Sask. Party’s economic strategy is a mess

Despite rhetoric, economy fell 1.4 per cent in 2015

Some recent statistics seem to show that the Sask. Party’s economic development strategy is in a bit of a shambles.

So what exactly is the government’s economic development strategy? As Premier Brad Wall said in a tweet to supporters earlier this year: “Rather than gov picking winners & loser(s) we’ve focused on creating right biz climate. Result? Record job & pop growth.”

Unfortunately, the economic climate, as measured by the gross domestic product (GDP), is kind of cloudy these days. Statistics Canada reported Thursday that Saskatchewan’s economy had negative growth or a contraction of 1.4 per cent in 2015.

This was the third-worst performance in the country, next to Alberta, which suffered a 4.0 per cent contraction and Newfoundland and Labrador, which saw a 2.2 per cent decline.

It’s no coincidence that all three provinces have large oil and gas sectors, which have been in the tank since the price of oil tumbled from a high of US$107 a barrel in June 2014 to a low of US$26 in February before recovering to around US$46 recently.

During that time, oil-producing provinces have seen their economies shrink, unemployment rates rise, capital investment dry up and other economic indicators (retail sales, manufacturing shipments, housing starts, employment growth) stagnate or decline.

And 2016 looks to be more of the same. BMO forecasts the Saskatchewan economy to grow by a minuscule 0.5 per cent, which is pretty close to a recession (technically, two consecutive quarters of negative growth).

Another StatsCan report released this week shows just how much the collapse of oil prices has affected capital spending plans in oil-producing provinces, like Saskatchewan.

While Alberta can expect the biggest decline in capital investment of $8.9 billion this year (thanks to a $10.7-billion reduction in oil and gas spending), Saskatchewan will see the biggest percentage decline of nearly 18 per cent, or $2.9 billion, to $13.6 billion.

Now, I’m not suggesting for a minute that the Sask. Party government is to blame for what has befallen the oilpatch in the past 18 months and what’s going to happen over the next year or two.

I wouldn’t even mention it, except for the fact the Sask. Party government keeps harping about how much more diversified the provincial economy is today than it was before it took office in 2007.

Economy Minister Bill Boyd mentioned it just the other day in response to the GDP numbers. “It speaks to the diversity of our economy,’’ he said in an interview. “Agriculture is still doing well and set (a) record for exports in 2015. Compared with other provinces, we’re doing relatively well.’’

Of course, “doing relatively well” is, well, relative to the provinces we’re compared to. Compared with Alberta and Newfoundland and Labrador, we’re “doing relatively well.’’ Compared with the other seven provinces, we’re not.

More importantly, there’s no evidence to suggest Saskatchewan’s economy is any more diversified than it was eight years ago. In fact, the energy sector currently represents 25 per cent of the provincial economy, the same as it did in 2007.

What about Wall’s claim the government doesn’t “pick winners and losers?”

Yet another report from Statistics Canada this week showed that cultural industries made up only 1.3 per cent of GDP, the lowest share among the provinces and less than half of the national average of 3.0 per cent.

This is the same government that axed the Saskatchewan Film Employment Tax Credit in 2012. In an ill-advised, politically motivated decision to save about $1.3 million a year, the government effectively killed the film and video industry in the province.

Hundreds, if not thousands, of jobs were lost and a foundational cultural industry gutted on an ideological whim.

In its place, Creative Saskatchewan has been doling out millions to fund a handful of projects, but has failed to generate anywhere near the employment and economic impact of the Film Employment Tax Credit program.

Speaking of picking winners and losers, this is the same government that forked over $3 million to SkipTheDishes, the online food delivery service, to create 300 new jobs — at $10,000 a pop. Now Wall says we can’t afford to make any more deals like that and the bank is closed.

That’s the problem with picking winners and losers. Like ordering takeout from a fancy restaurant, it’s expensive and you don’t always get what you ordered.