Saskatoon: Canada’s Fastest Growing Economy

What economic elements are contributing to Saskatoon's growing economy?

Saskatoon: Canada’s Fastest Growing Economy.

The City of Saskatoon is favoured once again to be one of the fastest-growing economies across Canada, according to a 2013 The Conference Board of Canada report.50 The report is the Conference Board’s annual review of 28 metropolitan areas in Canada.

The expanding job market in Saskatoon is attracting both domestic and foreign applicants, which are growing the housing, retail, and other sectors of the economy. For example, this year Saskatoon’s gross domestic product is expected to grow by 3.7%, which is significantly higher than the estimated national average.51

How is Saskatoon’s economy growing? According to the The Conference Board of Canada, “Saskatoon is benefiting from strong resource development, while healthy popula- tion growth is bolstering the housing market.” About $10 billion in mining development and expansion has already been invested in the province.52 Indeed, Saskatchewan has numerous natural resources, such as potash, oil, and uranium.53

Tim LeClair, chief executive officer of the Saskatoon Regional Economic Development Authority (SREDA), is also proud of how other sectors are making important contributions to   Economic Growth

“We have to give credit to other sectors of the economy which aren’t related to the resource sector, including manufacturing, agriculture, transportation and com- munication,” stated LeClair.54

The agriculture sector is a natural strength. Saskatchewan has six different soil zones and over 40% of Canada’s arable land. According to the Ministry of Agriculture, the indus- try produces feed and forage, cereal crops, oilseeds, pulse crops, and some speciality crops.55

Saskatchewan has other strengths in agriculture, too. Did you know that Saskatchewan produces the majority of Canada’s wild rice? Saskatchewan also produces over 70% of Canada’s flax and over 80% of Canada’s mustard. And let’s not forget that Saskatchewan supplies 5% of the world’s exported wheat.56

In the manufacturing industry, many local companies are making machinery, wood products, transportation equipment, plastics, and food and beverages. This, in turn, has led 85% of firms to be able to export their goods outside the province, impacting the transportation and distribution industry favourably.57

“One only has to look at the automotive in Saskatoon. When you see the level of activity here, it’s a very basic barometer of the economy,” says LeClair. In fact, there is a 12.2% increase in new car and truck sales in the province.58

In addition to Saskatoon having the fastest-growing economy, it also ranks as Canada’s fastest-growing city. According to Statistics Canada, Saskatoon’s population grew by 3%, or 7,200 residents, between 2009 and 2010. Its population is estimated to be 265,300. International immigration into the province is a leading factor for its growth—over 50% of its population increase is due to new families immigrating to Canada. These families are also making Saskatoon one of Canada’s youngest cities. Saskatoon’s median age is currently 35.4 years, compared to the national median of 39.7 years.59 This means the majority of its population is of working age.

What non-economic or other related factors are contributing to Saskatoon's growing economy?

Clearly, having a large number of working residents translates into lower unemploy- ment rates, and Saskatchewan maintains one of the lowest unemployment rates in the country. According to Statistics Canada, the August 2011 unemployment rate was 4.5%, the lowest in the country. Saskatoon’s unemployment rate was slightly higher at 5.1%, but still much lower than the country’s 7.3% average.60

One reason for the low unemployment rate is the growing number of entrepreneurs. Each year, approximately 1,000 licences are issued to new small businesses. The resource sector is an important employer, too. Mining companies continue to recruit engineers with salaries at $150,000 and up.61 Good-paying jobs help consumer spending and keep business sales up.

Home construction is also growing fast. In the first six months of 2011, new housing increased by 38%. “Housing is a critical component of the economy,” says LeClair. “We have to make sure that we have adequate housing for people to come and take positions in Saskatoon. That’s an important part of the equation.”62

Industrial and commercial construction is of course a direct result of business growth. Vacancy rates for the commercial real estate market are at record lows, including industrial, office, and retail space. Similarly, new office tower construction is on the increase from business expansion.

In the past, Canada’s resource sector has gone through “boom and bust” phases. So, can Saskatoon’s economy realistically be sustained?

SREDA recognizes that Saskatoon’s economy is experiencing significant growth mainly because of the mining industry. “In 15 years, when all of these capital expenditures are done, do we want to go back to the slow growth of the 1980s and start exporting our kids to other provinces again? I was a product of that export market. We want to sustain our economy over the long term. We have to get it right,” says LeClair.63

To encourage long-term economic growth, SREDA has developed a number of initia- tives to address existing challenges faced by business and to encourage a sustainable econ- omy. One project involves analyzing issues facing the region’s labour market. “When a company looks at setting up operations in Saskatoon or Regina, the first thing they look at is the labour force. Do we have people to fill those jobs? If you can’t answer that ques- tion in the affirmative, it becomes very difficult to build a business case.”64

SREDA is also focusing on bringing global businesses to Saskatoon. “Brazil has two of the world’s largest food processing companies. They employ over 130,000 people internationally but have no facilities at all in North America. They have no market penetration here, no presence here,” says LeClair. “We have the critical mass—the infrastructure, the raw com- modities. I met with the Brazilian ambassador and they’re willing to open the doors.”65

Similarly, encouraging entrepreneurship and growing small businesses is important, too. In fact, entrepreneurship is one of the reasons why Saskatoon has the country’s fastest-growing economies. “The vast majority of our employment comes out of the entrepreneurial, homegrown companies,” says LeClair.66 One partnership involves IDEALS Inc., an organization designed to support new businesses and reduce potential risks. While 60 to 75% of all new businesses will fail within the first year, business incu- bator organizations like IDEALS help businesses achieve an 87% success rate.67

Investment in research and development and expanding knowledge-based industries is another strategy for continued economic growth. “We have many companies coming from around the world to use our research facilities. There is $2.6 billion worth of research facilities clustered around the university. We’d like to see more companies come to do their research here, and then build their facilities close by.”68 The University of Saskatchewan has developed technologies that have resulted in companies establishing themselves nearby. SED Systems, International Road Dynamics, and Philom Bios are a few examples. Certainly, the potential for more startups or spinoffs exists.

