nominate candidates for appointment to the Board, and the candidates are assessedbytheGovernanceandSocialResponsibilityCommitteeinthesameway as other candidates.

Substantial compliance

NI 58-101F1, section 6(c)

6 (c) If the board has a nominating committee, describe the responsibilities, powers and operation of the committee.

TheGovernanceandSocialResponsibilityCommitteeperformsthefunctionsofa nominating committee, and its Terms of Reference describe the responsibilities, powers and operation of the Committee. The Committee is appointed by the Board, serves in an advisory capacity and makes recommendations to the Board within its area of responsibility. A copy of the Committee’s Terms of Reference can be obtained by contacting the Corporate Secretary to the Board.

Yes

NP 58-201, section 3.12

3.12 The board should adopt a nomination process, which considers the competencies and skillsoftheboardasawhole;assesses the competencies and skills possessed by each existing director;andconsidersthepersonality and other qualities of each director. The board should also consider the appropriate size of the board, with a view to effective decision-making, and should consider the advice and input of the nominating committee.

The Board’s nomination process is described above, and it meets the guidelines of the Instrument.

As the Committee responsible for the Board’s approach to corporate governance, the Committee makes recommendations to promote timely and effective decision-making.

Yes

NP 58-201, section 3.13

3.13 The nominating committee should be responsible for identifying individualsqualifiedtobecomenew board members and recommending to the board the new director nominees.

TheGovernanceandSocialResponsibilityCommittee,servingasthenominatingcommittee, is responsible for leading the process to identify, recruit and recommendqualifiedcandidatesforappointmenttotheBoard.

Partial Compliance

108 109

CSA CORPORATE GOVERNANCE POLICY, NP 58-201, AND DISCLOSURE INSTRUMENT, NI 58-101F1 (SUMMARY)

COMMENTS AND DISCUSSION DOES SASKWATER ALIGN?

NP 58-201, section 3.14

3.14 In making its recommendations, the nominating committee should consider: the competencies and skills that the board considers necessary for the board as a whole topossess;thecompetenciesandskillsofexistingdirectors;thecompetencies and skills of each nominee;andwhethereachnewnomineecandevotesufficienttimeand resources to board work.

TheprocessfollowedbytheGovernanceandSocialResponsibilityCommitteecomplies with that set out in the Policy and is described above.

Partial Compliance

COMPENSATION

NP 58-201, section 3.15

3.15 The board should appoint a compensation committee composed entirely of independent directors.

TheGovernanceandSocialResponsibilityCommitteeperformsthefunctionsofacompensationcommittee.Allfive(5)ofthemembersoftheGovernanceandSocial Responsibility Committee, including the Committee Chair, are independent directors.

Yes

NI 58-101F1, sections 7(a) and (b)

7(a) Describe the process by which the board determines compensation forthedirectorsandofficersoftheCorporation.

(b) Disclose whether the board has a compensation committee composed entirely of independent directors and, if not, describe the steps the board takes to ensure an objective process for determining such compensation.

AllmembersoftheGovernanceandSocialResponsibilityCommittee,whichservesas the compensation committee, are independent directors.

CIChasthelegislativeauthoritytofixremunerationlevelsandsetexpenseguidelinesfordirectors.TheGovernanceandSocialResponsibilityCommitteehas authority to recommend to the Board (and the Board to CIC) adjustments to directors’ compensation. The Committee receives quarterly reports respecting the remuneration received by members of the Board, and reports any anomalies to the Board.

Each director receives an annual retainer for acting as a Board member. The remuneration levels established by CIC for members of the Board are set out below.

Yes

Director Remuneration Schedule

Board Chair retainer $20,000.00

Board member retainer $14,000.00

Audit&FinanceCommitteeChair retainer

$2,600.00

Other Committee Chair retainer $2,000.00

Committee member meeting fee $650

A copy of CIC’s remuneration and expense guidelines for directors can be obtained by contacting the Corporate Secretary to the Board.

