Not so fast

University of Saskatchewan professor warns economy not as golden as others claim

Tannara Yelland
CUP Prairies and Northern Bureau Chief

SASKATOON (CUP) — In the wake of reports about Saskatchewan’s recent economic and population growth, a University of Saskatchewan professor cautions that the numbers are not as impressive as they may seem.

The Conference Board of Canada predicts Saskatoon will lead the country in economic growth from 2011 to 2015, with Regina coming in third. Vancouver is expected to have the second-fastest-growing economy.

This is a rare position for Saskatchewan cities to be in, as Saskatchewan only recently claimed the title of being a “have” rather than a “have-not” province.

In an Oct. 25 op-ed published in the Saskatoon StarPhoenix, Saskatoon Mayor Don Atchison claimed “the prosperity and strong economic growth Saskatoon is now experiencing are here for the long term. The forces are aligned to continue to build Saskatoon’s success for at least the next 25 years. That’s not just wishful thinking, but is an economic fact.”

U of S economics professor Eric Howe mentioned Atchison’s article with a small laugh.

“There’s no such thing as an economic fact,” he said.

“The boom [Saskatchewan is experiencing] is happening for a really straightforward reason. Saskatchewan is experiencing a resource boom.”

Saskatchewan is rich in natural resources, from potash to oil. It is also a major contributor to Canada’s status as the single-largest-uranium-supplying country; Saskatchewan alone supplies almost one-third of the world’s uranium, according to the Government of Saskatchewan website.

When these resources are in demand or expensive, Saskatchewan sees an influx of money, jobs, and people. All of that is happening right now, and has led many people, including Atchison, to declare the era of a prosperous Saskatchewan. But Howe said this has all happened before.

“Saskatchewan is subject to these resource booms,” he said, citing the mid 1970s, when the price of wheat rose drastically, as well as the petroleum boom of the late ’60s.

“One of the constants of these booms is lots of people will say they’re going to last forever. But they don’t. The word ‘boom’ is followed by ‘bust,’ and that’s what happens.”

Population booms often go hand-in-hand with economic growth, and Saskatchewan has seen that in this most recent boom as well. However, despite the fact that immigrants are currently looking at Saskatchewan as a place to live alongside larger, more populous areas, Howe said this too will pass.

“People move here for jobs,” he explained. “When the jobs go away, the people go away too.

“Reading in the media right now, you’d think the gates had opened and that immigrants were coming to the province in great numbers.

Saskatchewan’s share of Canada’s population was 3.02 per cent before this boom. It has now gone up to 3.04 per cent.”

Jeff Lindgren, planning and policy manager for the Saskatoon Regional and Economic Development Agency, disagreed with Howe’s diagnosis.

“I’m not as solid on the long-term projections,” Lindgren said, referring once again to Atchison’s rosy view. “But definitely over the short term, say the next five years, the Conference Board of Canada has us expected to add just about 30,000 people to the Saskatoon [metropolitan area] and we do see that continuing into the future.”

Lindgren explained that while he could not comment on the specifics of potash and other resource projects since he does not work in those industries, he believes many of the projects currently beginning are “definitely very long term, and they’re typically very stable projects.”

But Howe says even here, the seemingly good news does not necessarily translate into jobs and money for people on the ground.

“Resource sectors like potash are extremely labour-intensive when they are expanding, but extremely, extremely capital-intensive when they are operating.”

In other words, after the initial construction phase for such projects, the influx of people who came to Saskatchewan for better job prospects could find themselves out of work yet again. When that happens, there is no guarantee they will stay in Saskatchewan.

“We have a really good quality-of-life package here,” Lindgren offered as a counter. “We have a number of things to offer people.”
Lindgren noted air quality, public spaces, and a diverse economy as reasons people will want to put down roots in Saskatchewan even if the current economic boom slows. But Howe’s parting words provided a strong second opinion.

“Why is it that people only move here if they have good jobs available?” he asked. “Well, come February, that will be kind of obvious.”