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Old Posted Dec 27, 2007, 2:21 AM
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A feel good article - Sask. economy anything but flat

Sask. economy anything but flat
Optimism the rule for province in 2007
Derek Abma, CanWest News Service
Published: Wednesday, December 26, 2007

OTTAWA -- When a good number of Canadians think of Saskatchewan, they think of things like farms, flat highways and the TV show Corner Gas, the theme song for which implies there's "not a lot goin' on" in that province.

However, it happens to be home to one of the hottest economies in country, with GDP booming, arguably the most in-demand residential real estate in Canada, and petroleum reserves that are starting to look good to oil tycoons put off by pending royalty hikes in Alberta.

"The mood is good, business is good, it's a great place to be at a great time," boasts Steve McLellan, CEO of the Saskatchewan Chamber of Commerce, who points out that, along with everything else, it's home to the Grey Cup-winning Saskatchewan Roughriders.

Economic growth, in some of its manifestations, is not always apparent to the people who surround it. But one thing that is evident in Saskatchewan, McLellan says, is a change in people's attitudes over the last few years.

"It's a very positive environment here right now," he says. "Our cities are growing. Our civic leaders are optimistic about the future. Business is good just about across the board, from retail to resources. And people are generally in a good mood, and that's a good thing."

The Conference Board of Canada was tracking Saskatchewan's economic growth this year to amount to 4.3 per cent, second only to Newfoundland and Labrador's 6.8 per cent.

Benjamin Tal, senior economist with CIBC World Markets in Toronto, categorizes Saskatchewan as the "hottest province." He says the projection for Newfoundland's growth "doesn't count" because it is measured against relatively light activity and narrowly based on output from the oil industry.

The Canadian Real Estate Association was projecting the number of existing homes in Saskatchewan sold through the the Multiple Listing Service (MLS) to rise 33.7 per cent this year for 12,220 transactions, the biggest proportional growth in the country. Prices were forecast to rise 17.4 per cent for an average of $155,000, second only to Alberta's 24.6 per cent growth.

Tal says Saskatoon is the strongest local real estate market in the country. The average resale price in November there was $251,202, according the local real estate board, which was up 50 per cent from a year earlier.

The most recent Statistics Canada jobs report put Saskatchewan's unemployment rate at four per cent. The only province lower was Alberta at 3.6 per cent. Canada's overall jobless rate -- 5.9 per cent and just 0.1 point up from a 33-year low -- is nearly two points higher than Saskatchewan's.

There's myriad of numbers out there that tell a story about what's happening in Saskatchewan. But McLellan says no number is as telling as the province's population.

Statistics Canada's latest figures put Saskatchewan's population at more than one million as of Oct. 1. It has the highest rate of population growth in the country, and that marks a reversal in trends. The latest census, based on data taken in 2006, put Saskatchewan's population at 968,157, which was down 1.1 per cent from five years earlier.

McLellan finds irony in the idea of Corner Gas -- a TV show set in a small town where ATMs and cellphone reception are novelties -- being a mental benchmark for some on what Saskatchewan is.

"(The show) is a good example of both the old image and the new Saskatchewan," he says. "There's a million people a week who see that show, and it's a demonstration of the strength of the movie-and-television production (in Saskatchewan)."

Other TV shows produced in the province include Little Mosque on the Prairie, Moccasin Flats and Renegade Press.

But the big story in Saskatchewan is of natural resources. There's a thriving petroleum industry, as evident in the record $250.3 million the provincial government reaped this year though sales of Crown land for oil and gas purposes.

"Largely, our recent boom is fuelled by the oil and gas industry," says Lyle Stewart, the province's enterprise and innovation minister.

Mining is a big part of it also. The province happens to be home to the world's biggest producer of of fertilizer, Potash Corp. of Saskatchewan Inc. Potash, nitrogen and phosphate are its main materials.

PotashCorp recently announced a $1.8-billion expansion of its mining and milling operations in Rocanville.

Saskatchewan is also home to Cameco Corp., the world's largest publicly traded uranium firm.

And the province's more traditional agricultural industry is experiencing a resurgence as global grain prices skyrocket. Tal notes that demand for ethanol as a seemingly earth-friendly fuel alternative or additive has created another dimension of demand for farm-grown resources meant, until recently, primarily for food purposes.

"Global demand for grains is at an all-time high and supply is at an all-time low," Tal says.

Similarities to Alberta are plenty, with both reaping the benefits of a world getting hungrier for oil and gas. As well, you have the economic centres in two main cities; Regina and Saskatoon in Saskatchewan, and Edmonton and Calgary in Alberta.

The population of Alberta is more than triple that of Saskatchewan, but some say it's conceivable that, decades from now, that gap could be close to erased. McLellan notes that Saskatchewan had a larger population than Alberta in the 1940s, but the latter's subsequent oil boom changed things dramatically.

