Recently a delegation from the Governor General’s Canadian Leadership Conference was in New Brunswick and I got a chance to sit down with them to discuss economic, demographic and social trends in the province. During that discussion, the delegate from Saskatchewan made a heartfelt speech about the dramatic economic changes in her home province and how this has changed not only the economy but how people feel about their communities and their province. She said places like New Brunswick should look to Saskatchewan as an example of the possibilities.
It’s hard to understate the monumental economic shift that has taken place in Saskatchewan mostly as a result of the growth in the province’s non-renewable natural resources sector.
In large part because of a substantial increase in royalty revenues, Saskatchewan as gone from a have-not province in the mid-1990 to one of the few ‘have’ provinces in Canada (not requiring equalization payments from the federal government).
According to RBC Economics, Saskatchewan was the only province in Canada to maintain a provincial government budget surplus through the recent recession. In addition, the province’s net debt to GDP ratio dropped from 34 per cent in 1994 to less than 5 per cent in 2012.
Beyond the impressive impact on the provincial books, the economic boom in Saskatchewan is translating into big gains for workers in the province. New Statistics Canada data based on income tax filings shows that average employment income in the province rose by 60 per cent from 2000 to 2010. This was the fastest growth rate of any province in Canada including Alberta.
The good times in Saskatchewan are fostering more wealth generation too. The amount of personal investment income declared by residents of Saskatchewan on their tax forms in 2010 was up by 93 per cent over 2000. The investment income growth rate was second only to Alberta among the 10 provinces across the country.
It is also interesting to note the impact on the province’s most vulnerable population. While there are limitations to the depth of analysis from this data source, we do know that the number of persons in Saskatchewan claiming social assistance income dropped by 11.5 per cent from 2000 to 2010 compared to an 8.9 per cent rise across the country. At the same time, the average amount of income reported by social assistance recipients rose by 61 per cent – more than three times faster than the country as a whole.
It looks like the government is ensuring that at least some of the proceeds from the economic boom are bolstering the province’s social safety net.
Based on what is happening in Alberta, Saskatchewan and Newfoundland and Labrador it is no wonder other provinces are putting more focus on non-renewable resources development. Ontario Premier Dalton McGuinty is putting a renewed focus on the Ring of Fire and Quebec’s Plan Nord is an ambitious plan to develop its resources in Northern Quebec. A dramatic increase in natural gas production is a key part of British Columbia’s Jobs Plan. New Brunswick and Nova Scotia both have considerable natural gas resources that could be unlocked using new extraction techniques. Exploration is already underway in New Brunswick.
The old saying “If you can’t beat them, join them” seems to fit the current situation in Canada. Saskatchewan, Alberta and Newfoundland and Labrador are outperforming the rest of the country across the board and the rest of the provinces want it.
David Campbell is an economic development consultant and columnist based in Moncton, New Brunswick. He also authors a daily blog on economic issues in Atlantic Canada which can be found at www.davidwcampbell.com.