A decade of growth will help Saskatchewan's economy withstand current economic pressures
There was no doom and gloom in Paul Martin's 2015 outlook presentation for Saskatchewan at a Swift Current and District Chamber of Commerce hosted evening on February 25.
Martin highlighted in last Wedensday's presentation for 80 people at the Living Sky Casino that Saskatchewan's broadbased economy is poised to withstand the current pressures experienced across North America. He highlighted that the Conference Board of Canada is predicting that Saskatchewan's economy is expected to avoid a recession and actually grow by 0.8 per cent this year.
"The big, bright, shiny headlines tend to overshadow things. So right now the headline is about the price of oil and it's impact in Alberta in particular it's kind of an overshadow here. If Alberta's being hurt that much we must be being hurt that much too. But in fact Saskatchewan's economic underpinnings are somewhat different than Alberta. Alberta obviously relies very heavily on oil, much more than we do. It's important to us but it's not the only show in town. We've got potash, we've got agriculture in bigger ways," Martin said following his presentation.
He said Saskatchewan's strength in the three F's - Food (agriculture), Fuel (uranium and oil), and Fertilizer (potash) - is allowing Saskatchewan to show more resiliency in dealing with the slowdown in oil.
Specifically, potash is quietly enjoying a resurgence, which is largely being ignored while oil production concerns are being realized.
"We've got a little bit more diversification in the economy…and while we're bruised, we're not hurt."
Martin pointed out that over the last decade in Saskatchewan, a highlight across the province has been private sector capital investment. Saskatchewan has experienced a growth in capital investment from $6 billion in 2006 up to over $14 billion in 2012 and 2013. This doubling of private sector capital investment had fundamentally changed Saskatchewan's economy, with the province benefiting from $74 billion in capital investment since the mid 2000s.
"We've seen a lot of growth in private sector investment," Martin said. "Of that growth that we saw from about $7 billion a year in annual investment or new capital, to now we're over $20 billion. Of that growth only about 30 per cent of that was the resource sector. Seventy per cent was the other part of the economy - so it's people who service and support the resource sector, residential construction, retail activity."
He pointed out that it is easy to see that Swift Current is sharing in the provincial success story.
"Look at the Industrial Park here in town. There's no space available. There's no land available…somebody invested in that. Now you're on the outskirts of town and starting to get out of town with some of the industrial and commercial developments. It's no different than any other city in the province."
"It has been a private sector drive. There's no question. And my argument tonight to the Chamber was that the key factor that's made the difference in the Saskatchewan economy has been investment. It's not something that the mainstream people talk about. We tend to look more at what's the price of oil, and how much volume we are doing, or what's the price of potash. I've been looking at it as that it's been more of an investment play. And you can track the transformation when the investment started to flow, population started to move, and the growth started."
Saskatchewan also continues to thrive when it comes to exporting provincial products and resources.
"Saskatchewan people are the world's greatest exporters and traders. When you walk them through the numbers and say Canada's the most trade dependent, trade successful national economy in the industrialized world. And within Canada, Saskatchewan does more trade per capital than any other jurisdiction, it could be argued we're the most successful traders."
Martin also turned his focus to Canada's north as the next major economic opportunity, and proposed a unique solution to allow Saskatchewan to be a big player in this bright future. He noted that $140 billion worth of mining projects have been identified in the north, and there are other opportunities.
"I just watched what Danny Williams did in Newfoundland and its been a terrific boost for them and I just can't figure out why we wouldn't do that here," Martin said. "I would sure love to see the premier engage in a conversation with his counterpart in the Territories and say 'you guys want provincial status, is there any way we can create some kind of a relationship here?'"
Martin, who serves as the chair of Martin Charlton Communications, has been a leading business Saskatchewan commentator with over three decades of experience.