CIC has established a framework for executive compensation, and the Board can approve compensation packages within that framework. The Board has delegated responsibility for addressing and making recommendations concerning managementcompensationissuestotheGovernanceandSocialResponsibilityCommittee. All decisions regarding executive compensation fall within CIC policy and the executive compensation paid is annually disclosed in the Payee Disclosure Report posted on the CIC website.

TheGovernanceandSocialResponsibilityCommitteereviewsandrecommendsto the Board: changes to the design of the Corporation’s overall compensation andbenefitsplans;managementcompensationpackagesthatreflectindustrystandards;performancecompensationprograms;andannualcorporateindicators, including a subset used to determine performance compensation for senior management. In discharging this function, the Committee has the ability to retain external advisors, subject to approval by the Board.

NP 58-201, section 3.16

3.16 The compensation committee should have a written charter establishing the committee’s purpose, responsibilities, memberqualifications,memberappointment and removal, structure, operations (including any authority to delegate to individual directors or subcommittees) and manner of reporting to the board. In addition, the compensation committee should be given authority to engage and compensate outside advisors necessary to permit it to carry out its work.

TheBoardhasapprovedTermsofReferencefortheGovernanceandSocialResponsibility Committee, which addresses the Committee’s responsibilities with respect to compensation, as well as the other elements of the Policy except memberqualificationsandtheabilitytodelegatetasks.TheCommitteehasauthority to engage outside advisors to assist it in performing its duties, subject to the approval of the Board.

Sunstantial Compliance

CSA CORPORATE GOVERNANCE POLICY, NP 58-201, AND DISCLOSURE INSTRUMENT, NI 58-101F1 (SUMMARY)

COMMENTS AND DISCUSSION DOES SASKWATER ALIGN?

NI 58-101F1, section 7(c)

(c) If the board has a compensation committee, describe the responsibilities, powers and operation of the committee.

TheGovernanceandSocialResponsibilityCommitteeservesasthecompensationcommittee, and its Terms of Reference describe the Committee’s responsibilities respecting compensation issues, as well as the powers and operation of the Committee. The Committee is appointed by the Board, serves in an advisory capacity and makes recommendations to the Board within its area of responsibility. A copy of the Committee’s Terms of Reference can be obtained by contacting the Corporate Secretary to the Board.

Yes

NP 58-201, section 3.17

3.17 The compensation committee should be responsible for: reviewing and approving corporate goals and objectives relevant to CEO compensation, evaluating the CEO’s performance in light of those corporate goals and objectives, and determining the CEO’s compensation level basedontheevaluation;makingrecommendations to the board respectingnon-CEOofficerand director compensation, incentive-compensation plans and equity-basedplans;andreviewingexecutive compensation prior to public disclosure.

TheGovernanceandSocialResponsibilityCommitteeannuallyrecommendstothe Board the CEO’s performance targets, and leads the annual performance evaluation process for the CEO. The CEO’s performance is assessed against the established corporate objectives and the CEO’s individual targets. The results of the CEO’s performance are approved by the full Board, and are used in determining compensation.

Respectingnon-CEOofficercompensation,theCommitteeisresponsiblefor recommending to the Board management compensation packages, performance compensation programs and annual performance targets. The Board reviews and approves the achievement of corporate targets annually and the extent to which the targets are achieved determines management’s eligibility for performance compensation.

Executive compensation decisions are subject to any guidelines established by CIC. As a Crown corporation, SaskWater does not have equity-based plans.

Director compensation is determined by CIC.

Executive compensation information is available to the public through publication of Crown payee reports. The Committee does not review executive compensation reports prior to public disclosure.

Partial Compliance

OTHER BOARD COMMITTEES

NI 58-101F1, section 8

8 If the board has standing committees of the board, other than audit, compensation and nominating committees, identify the committees and describe their function.