Stewart declines to criticize Alberta's government for its decision to raise oil-and-gas royalties. But he says his government has no plans to do the same, and adds that there could be more oil and gas activity going to Saskatchewan as a result of Alberta's decisions on royalties.

Stewart says if there's a lesson to be learned from Alberta, it's that a provincial government needs to keep pace with population growth with appropriate investments in infrastructure such as roads, hospitals and schools.

"We will have the advantage, if we follow in (Alberta's) footsteps, of hindsight," he says. "And we hopefully will be able to handle the infrastructure demands maybe better than Alberta did, (and) maybe some of the environmental issues because of new technology. . . . We're a blank slate."

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Old Posted Dec 27, 2007, 8:40 AM
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I think Saskatchewan can learn lots from the mistakes made in Alberta. Hopefully the province will be able to stay ahead of demand for services instead of trying to play catch up.
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Old Posted Dec 27, 2007, 1:19 PM
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Originally Posted by Dalreg View Post
I think Saskatchewan can learn lots from the mistakes made in Alberta. Hopefully the province will be able to stay ahead of demand for services instead of trying to play catch up.
I think this is easier said than done....If Sask gets an influx of people, you dont thnk their services will lag?? At one point, Calgary was increasing by 2500 people per month...Thats almost the size of Moose Jaw in one year....You dont think that will put pressure on housing, services and such?? Judging by the article, a 33% increase in housing prices vs the expected 17% tells me there is pressure...
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Old Posted Dec 27, 2007, 9:33 PM
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All I'm saying is Saskatchewan has the benefit of seeing Alberta going thru this situation. If the Government has any sort of competence they will hopefully be able to make the best of the situation and keep things from getting out of hand.
I would rather see controlled moderate growth over all out over inflated runaway money grabbing Alberta style growth.
We have a chance to do it right here. Notsaying we will do it right, but we have the chance!
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Old Posted Dec 27, 2007, 11:31 PM
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Originally Posted by Dalreg View Post
All I'm saying is Saskatchewan has the benefit of seeing Alberta going thru this situation. If the Government has any sort of competence they will hopefully be able to make the best of the situation and keep things from getting out of hand.
I would rather see controlled moderate growth over all out over inflated runaway money grabbing Alberta style growth.
We have a chance to do it right here. Notsaying we will do it right, but we have the chance!
They should try the method of "build it and they will come"...No better time to get roads and other infrastructure going before the people show up...IF they come, all the better, if not, then at least housing and such will be priced lower...I keep looking at houses in Regina and they sure arent cheap anymore...Especially if there isnt enough work to go around in certain industries...
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Old Posted Dec 28, 2007, 1:36 AM
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Quote:
Originally Posted by yeeg View Post
I think this is easier said than done....If Sask gets an influx of people, you dont thnk their services will lag?? At one point, Calgary was increasing by 2500 people per month...Thats almost the size of Moose Jaw in one year....You dont think that will put pressure on housing, services and such?? Judging by the article, a 33% increase in housing prices vs the expected 17% tells me there is pressure...
2500 people per month? Damn, that's twenty-seven times greater than the monthly growth rate for Saskatoon (city), or 2500 vs 91 people per month using the 2.8% overall increase from 2001 to 2006 (assuming a constant growth rate for all 5 years or 60 months).

Makes one wonder what kind of increase is manageable?



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Old Posted Dec 28, 2007, 2:41 AM
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Originally Posted by SASKFTW View Post
2500 people per month? Damn, that's twenty-seven times greater than the monthly growth rate for Saskatoon (city), or 2500 vs 91 people per month using the 2.8% overall increase from 2001 to 2006 (assuming a constant growth rate for all 5 years or 60 months).

Makes one wonder what kind of increase is manageable?
It was nuts...Another time, I remember the news saying that there were 100 more cars per day hitting the streets...I would guess that this takes into consideration people migrating to Calgary along with current residents buying more cars...

2500 per month is 30,000 per year which works out to be just over 3% increase YoY...ITs nice to see but manageable is another story...
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Old Posted Dec 28, 2007, 3:42 PM
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Originally Posted by yeeg View Post
They should try the method of "build it and they will come"...No better time to get roads and other infrastructure going before the people show up...IF they come, all the better, if not, then at least housing and such will be priced lower...I keep looking at houses in Regina and they sure arent cheap anymore...Especially if there isnt enough work to go around in certain industries...

Don't cry to me about housing prices in Saskatchewan. I never bitched when prices in Calgary or Alberta were booming. Seems to me the only reason you would look to move to Saskatchewan is to make a quick buck. Guess what it won't happen.
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Old Posted Dec 28, 2007, 4:02 PM
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Don't cry to me about housing prices in Saskatchewan. I never bitched when prices in Calgary or Alberta were booming. Seems to me the only reason you would look to move to Saskatchewan is to make a quick buck. Guess what it won't happen.
Not bitching about the housing prices...I think its good for everyone if prices were high as housing is a major economic indicator...I spent 25 years in Regina and would move back again if the conditions were right...

