Economy continues ups and downs in wake of low oil prices, higher taxes

Depending on where you look, the province is either recovering from an economic slump or still stuck in a slowdown.

New figures show June employment numbers are down 0.4 per cent overall from a year ago, negating the gains made earlier this year.

Doug Elliott, publisher of Sask Trends Monitor, says that “indicates there isn’t any strong recovery going on in the labour market.”

So, that is the bad news and a sign the economy is still struggling.

That’s compounded by lower year-over-year employment in agriculture (down 12 per cent) and work related to mining, oil, gas and utility (down eight per cent). Jobs in finance, insurance and real estate dropped seven per cent, as did jobs in accommodation and food services.

But another look at the latest employment numbers offers some good news.

“All of this decline was in parttime jobs, which I’m not a big believer that there are good jobs and bad jobs, but most people would prefer there would be a full-time increase rather than part-time jobs,” says Elliott, noting full-time employment is up 0.8 per cent.

Manufacturing (10 per cent) and business services (14 per cent) saw an increase in jobs.

Outside of jobs, there have been other recent signs of economic recovery in the province.

Automobile sales are up 15 per cent compared to last year. Building permits in Regina showed growth in June, with 114 being issued this year as opposed to only 78 for the same month last year.

But on the other side of the coin are realty statistics for the first half of 2017: Home sales are down from last year, while the number of active listings has hit an all-time high for Regina.

Elliott says the early parts of 2017 showed signs of recovery, notably found in the number of building permits being issued, manufacturing shipments increasing and retail sales going up.

Then in March, the province released its budget. That came with a $1-billion hike on taxes and a plan to post a $685-million deficit.

Many of the budget-related moves that will have an impact on the province are just starting to roll out, so it is difficult to tell what kind of impact those measures — like an increase in sales taxes and insurance taxes — will have on Saskatchewan’s economy.

“The economy was certainly starting to recover in early 2017,” Elliott said. “There will be a dampening effect because of the provincial budget, nobody disputes that. But we just don’t know how bad it will be and how long it will take, the extent of that decline.”

Finance Minister Kevin Doherty is expected to release an update on the province’s finances in August.

He focused on the positive signs of the economy on Friday, before calling the Bank of Canada’s plan to raise interest rates “wrongheaded.”

Interest rates are expected to be increased next week. Doherty said the private sector, tasked with creating jobs, may not be so eager to make such investments if interest rates go up.

“We want (the private sector) out there spending money, and borrowing money to spend that money,” he said.

“Raising interest rates would just put a dampening effect again on our economy here. That’s not needed here at this time in the province of Saskatchewan.”

Other provinces appear to be faring better than Saskatchewan. Alberta, Manitoba and B.C. all saw overall growth in their June job numbers.

Alberta, in particular, took a different tack in its provincial budget, aiming to spend its way out of slow economic times as opposed to Saskatchewan’s plan to restrain spending.

“We’re going to find out in the next three months which approach was the best,” said Elliott. “These are really preliminary observations, (but) it looks like the Alberta government made the right decision.”