Saskatchewan economy growing, but is it booming?
GDP lagging behind neighbouring provinces, new data shows
Saskatchewan may not be growing as fast as people might like to think.
New numbers from Statistics Canada show the province's gross domestic product — considered the statistical measure of the economy — did not grow as much as the GDP in Alberta or Manitoba in 2012.
While Saskatchewan's real GDP is still higher than the national average, it only grew by 1.9 per cent last year, while Manitoba's real GDP increased 2.6 per cent and Alberta's went up by 3.8 per cent.
Saskatchewan's manufacturing sector, in particular, is lagging behind.
Ross Fraser runs the largest fabrication facility in the region, Supreme Steel Saskatoon. He said his company is competing for contracts against firms in other provinces that are upgrading their facilities, purchasing equipment and training new employees with the help of subsidies from provincial governments.
Fraser said that makes the playing field unfair, especially when everyone is vying for the same contracts.
"We're almost paying our tax money into a pool that is going to some of the transfer payment have-not provinces," Fraser said. "That money is almost coming back to make it almost — well it is — unfair competition," he added.
Rose Olfert is an economist with the Johnson Shoyama Graduate School of Public Policy in Saskatoon. She says the numbers are an expected symptom of the province's growth spurt.
"We have to recognize, that if we have just been through a really high peak, that cannot be maintained really," Olfert said."So it's almost inevitably going to have to be a lower rate of growth the next round because we have a larger base."
Erin Weir, an economist with the United Steelworker's Union in Ontario, has ties to Saskatchewan and political ties to the province's NDP.
Weir said that although Saskatchewan may not have gone from boom to bust, its economy has hit a plateau.
"The risk with these resource booms is that they can turn to a bust if commodity prices fall," Weir explained, "and we've already seen some real weakness in potash prices."
"I think Saskatchewan has now settled down to a more moderate pace of growth," Weir said, adding that is "hardly surprising given that the growth we had was largely based on these increases in commodity prices which no one really expected to go on forever."
However, manufacturers such as Ross Fraser are feeling the pinch, and he said he has been forced to make cuts as a result.
Supreme Steel Saskatoon has gone from 90 shop employees to 45 over the past 18 months.