Like I said before, the major reason I am not moving back to Regina is the immediate 60% pay cut with the same company, same position...
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Old Posted Dec 29, 2007, 12:25 AM
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Not bitching about the housing prices...I think its good for everyone if prices were high as housing is a major economic indicator...I spent 25 years in Regina and would move back again if the conditions were right...

Like I said before, the major reason I am not moving back to Regina is the immediate 60% pay cut with the same company, same position...
60%? Either your overpaid in current job or Regina has no demand for your skills.

Last edited by Dalreg; Dec 29, 2007 at 2:44 AM.
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Old Posted Dec 29, 2007, 1:06 AM
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In case you missed it...

Brace yourselves, best of boom still to come
Murray Lyons, The StarPhoenix
Published: Friday, December 28, 2007

A couple of weeks ago, Greg Yuel of PIC Investments Ltd. was the keynote speaker at a Yuletide business luncheon in support of Junior Achievement, an annual event now sponsored by the chamber.

Or to be more formal, it was an event sponsored by the Greater Saskatoon Chamber of Commerce. More on that later.

Yuel, having taken over relatively recently as president and CEO of the family-held industrial conglomerate, does his father Jim proud in a number of areas, including being a plain speaker.

And what I mean by that is Yuel the younger did not "dumb down" a speech, just because there was a high school student at every table among the business crowd. Rather, it was refreshing to hear somebody speak about business and entrepreneurship without "synergistic" business jargon.

In an era when parents over-manage their kids' activities, it was nice to hear Yuel recall fondly the early days of his parents' move into entrepreneurship when he and his sister would play hide-and-seek in the warehouse on Saturdays while his parents caught up on orders. Nowadays, somebody would probably phone the Workers Compensation Board or child and family services if they heard about that.

No doubt there will be more than one Junior Achiever taking Yuel's enthusiasm to heart and starting a business for themselves sometime in the next decade.

And what a decade it could be.

Yuel's message to the business crowd and the young achievers was that we may have thought we were already in a boom, but people in Saskatchewan don't know what a boom is -- the boom is still to come.

To get perspective on what he meant, it makes sense to look back to see the future.

Kent Smith-Windsor of the chamber likens the era we are entering now to another time in the city's history when Saskatoon saw pedal-to-the-metal growth.

In 1961, the city's population was 95,526. In itself, that was an impressive doubling from the post-war (1946) figure of 46,028. In the next decade, however, Saskatoon would see growth and investment decisions that helped create the city we see today. In the 10 years leading to 1971, the population grew to 126,450, a rise of 32 per cent in one decade.

It was the era in which Saskatoon's greatest mayor, Sid Buckwold, helped bring a concert hall to the downtown, moved the rail yards out of the heart of the city and helped lure the retail investment that is Midtown Plaza -- still the reason why Saskatoon has a fairly vibrant downtown that can survive big boxes in the suburbs.

What drove the growth 45 years ago was a combination of things. First, there was the emergence of the potash industry in nearby central Saskatchewan. Wheat, the crop that built Saskatchewan, was enjoying one of its rare heydays as the government backed massive sales to Russia and China. The oil industry activity to the west in the Kindersley area brought some work to the city's then-developing machining industry.

No wonder the city adopted the now quaint-sounding "P.O.W. City" marketing moniker to push the Potash-Oil-Wheat connection. (You will note uranium wasn't really on the city's radar in the 1960s.)

Fast forward to today and a similar resource boom is taking place. There are so many potential resource plays underlying our recent economic expansion that trying to fit all the words into a new acronym -- potash, uranium, diamonds, heavy oil, bitumen and (surprisingly) wheat -- is a wordsmith's nightmare.

Amid all the resource growth, pure-knowledge companies are also emerging and surviving like VCom Inc., riding the world's boom in broadband communications.

If the original resource boom of the 1960s is duplicated and 30 per cent growth is in the cards, the city's population could be anywhere from 250,000 people to 275,000 people depending on whether you pick the middle of the next decade or 2021.

And who knows how big the metropolitan census area of Saskatoon will be? It could be 300,000 to 350,000 when one includes all the towns that used to be tiny farm service centres and are now growing bedroom communities such as Osler, Martensville and Warman -- not to mention Aberdeen, which some are saying could be the next Martensville.

One of the reasons Smith-Windsor urged his chamber board a few years back to rename itself to Greater Saskatoon Chamber of Commerce was to embrace the idea that Saskatoon is a larger regional entity. He argues wisely that it would not be a good thing if Saskatoon and the towns nearby become a smaller version of Edmonton where people from the big city and the satellite towns don't always work in unison.

In the meantime, Greg Yuel's message to a combined audience of businesspeople and the next generation of businesspeople is a timely one. We could be on the cusp of an historic growth era.

To paraphrase Yuel, we all need to be "smart enough to embrace" the coming boom.

mlyons@sp.canwest.com
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