Abstract: A strong economy in the U.S.,
China and Brazil will fuel growth in the oil patch, potash and
agriculture. Saskatchewan’s economic growth is leading the prairies. Though
still relying on resources, Saskatchewan can lever on immigrants, encourage
more technical innovation and management reform. In 2018, Saskatchewan’s
exports to China increased by 31.1%. As China is Saskatchewan’s second largest
importer and as China has SK’s highest export growth in 2018, China may play a
more and more significant role in Saskatchewan’s economy though a bad
Sino-Canada relationship may put Saskatchewan at great risk. In spite of its
prairie leading position, Saskatchewan’s real economic growth is getting slower
than the previous years. Moreover, BC, a province not as rich in resources and
not as big in export, is doing much better than SK. A clear goal, wise
governance and oversight, a solid strategy and implementation plan are
necessary for another economic take-up.
Key Words: Growth Model, Exports, Immigrants, China
2019 is a special year, not
only because of the coming Federal election in October but also because of the
change of relationship with China. As China is Saskatchewan’s second largest
importer and as China has SK’s highest export growth in 2018, China may play a
more and more significant role in Saskatchewan’s economy. This article will
discuss Saskatchewan’s economic growth rate, some of the fast growing
industries, economic drivers and some of the areas to work on.
I.
Economic
Growth
The Conference Board of Canada
says Saskatchewan is poised to become one of the country's hottest economies
this year as the stronger oil sector will help fuel economic growth in
Saskatchewan in 2019[i].
Atlantic Canada, Saskatchewan and B.C. will enjoy an increase in growth this
year—despite the fact that there is easing in consumer and government spending.
Economic Growth Rate
Comparison
Place
|
Canada
|
PEI
|
NF
|
BC
|
SK
|
ON
|
QC
|
MB
|
NB
|
AB
|
Growth Rate (%)
|
1.9
|
3.2
|
2.7
|
2.5
|
2.2
|
2.1
|
1.8
|
1.6
|
1.4
|
1.3
|
Source：Conference
Board of Canada
SK Economic Data (% change
unless otherwise specified)
2016
|
2017
|
2018
|
2019
|
2020
|
|
Real
GDP
|
-0.4
|
2.2
|
1.7
|
1.6
|
2.2
|
Employment
|
-0.9
|
-0.2
|
0.3
|
0.2
|
0.6
|
Unemployment
Rate (%)
|
6.3
|
6.3
|
6.1
|
6.0
|
6.0
|
Retail
Sales
|
1.5
|
4.1
|
0.9
|
3.5
|
3.6
|
Housing
Starts
|
4.8
|
4.9
|
3.8
|
4.3
|
5.3
|
Source:
Statistics Canada, RBC Economic Research
The
Conference Board of Canada is predicting the province's GDP to grow by 2.2
per cent this year, higher than Manitoba, Alberta and Quebec. The board
believes a strong economy in the U.S., China and Brazil will fuel growth
in the oil patch, potash and agriculture.
II.
Economic
Drivers and Foot-Draggers
The
outlook for the Saskatchewan economy turns cloudy with the mining sector under
pressure on a number of fronts[ii].
Greater weakness in oil production was
already evident in data to date in 2018 which caused us to trim our 2018
GDP growth forecast for the province
to 1.7% from 2.2% previously.
Non-energy
mining presents a mixed picture. The outlook for uranium remains bleak with the
major uranium producer in the province indefinitely suspending production at
its major production facilities. The sector continues
to both struggle from the fallout from
the Japanese nuclear disaster in 2011
and fail to benefit from the low level of carbon emissions
from nuclear power. Some offset to the weak
uranium outlook has been provided by potash
production that has continued to grow to date in 2018, albeit at a slower pace
relative to 2017.