TheBoardhastheAuditandFinanceCommitteeandtheGovernanceandSocialResponsibility Committee.

Yes

BOARD ASSESSMENTS

NP 58-201, section 3.18

3.18 The board, its committees and each individual director should be regularly assessed. An assessment should consider: with respect to the board or committees,itsmandateorcharter;with respect to an individual director, the applicable position description(s), as well as the competencies and skills each individual director brings to the board.

Board, Board Chair, Committee Chair and Committee evaluations as well as director peer assessments are performed annually on a three-year cycle, with comprehensive Board and Board Chair evaluations being conducted one year, Committee Chair and Committee evaluations being conducted the following year and director peer evaluations done the third year. The evaluations take into consideration the elements of the Policy.

In 2018–19, director peer evaluations were conducted.

Yes

NI 58-101F1, section 9

9 Disclose whether the board, its committees and individual directors are regularly assessed with respect to their effectiveness and contribution and, if yes, describe the process used.

TheGovernanceandSocialResponsibilityCommitteeoverseestheimplementationoftheabove evaluation processes, and uses an external consultant in the case of director peer assessments. The evaluations are survey-based, using an instrument developed by CIC in consultation with an outside consultant and with Crown Board members.

Board, Chair, Committee and director performance is measured against the duties and expectationssetoutintheirrespectiveTermsofReferenceandthespecificstandardsoutlined in the evaluation instruments. The purpose of the evaluations is to identify areas where the Board, Committee, Chair or director is managing well and to highlight areas that maybenefitbyadditionalfocusandattention.

Directors complete surveys to provide feedback in writing on the effectiveness and contribution of the Board, Committees, Chairs and individual directors. The Board Chair or a third party may follow up the written responses with interviews of directors to elicit additional concerns or suggestions for improvement.

TheGovernanceandSocialResponsibilityCommitteepreparesreportsoutliningthe evaluation results, which are submitted to the Board for review and approval. The Committee recommends follow-up action as a result of recommendations made in the evaluation reports, and tracks implementation of any action items

Yes

CSA NATIONAL POLICY 58-101 DISCLOSURE OF CORPORATE GOVERNANCE PRACTICES

10 Disclose whether or not the issuer has adopted term limits for the directors on its board or other mechanisms of board renewal and, if so, include a description of those director term limits or other mechanisms of board renewal. If the issuer has not adopted director term limits or other mechanisms of board renewal, disclose why it has not done so.

The appointment and removal of directors is the prerogative of the Lieutenant GovernorinCouncilpursuanttoThe Saskatchewan Water Corporation Act. Director appointments are not subject to term limits.

No

110 111

CSA CORPORATE GOVERNANCE POLICY, NP 58-201, AND DISCLOSURE INSTRUMENT, NI 58-101F1 (SUMMARY)

COMMENTS AND DISCUSSION DOES SASKWATER ALIGN?

11 (a) Disclose whether the issuer has adopted a written policy relating to theidentificationandnominationof women directors. If the issuer has not adopted such a policy, disclose why it has not done so.

CIChasawritten“BoardofDirectors’AppointmentPolicy.”Whilethepolicydoesnotspecificallyrefertotheidentificationandnominationofwomendirectors,itrequiresCrownboardstoinclude“diversitycandidates.”Theterm“diversitycandidates”isnotdefinedbutitisinterpretedasincludingwomen,Aboriginalpersonsandvisibleminorities.Acopyofthe“BoardofDirectors’AppointmentPolicy”canbeobtainedbycontactingtheCorporateSecretarytotheBoard.

Partial Compliance

(b) If an issuer has adopted a policy referred to in (a), disclose the following in respect of the policy:

(i) a short summary of its objectivesandkeyprovisions;

(ii) the measures taken to ensure that the policy has been effectivelyimplemented;

(iii) annual and cumulative progress by the issuer in achieving the objectives ofthepolicy;and

(iv) whether and, if so, how the board or its nominating committee measures the effectiveness of the policy.

