Saskatchewan’s economy has gone through a shaky couple of years, but the Conference Board of Canada predicts the province will be back in the black this year.
In their winter report, the Conference Board estimates Saskatchewan’s GDP will grow by 0.9 per cent, primarily driven by a strengthening oil sector.
“One of our largest producers, Crescent Point, has indicated that they’re going to be investing over $1.1 billion in capital; about 80 per cent of that’s going to be spent in Saskatchewan,” Energy and Resource Minister Dustin Duncan said.
“Other companies have also indicated that they’re going to be returning to Saskatchewan in a pretty big way.”
However, other key industries like potash and uranium are not expected to see the same kind of rebound. Low commodity prices in those two sectors are expected to challenge producers.
The Conference Board also predicts it will be at least another year before consumers start noticing the effects of an economic recovery. They forecast that inflation will once again outpace wage growth, limiting disposable income.
Jeff MacPherson, Factory Optical’s chief operations officer, said this means he and his peers will need to be creative in an effort to serve customers and maintain profits.
“If they need new lenses then we’re doing some initiatives that way to help them put new prescriptions in product that they have so that they can get by until an economic turn or benefits kick back in,” he explained.
There is some positive retail news, however. The province released the December retail numbers Wednesday, and they show a 3.5 per cent increase year-over-year.
In the meantime, MacPherson said he and other retailers are awaiting the release of the provincial budget on March 22 to see if there are any changes to things like the PST or other taxes.
While decisions in the provincial budget can impact retail and other industries, business commentator Paul Martin said that it’s important to remember the government does not control the economy.
“The government we have to remember is not the economy. The numbers the government is reporting are what happened in the economy about 12 or 18 months ago,” he said.
Martin added that the Conference Board’s forecast is in line with estimates published by other firms. He said it helps that oil companies are figuring out ways to turn a profit with prices between $40 and $60 per barrel, and this is something they need to get used to.
“It would be hard to say we’ll ever get back to where we were five years ago. That was the absolute pinnacle. Those were exceptionl performance years,” Martin said.
“They were the aberration, so this is a bit more what we would consider normal around here.”
Regina Mayor Michael Fougere touted the city’s economic growth in his annual state of the city address on Thursday, despite an uncertain provincial economy.
“We’re the fourth fastest growing city in Canada right now. They’re coming here for a reason. They’re coming for the jobs, the quality life, the investment, the opportunities,” Fougere said.
As for the Conference Board report, Fougere is taking a wait and see approach.
“Predictions are one thing, but what actually happens is quite another,” he said.
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