However,
the annual trade report of the Saskatchewan Trade and Export Development
Partnership (STEP), released on March 12, 019, states that the total value of
Saskatchewan exports to the world in 2018 reached $31.2 billion, an increase of
11.2% compared to 2017. This is the highest year since exports peaked at $35
billion in 2014. In 2018, Saskatchewan’s exports of products to the United
States increased by 14.7% to $17.3 billion, which maintained the United States’
status as the first export market for Saskatchewan products. At the same time,
Saskatchewan still has 44% of its exports generated in other countries, so
Saskatchewan continues to maintain its position as the largest export market in
Canada. In 2018, Saskatchewan’s exports to China increased by 31.1% to $4.6
billion. The other countries with some of the higher growth rates are Brazil
(68.7%) and Indonesia (35.1%). Compared with China, Saskatchewan’s exports to
India fell by 46.1% in 2018, reaching only 618 million Canadian dollars, which
is almost entirely due to India’s punitive tariffs on imports of peas and
lentils. Exports to Japan, accounted for the third place and for two-fifths of
China’s total, fell by 0.2%. STEP conservatively predicts that Saskatchewan's
exports will increase by 4% in 2019, in line with Export Development Canada's
estimate of Saskatchewan's exports in 2019[iii].
The Conference Board of Canada predicts Saskatchewan exports will increase 4.8
per cent this year and 3.2 per cent next year, based on its optimistic
prediction of more trade agreements with Europe and Asia, as well as the
federally-funded Protein Industries Supercluster.
The
trade situation is not so promising both due to the fact that US is now a net
oil exporting country and that many of China’s imports from Canada will be
suspended (besides zero import of oil and gas from China for 4 months now)
reflected by the suspension of export permits of Viterra, Richardson
International and a third one in canola seeds (possibly due to discovery of
fungi and some foreign matter), the inspection time of soybeans from several
days being extended to 3 weeks, and the suspension of export permits of 2 big
pork exporting companies (due to the use of obsolete forms). It is reported
that Canada exported 2.5 billion dollars of canola oil (accounting for 90% of
China canola oil imports) and 0.7 billion dollars of soybeans to China (an
increase of 80% last year). People may claim that this is China’s revenge after
Huawei’s CFO Wanzhou Meng was arrested. However, some experts have pointed out
that Mexico’s imports from Canada in 2018 are less than half of China’s though
Mexico is within USMCA. Also, based on trade data of the first half of the year
2018, 42.1% of Canada’s imports from China (and 25% from the US) were in
computer and electronic products manufacturing, electrical equipment,
appliances and components manufacturing and electric power generation,
transmission and distribution[iv].
That means Canada is more reliant on China in terms of both the volume and the
price.
Both Regina and Saskatoon are
expected to grow by slightly more than two percent annually in 2019 and 2020,
with the pace of growth marginally higher in Saskatoon. Population growth in
both Saskatoon and Regina is expected to dip below the levels seen earlier in
the decade, but average just under two per cent annually through 2022. Regina
can expect annual net migratory inflows about three times greater more than the
average of the previous 30 years. Saskatoon is expected to record faster
employment growth than Regina in 2019, but Regina will maintain a lower
unemployment rate. Regina has an interest in the fate of the controversial
Trans Mountain pipeline expansion since pipeline-builder Evraz Steel is a major
local employer. Saskatoon’s manufacturing sector is expected to post steady
annual growth rates through 2022. The sector has posted strong productivity
gains in recent years, and therefore has grown output without adding workers[v].
III.
Areas
to Improve
The
predicted growth will be tempered by a slowdown in capital spending by the
province. Spending on large projects is expected to dip by more than 10 per
cent this year[vi].
Data to date in 2018 are indicative of
employment growth this year of a
minimal 0.3% which is expected to be
largely matched in 2019. The projected
improvement in GDP growth in 2020 is
expected to contribute to employment growth rising to 0.6%.
This slight increase in hiring is expected to send the unemployment rate down
slightly to 6.0% in 2019 and 2020 from the 6.1% expected this year[vii].
According
to Solow, economic growth may be contributed by labor, capital and factor
progress, shown by GA = GQ -αGL
-βGK. Therefore, when the contribution of labor becomes limited, we
need to look at capital and factor progress (which may include both structural
change and technical innovation). As seen in Regina, immigrants play a great
role in its economy, and enterprise immigrants even a bigger role. In order to
obtain more enterprise immigrants, we need to streamline and simplify
procedure, lower small business tax rate and fees (as they are ones that create
jobs) and cut down on red tape and make regulations clear and transparent.
Encouragement should also be given to contributions to management improvement
and technical innovation, and new materials, new energies and new technology
should be promoted.