CIC maintains statistics regarding diversity of each Crown board, including progress made in the percentage of women serving on Crown boards. Annually, CIC forwards information to the shareholder to be considered when Board appointment decisions are made. The information includes the skill sets required for the Board and diversity statistics.

AsofMarch31,2019,theBoardwascomposedoffive(5)womenoutofatotalofnine (9) members (56%).

Partial Compliance

12 Disclose whether and, if so, how the board or nominating committee considers the level of representation of women on the board in identifying and nominating candidates for election or re-election to the board. If the issuer does not consider the level of representation of women on the board in identifying and nominating candidates for election or re-election to the board, disclose the issuer’s reasons for not doing so.

It is the responsibility of Executive Council to consider the level of representation of women on the Board.

Partial Compliance

13 Disclose whether and, if so, how the issuer considers the level of representation of women inexecutiveofficerpositionswhenmakingexecutiveofficerappointments. If the issuer does not consider the level of representation ofwomeninexecutiveofficerpositions when making executive officerappointments,disclosetheissuer’s reasons for not doing so.

ExecutiveOfficerappointmentsaremadebytheCEOinconsultationwiththeBoard. The CEO gives consideration to the level of representation of women inExecutiveOfficerpositions,alongwithotherrelevantfactors,whenmakingExecutiveOfficerappointments.

Yes

14(a) ForpurposesofthisItem,a“target”means a number or percentage, or a range of numbers or percentages, adopted by the issuer of women on the issuer’s board or in executive officerpositionsoftheissuerbyaspecificdate.

(b) Disclose whether the issuer has adopted a target regarding women on the issuer’s board. If the issuer has not adopted a target, disclose why it has not done so.

AlthoughtheCICpolicyrequiresCrownboardstoinclude“diversitycandidates,”theCICpolicydoesnotadoptaspecifictargetforrepresentationofwomenontheBoard.

No

(c) Disclose whether the issuer has adopted a target regarding women inexecutiveofficerpositionsoftheissuer. If the issuer has not adopted a target, disclose why it has not done so.

(d) If the issuer has adopted a target referred to in either (b) or (c), disclose:

(i) thetarget;and

(ii) the annual and cumulative progress of the issuer in achieving the target.

SaskWaterdoesnotcurrentlyhaveatargetregardingwomeninExecutiveOfficerpositions.

No

15 (a) Disclose the number and proportion (in percentage terms) of directors on the issuer’s board who are women.

TheBoardiscurrentlycomposedofnine(9)members,five(5)ofwhicharewomen(56%).

Yes

(b) Disclose the number and proportion (in percentage terms) of executive officersoftheissuer,includingallmajor subsidiaries of the issuer, who are women.

Currently,one(1)ofthethree(3)ExecutiveOfficersisfemale(33.3%). Yes

112

Doug Matthies,President and CEO

Doug Matthies has served as President and CEO of SaskWater since July 1, 2010. Prior to joining SaskWater, he served in several senior capacities in the provincial government, including Deputy Minister of Finance, Deputy Minister of Agriculture and Food, General Manager of the Saskatchewan Crop Insurance Corporation and General Manager of the Saskatchewan Pension Plan.

Doug has over 30 years’ experience in the provincial government in several areas, including strategic planning, policy analysis and development, financial management, program operations, public accountability, legislative and regulatory processes, and stakeholder relations and consultations. Prior to joining government in 1987, he worked in the private-sector accounting firm of Clarkson and Gordon and later the firm Arscott Hill & Matonovitch.

Doug has served on several boards over the course of his career, including organizations in the fields of international trade, agricultural research, transportation and financial institutions. He has also been a member of various federal–provincial working groups, inter-ministry working groups and community groups.

Doug is a Chartered Professional Accountant (CPA) with a Bachelor of Administration (Distinction) degree from the University of Regina. He has also obtained his Chartered Director (C. Dir.) designation from The Directors College.

