Jan. 31, 2013 — The StarPhoenix & The Leader-Post
Though stuck in the middle geographically, Saskatchewan is at the top.
The prairie province is thriving in all sectors of the economy, leading the way for the rest of Canada. After a crowning year in 2011, the Saskatchewan economy maintained growth in 2012 and all indicators point to continued growth for the province in 2013 – fueling the once “have-not” province down the road to prosperity.
“We are exceptionally strong,” says Steve McLellan, CEO of the Saskatchewan Chamber of Commerce. “We are producing all the things that the world needs. [Certain sectors] will fluctuate from month to month as the year goes on, but over the course of any long-term span, Saskatchewan is exceptionally well positioned and will continue to be.”
A Royal Bank of Canada (RBC) report released in September 2012 forecasted Saskatchewan’s gross domestic product (GDP) to rise 3.6 per cent in 2012, and further increase in 2013 with projected growth of 4.0 per cent. In comparison, the national average is estimated at 2.1 per cent growth for 2012 and 2.4 per cent for 2013. The outlook indicates that Saskatchewan is continuing to be an economic force to reckon with – a force fueled by recent acceleration in provincial employment growth and stronger than expected gains in manufacturing sales, wholesale trade and retail sales.
Securing a top spot in their claim-to-fame category, Saskatchewan should maintain increases in crop production numbers in 2012 and 2013, but the same can’t be said for its non-food commodity prices. The global demand for potash slowed in 2012, causing production cutbacks at provincial mines going into 2013. Although weaker than anticipated, the pursuit of potash from Saskatchewan still remains robust enough for the province to maintain above average levels of profit.
“We have some sectors that are off from the previous year – that’s just the nature of business. Even if they are down a bit, they are still double or triple where they were a decade ago. And that’s the important thing,” says McLellan.
“It’s like a hockey player suggesting he had a very tough year – he only made two million dollars. Well, he still had a very good year, but he’s just down from the year before. So when you look at how all that translates into the provincial economy and the provincial government budget, it’s exceptionally encouraging to see that a couple of sectors can be a bit off, but we are still doing very well.”
A mid-year budget released by the Saskatchewan government in November projects a $239.8 million drop in potash revenue, and a $164.6 million drop in oil. But despite the signifi cant downturn, the provincial budget is still on track to balance in the black – a testament to the success of the province as a whole, according to Minister of the Economy Bill Boyd.
“Our economy, in general, is performing very well. We are seeing some areas of our economy out-performing what was thought to be their expected performance for the year, and as a result of that, we still have a balanced budget here in Saskatchewan. The good news is that we have many, many areas of our economy that are performing very well,” he said.
“The growth in the economy – which we have been very actively promoting – is really making a difference in terms of anytime that we have a slight pullback in other areas of the economy.”
Business ideologies going into 2013
With recent changes to Saskatchewan labor laws and a projected unemployment rate of 4.6 per cent in 2013, the New Year might become the year of working smarter, not harder.
“I think we are going to start into a new era where businesses start to work smarter, [using] themes like innovation and productivity and the use of more digital equipment and technology to enhance efficiencies across businesses. This is already evident in the agriculture industry with GPS on equipment, it’s evident in manufacturing with more robotics and pieces like that in place, and it’s also evident in systems where productivity and things like lean manufacturing is a much more prevalent concept than it ever was,” says McLellan, who notes the Chamber of Commerce, the provincial government and many businesses see the benefit of this outlook on production.
By continuing to use innovative practices and new technologies, Saskatchewan businesses can work towards increasing outputs without increasing costs, while at the same time, securing the province a spot on the world stage.
“The innovation economy which we are definitely promoting here in Saskatchewan further diversifies our economy and is making a big difference,” says Boyd. “We are seeing companies from around the world actively investing in our province, resulting in much stronger employment numbers – up just under 16,000 people from last year -and really makes a strong impact on our economy in a positive way.”
The year of the party
After working hard to establish solid roots in the Canadian economy over the last few years, Saskatchewan will reap the social benefits of their success in 2013. Regina will host the 2013 JUNO Awards in April, followed by the 101st Grey Cup in November – two of the most high profile events in Canada. Bringing in droves of visitors on two separate occasions, the events will not only fill hotel rooms and restaurants, but also showcase Saskatchewan as a tourist destination and a hub of sport and culture.
“Economically, there is no question that [the 2013 events] are a big deal. But more important than the economics, is the attitude adjustment that we get from it, from both from our own residents … and the attitude and the perspective of those who come to the events,” says McLellan, who adds the intangible profits are undoubtedly more important than the physical dollars the events will produce.
“The real benefits are not the expenditures that happen on [those weekends] – the real benefits are the investments that people make both mentally and longer-term into Saskatchewan,” says McLellan.