BIZWORLD

SaskPower plant ben­e­fits to Moose Jaw great, but short-term out­look still over­cast

Moose Jaw Express.com - - News - By Ron Wal­ter For Moose Jaw Ex­press Ron Wal­ter can be reached at ron­[email protected]­tel.net

The sign­ing of a deal to build a $700 mil­lion nat­u­ral gas co-gen­er­a­tion plant in Moose Jaw will ce­ment this city’s fu­ture.

When in­dus­try looks for lo­ca­tion sites, four fac­tors tip the bal­ance in de­ci­sions: skilled re­li­able pool of labour, ac­cess to mar­kets, re­li­able sup­ply of wa­ter and en­ergy. Moose Jaw has the labour pool, the ac­cess to mar­kets by rail and high­way, the wa­ter and now a bet­ter sup­ply of en­ergy. In­creas­ingly, in­dus­try seeks en­ergy pro­duced with low green­house gas emis­sions. Nat­u­ral gas has the low­est emis­sions out­side of ura­nium, so­lar or wind en­ergy. The plant is part of the pro­vin­cial pro­gram to lower green­house gas emis­sions from shift­ing power sources by 2030. This plant could add about 10 per cent to SaskPower’s gen­er­at­ing ca­pac­ity,

Aside from act­ing as an at­trac­tion for busi­ness, the plant will have other ben­e­fits — 600 em­ploy­ees here dur­ing the three year con­struc­tion pe­riod, about 25 full-time em­ploy­ees, a ma­jor user of wa­ter, and pos­si­bly mu­nic­i­pal tax rev­enue.

The pro­vin­cial gov­ern­ment ended grants in lieu of taxes from crown cor­po­ra­tions in 2016. Hope­fully the city was able to ne­go­ti­ate grants for this plant. The full grant in lieu would add $10 mil­lion a year to lo­cal prop­erty tax rev­enues. Cur­rent prop­erty tax rev­enues are $27 mil­lion a year.

Pol­i­tics of­ten en­ters into ma­jor Crown Cor­po­ra­tion de­ci­sions: wit­ness the nat­u­ral gas co-gen­er­a­tion plant un­der con­struc­tion at Swift Cur­rent, home of the premier when it was an­nounced.

To the ex­tent that pol­i­tics in­flu­enced this de­ci­sion, our two Saskatchewan Party MLAa may have more clout in cau­cus than pre­vi­ously thought.

The next decade looks a lot brighter for Moose Jaw but the im­me­di­ate eco­nomic out­look isn’t any­thing to write or text home about.

The Royal Bank’s out­look in De­cem­ber re­duced growth es­ti­mates in Saskatchewan to 1.6 per cent of GDP from 1.7 per cent this year.

The Saskatchewan part of the out­look, ti­tled Bumpy Road Ahead, cau­tions of pres­sure on the en­ergy min­ing sec­tor on a num­ber of fronts. Oil price weak­ness will have a greater im­pact on in­vest­ment than pre­vi­ously an­tic­i­pated.

Ura­nium looks weak with some re­cov­ery in potash. Un­for­tu­nately for potash and oil, po­lit­i­cal de­ci­sions by car­tels – OPEC for oil and Rus­sian potash gi­ants – can sud­denly shift prices up or down.

Agri­cul­ture has off­set some of the min­ing de­cline. Of course, as­sump­tions about agri­cul­ture in­clude “nor­mal crop grow­ing con­di­tions.”

The last pro­vin­cial crop re­port in­di­cated one-third of cul­ti­vated land and al­most half of pas­ture/for­age land is short or very short of mois­ture.

This prov­ince needs lots of snow, a good spring run-off and timely rains to de­velop aver­age agri­cul­ture crop and live­stock pro­duc­tion next year.

The prov­ince re­mains in­flu­enced by that “Next Year” hope that has gripped Saskatchewan since the first set­tlers broke sod.

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