By Katie Ryan
Growth is in store for Saskatchewan this year according to a new report. A provincial trends report released last week by Scotia Economics pegs Saskatchewan’s gross domestic product to be the second-highest growing in the country in 2010.
While the overall national average sits at 3.6 per cent, Saskatchewan’s GDP will grow by 3.9 per cent, second only to Alberta.
With 16 months until the 2011 provincial election, local MLA Tim McMillan said the report is not only good news for government, but for all Saskatchewan residents.
“Everything can be factored into an election cycle, but I think we should take the politics out of it,” he said. “Saskatchewan is a great place to invest, it’s a great place to do business and numbers like this just show that people in Saskatchewan and other people are giving us the first look instead of the second or third that they have in the past.”
According to the report Saskatchewan will be among the “top performing provinces” thanks to a revival in export sales and population growth. And though potash shipments plummeted in 2009, Scotia Economics predicts a “notable rebound” in potash sales and the pink mineral will even be a “key economic driver” this year.
“I think potash was systematic of commodities last year. Exports around the world, of many things, dropped off to almost nothing and potash here in Saskatchewan was probably where we saw our largest hit,” said McMillan. “I think as things pick up around the world, most of our potash is exported to India, China, the U.S. and it’s very positive to see that they have been running close to capacity for most of this fiscal year. And hopefully that continues.”
The report forecasts a 1.4 per cent increase in employment in 2010 due to the “continued expansion of the province’s economy.” Developments including the Bakken oil field are also expected to bolster the province’s economy, says the report.
“I think it’s obviously very positive for Saskatchewan to be leading in these types of numbers and as a government we are encouraged by it. We will continue to work to make sure that this isn’t a blip, that this is hopefully going to sustain itself for some time in Saskatchewan,” said McMillan.
On the flip side of Scotia Economics’ positive forecast, Saskatchewan’s wet spring weather will weaken agricultural shipments this year. The report says an increase in global production has cut prices and will reduce incentive to plant as well.
“If they are just looking at raw GDP numbers, the large portion of our economy is agriculture and we are seeing on the eastern side of the province in particular, but in other areas as well, when they can’t get the crop in the ground you know that we won’t have crops to harvest in the fall and export over the winter,” said McMillan. “It hits those bottom line numbers.”
Despite the growth predicted for Saskatchewan, overall the report says Canada will see its economic growth slow by the end of 2010 because of several factors: the eurozone debt crisis, a cooling housing market industry and less government stimulus funding. Regardless of the pending slow down though, Scotia Economics forecasts Canada will remain at the top of the G7 economic rankings.