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REGINA, June 25, 2009 – The
Saskatchewan economy has been a pillar of relative strength during this
recession, thanks to a diverse commodity mix, capital investment and
resurgent population growth, according to the BMO Capital Markets Economics
Provincial Outlook report.
“Real GDP will likely expand 0.4 per cent this year, the only
province in Canada to see growth,” said Robert Kavcic, Economist,
BMO Capital Markets. “This will be followed by a 1.9 per cent expansion
in 2010.”
While other Western
provinces have been hard hit by last year’s
commodity price decline, Saskatchewan’s diverse mix – including
oil, uranium, potash and other agricultural products – has helped
it weather the downturn. Still, potash output was down a hefty 55 per
cent in the first quarter amid slowing global demand and a bid by major
producers to support prices. Meantime, the province’s energy sector
enjoyed a boost in the past two years thanks to a relative cost advantage
over Alberta (where royalties were increased and labour markets were
exceptionally tight), but that advantage is poised to shrink as costs
in Alberta come down.
“For the past two years, Saskatchewan’s hottest commodity
has been people, with the province netting more than 13,000 interprovincial
migrants since the start of 2007, and population growth rising above
2 per cent year-over-year for the first time since the 1970s,” according
to Kavcic. “This has helped domestic demand and housing markets
outperform, despite recent softening. Still, Saskatchewan is the only
province yet to see job losses this recession—employment stood
at a record level in May.”
The Province of Saskatchewan is projecting its 16th consecutive year
of black ink. The fiscal 2009/10 surplus is pegged at $425 million with
only a modest $9 million net transfer from the Growth and Financial Security
Fund. The Province has announced $1.5 billion in infrastructure spending
this fiscal year, which at about 3 per cent of GDP will help support
the recovery.
The complete report can be found at www.bmocm.com/economics.
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