Jacquie Gibney,Vice President, Corporate and Customer Service

Jacquie Gibney became Vice President, Corporate and Customer Service at SaskWater in September 2014. She is responsible for human resources, administration and facility services, information technology, policy and planning, corporate communications, OH&S and business development for the corporation.

Prior to joining SaskWater, Jacquie held several positions with Farm Credit Canada, including Director of Corporate Communications and Change Management and Director of Strategy and Government Relations. She also spent over 20 years with the Saskatchewan Ministry of Agriculture in a variety of senior capacities, including Assistant Deputy Minister responsible for industry development.

Jacquie has over 28 years of public sector experience, including agriculture finance, policy and program development, corporate communications, strategic planning, government relations, research and business development.

Jacquie has a Bachelor of Science in Agriculture degree from the University of Saskatchewan and a Master’s degree in Business Administration.

Eric Light,Vice President, Operations and Engineering

Eric Light assumed the duties of Vice President, Operations and Engineering in June 2014. He is responsible for managing the delivery of SaskWater’s core business – the operation, maintenance and service delivery for the supply of potable and non-potable water to communities and industries, and for the engineering functions to manage new capital projects and support operations. Other lines of business falling under Eric’s direction include certified operation and maintenance of customer-owned infrastructure and operator training.

Eric has over 33 years of engineering and management experience and has been with SaskWater since 1986. His previous position was Director of Engineering; a role he had held since January 2009.

Eric has a Bachelor of Applied Science (Distinction) degree in Regional Systems Engineering from the University of Regina, as well as his Master of Engineering degree in Civil Engineering from the University of Saskatchewan. He is a member of the Association of Professional Engineers and Geoscientists of Saskatchewan.

EXECUTIVE

TABLE OF CONTENTSAbout SaskWater 1

Financial and Operating Highlights 4

Letter of Transmittal and Minister’s Message 6

Letter to Stakeholders 8

Management Discussion and Analysis 10

SaskWater’s Core Lines of Business 12

Strategic Plan and Balanced Scorecard 18

Customer Driven 20

Pursuing Excellence 34

Valuing Employees 44

Succeeding Financially 58

2018-19 Financial Results 60

Management’s Report on Internal 74 Control over Financial Reporting

Management’s Responsibility 74

Independent Auditor’s Report 75

Financial Statements and Notes 76

Corporate Governance 96

Board of Directors 100

Corporate Governance Statement 102

Executive 112

Corporate Directory 113

CORPORATE DIRECTORY

Doug MatthiesPresident and CEO

Danny BollingerDirector, Financial Services

OPERATIONS AND ENGINEERINGEric LightVice President, Operations and Engineering

John ConwayDirector, Engineering

Rynette Moore-GuillaumeDirector, Operations

Kevin CudmoreManager, Northern Engineering

CORPORATE AND CUSTOMER SERVICEJacquie GibneyVice President, Corporate and Customer Service

Randy AveryDirector, Customer Growth and Engagement

Amanda ZarubinDirector, Corporate Services

Ingrid NewtonManager, Strategic Planning and Policy

Courtney MihaliczManager, Corporate Communications

Paul MaysonManager, IT Services

OFFICE LOCATIONSSaskWater Head Office200-111 Fairford Street East Moose Jaw, SK S6H 1C8 (306) 694-3098 Toll-free: 1-888-230-1 1 1 1

Prince Albert800 Central Avenue McIntosh Mall Prince Albert, SK S6V 6G1

Regina225-A Hellen Drive RM of Sherwood, SK S4K 0A3

Saskatoon#5-1925 1st Avenue North Saskatoon, SK S7K 6W1

Annual Report 2018-19

saskwater.com

200-111 Fairford Street East Moose Jaw, SK S6H 1C8

Toll-free: 1-888-230-1111 Inquiry: (306) 694-3098

SaskW

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