Like the roughriders, the Canadian Football League team, Saskatchewan\u2019s economy should have been tops in the country for the past two years. As luck would have it, the \u2019Riders came up short in two consecutive Grey Cup games; and the team\u2019s home province finished in the middle of the pack in gross domestic product growth in 2009 and \u201910.
But hope springs eternal in Next Year Country. The \u2019Riders hope to drink from Earl Grey\u2019s mug this November, and Saskatchewan\u2019s government is predicting the provinces\u2019s economy will lead the nation in 2011. And all the signs are pointing to better than average, possibly nation-leading
economic growth in 2011.
Still, Saskatchewan began each of the past three years expecting to lead the nation, only to be thwarted by a combination of poor crop-growing conditions in 2010 and plunging potash production and prices in 2009. Only in 2008 did Saskatchewan\u2019s economy live up to expectations, led by record-setting prices for potash, oil and agricultural commodities.
Many economists believe the stars are aligning for Sas-kat-che-wan this year. The province\u2019s final news release of 2010 predicts that Saskatchewan\u2019s economy will lead the nation in 2011: \u201cSaskatchewan\u2019s economy is expected to increase by an average of 3.7% next year, well ahead of the 2.4% forecast for the national average.\u201d
Most economists are bullish on the province\u2019s prospects in 2011, with all but one of nine economic forecasters picking Saskatchewan to rank first in 2011.
But these bold predictions are eerily similar to those made by the province in each of the past two years. \u201cSaskatchewan is forecast to start the next decade with the strongest economic growth in the country in 2010,\u2019\u2019 said then-Enterprise Minister Ken Cheveldayoff in December 2009.
But Saskatchewan not only didn\u2019t lead the nation in economic growth in 2010, it lagged the national average.
But there\u2019s every reason for confidence in the future, with Saskatchewan expected to perform well in 2011 after its middling performance of 2010. Last year saw Saskatchewan post record-high population numbers; the province also has the country\u2019s fastest-growing population, the second-lowest unemployment rate, among the fastest-growing wage rates and the second-highest growth in building permits and housing starts in Canada.
But Saskatchewan\u2019s GDP growth was dampened \u2014 literally \u2014 by excessive rains during the growing and harvesting seasons, reducing both the quantity and the quality of the 2010 crop. Statistics Canada estimates production of the three major crops (wheat, canola and barley) fell by 28% in 2010. And the Conference Board of Canada <\/b>projects the impact of the flooding on Sas-kat-chewan\u2019s econ-omy will be two percentage points, restricting GDP growth to 1.2%.
By contrast, Royal Bank of Canada<\/b> pared its overly optimistic forecast for Saskatchewan\u2019s GDP growth in 2010 from 6.3% in September to a still strong 4.5% in December.
Undaunted, RBC now confidently predicts that Saskatchewan will lead the provinces in 2011, with real GDP growth of 5.3%. While RBC economists remain the most confident about Saskatchewan\u2019s prospects in 2011, even the Conference Board of Canada is projecting a robust 4.4% increase in GDP, while Bank of Montreal<\/b> is predicting an even 4%. Other forecasters, including those with Bank of Nova Scotia, Canadian Imperial Bank of Commerce<\/b> and Toronto-Dominion Bank<\/b> are projecting around 3% GDP growth.
Most economists cite the continued recovery in the potash and oil and gas sectors for Saskatchewan\u2019s rebound in 2011. RBC cites a 150% increase in potash production in the first three quarters of 2010 vs a 66% decline in 2009.
Despite the rejection of Australia-based BHP Billiton Ltd.\u2019s $40-billion hostile takeover of Potash Corp. of Saskatchewan Ltd. by Ottawa in late 2010, resource investment had continued unabated. For example, Europe\u2019s K+S Group recently agreed to purchase Potash One, a Vancouver-based junior with undeveloped assets near Regina for $434 million.
Agriculture also is expected to bounce back from an estimated 17% decline in production in 2010, according to RBC, to a 12% increase in 2011.
On the fiscal side of the ledger, Saskatchewan has recovered from last year\u2019s unanticipated plunge into the red ink, with a projected $137-million surplus in its general revenue fund for fiscal 2010-11, thanks largely to stronger resources revenue. This results in a projected surplus of $68.5 million after the transfer of half the general revenue fund surplus to the growth and financial security fund, the province\u2019s \u201crainy day\u201d fund.
But on a summary financial basis, which includes Crown corporations, Saskatchewan is projecting a deficit of $325.6 million in fiscal 2010-11 \u2014 almost half of the $622.7-million deficit projected in last spring\u2019s budget. \tIE<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"
With commodities in demand, a rising population and foreign investment interest still strong, the province of wheat, potash and oil is poised for a prosperous future<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3013,3130],"tags":[2616,3197],"yst_prominent_words":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/316790"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=316790"}],"version-history":[{"count":1,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/316790\/revisions"}],"predecessor-version":[{"id":362054,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/316790\/revisions\/362054"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=316790"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=316790"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=316790"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=316790"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}