As to
big project investment, people question the need for a new stadium in Regina at
the cost of all taxpayers and the Regina Bypass Project with quadrupling cost
yet unsatisfactory design and quality[viii].
By due diligence and a real cost-benefit analysis, investment in projects may
be more reasonable and feasible after a thorough feasible study is conducted
economically, financially and technically.
SREDA CEO Alex Fallon said in
a prepared statement that there are bright spots in the provincial economy. “We
are remaining competitive through our diverse economy and strength in
industries like potash, agriculture, technology, science and innovation, and
continued population growth.”[ix]
The writer agrees to put more focus on technology, science and innovation but
with an addition of economic immigrants and sound governance.
As to why BC is doing better than
SK, the writer would give the credit to its excellent seaport, the Asia-Pacific Gateway, its industry diversity with more
focus on the service-oriented tourism and movie industry and less on resources
other than the lumber industry.
IV.
Conclusion
Though Saskatchewan is now
leading the prairies, its real economic growth is getting slower than the
previous years. Moreover, BC, a province not as rich in resources and not as
big in export, is doing much better than SK. A clear goal, wise governance and
oversight, a solid multi-sector and multi-client strategy and implementation
plan are necessary for another economic take-up.
2019年：萨斯喀切温省将走向何方？
摘要：美国、中国和巴西的强劲经济增长将推动萨省在油田、钾肥矿和农业的增长。萨斯喀彻温省的经济增长正在引领大草原。虽然依然依赖于资源，萨斯喀彻温省可以启动移民杠杆，鼓励更多的技术创新和管理变革。 2018年，萨斯喀彻温省对中国的出口增长了31.1％。由于中国是萨斯喀彻温省的第二大进口国，而中国在2018年的出口增长最快，中国可能在萨斯喀彻温省的经济中扮演着越来越重要的角色，尽管中加关系不好可能会给萨斯喀彻温省带来巨大风险。虽然萨斯喀彻温省在草原拥有领先地位，但它的实际经济增长速度却比前几年要慢。此外，卑诗省是一个资源并没有萨省丰富且出口也没有萨省大的省份，其业绩远远超过萨省。实施另一个经济起飞需要一个明确的目标、明智的治理和监督、坚实的发展战略和良好的实施计划。
关键词：增长模型，出口，移民，中国
关键词：增长模型，出口，移民，中国
[i] Think-tank predicts Sask. economy will lead the prairies in 2019, CBC
News, Feb 28, 2019, https://www.cbc.ca/news/canada/saskatoon/saskatchewan-economy-2019-experts-1.5037122.
[ii] Paul Ferley: Saskatchewan – Bumpy Road Ahead, RBC Provincial Outlook, Dec
2018, please view the online article by clicking the following clink
[iv] Bianyuanjun: Why would China use canola oil to boycott Canada (in
Chinese)? March 6, 2019, https://info.51.ca/news/canada/2019-03/746392.html.
[v] Robin Wiebe: Saskatoon and Regina Economic Outlook 2019: After the Boom,
Beyond the Bust, the Conference Board of Canada, Nov 6, 2018, please also see
the article by clicking https://www.conferenceboard.ca/e-Library/abstract.aspx?did=9883.
[vi] Think-tank predicts Sask. economy will lead the prairies in 2019, CBC
News, Feb 28, 2019, https://www.cbc.ca/news/canada/saskatoon/saskatchewan-economy-2019-experts-1.5037122.
[vii] Paul Ferley: Saskatchewan – Bumpy Road Ahead, RBC Provincial Outlook, Dec
2018, please view the online article by clicking the following clink
[viii] Murray Mandryk: Mounting bypass problems bring credence to its critics,
Leader Post, June 27, 2018, please also take time to read the article by clicking
the following link: https://leaderpost.com/opinion/columnists/mounting-bypass-problems-bring-credence-to-its-critics.
[ix] Sask. spending down in 2018, but economic rebound expected in 2019, 2020,
Saskatoon StarPhoenix, Jan 22, 2019, please also see the article by clicking
the website https://thestarphoenix.com/news/local-news/sask-spending-down-in-2018-but-economic-rebound-expected-in-2019-2020.