According to LeClair, “information communication technology (ICT) is a critical industry that supports numerous other industries including healthcare, mining, manufac- turing and biotechnology. ICT professionals have found Saskatchewan’s economy fertile for innovation that only ICT companies can supply.”70

According to economists at TD Bank, other factors are also needed to sustain eco- nomic growth. Skilled labour shortages need to be addressed. Certainly, Canada needs to educate students with the right skills to support a prosperous economy. And keeping taxes low is another challenge to remain competitive. Some economists also believe that Sas- katchewan should build upon its resources strength and become a clean energy powerhouse.

1.What economic elements are contributing to Saskatoon's growing economy? 2.What non-economic or other related factors are contributing to Saskatoon's growing economy? 3. What do you think are the most important factors for Saskatoon to sustain long-term economic growth?

What economic elements are contributing to Saskatoon's growing economy?

The Saskatoon economy is the fastest growing economy in Canada. There are several elements that have contributed to the growth of the economy of the Saskatoon's and due to which the GDP has increased by 3.7% in the year 2013. The job market has been increased due to the increase in industries which have attracted both foreign and domestic applicants. The economy of the Saskatoon's has growing due to the expanding of the retailing and housing sector of the economy (Holden and Muhajarine, 2015). The city Saskatoon has very strong resource development and the growth of the population in the city is also growing which has lead to boost up the housing market. there are many natural resources in the city Saskatoon's which has led to the growth of the economy such as oil, potash, and uranium.

The major strength of this city is the agricultural sector which helps the economy in boosting as this city has the six different soil zones which produce several feeds and forages, pulse crops, oilseeds and many bowls of cereal crops also (Bruneau, et al., 2013). The majority of the wild rice is produced by this city of Canada. It also provides highest flax and mustard to the people of Canada and it also exports the wheat to the other countries. Not only agricultural sector but the manufacturing sector and automobiles sector of this economy has also increased which leads to higher growth in the economy. AS per the statistics of Canada, Saskatoon's city is the fastest growing economy and the leading factor of this growth is due to international immigration. The majority of the people who live in this city are younger and they all are working which helps in leading to higher growth of the economy (Connell, et al., 2013). The industry of the commercial and the industrial is also growing which results in leading to economic growth.

There are certain non-economic factors also which also lead to the growth of the economy of the Saskatoon's such as younger population over there, class, religion, family, society, etc. The education system of Saskatoon's city is very high as there are only younger people who are well educated and working-class family (Ray, et al., 2012). The economic development of the city was also contributed due to certain factors such as role of the individual, socio-political dependencies, etc. The culture of the Saskatoon's is very good as the people over there are following the pattern of human activity. There are many entrepreneurs in the city which was creating many jobs for the other and also helps in making the economy fast-growing (Minaker, et al., 2016).

What non-economic or other related factors are contributing to Saskatoon's growing economy?

There is a sustainable environment and many resources are available there which come from the environment. So the climatic and environmental of the Saskatoon's is another factor that was favorable and there are many resources available in the environment causes economic growth to the city (Ketilson, 2014). The religion follow over Saskatoon's was the Roman Catholic which is generally educated people and their education level is high. Saskatoon's is generally famous for Hub city so there many other cities nearby to this city which come here as there is transportation system is very advanced and it results in attracting many other people over the countries.

There are many factors as per the case study which has led to sustain the long term economic growth. The major reason behind the long term economic growth is the mining industry of the Saskatoon's which has experienced significant growth in the city. In the 15 years,’ the major growth has been seen in this sector and this city has also started exporting to many other countries also (Robin, 2013). For sustaining the long term economic growth the city Saskatoon has to put the major focus on the labor market as the city is facing the issues related to that. There are many entrepreneurs in the city but the labor force is quite become challenging. Another factor that leads to the long term growth is the infrastructure of city which is advanced and rapid. The city has good communication and the transportation system which has contributed to the long term economic growth.

This city has enough resources and is also and their natural strength is agriculture so this the major factor for the long term growth of the Saskatoon. The manufacturing sector, transportation, agriculture, etc. are expanding (Lu, et al., 2015). This city is the major manufacturer of the food and beverages so they also export the products to the foreign market. There are many families which are integrating to Canada and most of the people over there are of the median age so the city is full of younger people which are the biggest factor leads to the economic growth for the longer period.

References

Bruneau, J., Dupont, D., & Renzetti, S. (2013). Economic Instruments, Innovation, and Efficient Water Use. Caandian Public Policy, 39(Supplement 2), S11-S22.

Connell, D. J., Bryant, C. R., Caldwell, W. J., Churchyard, A., Cameron, G., Johnston, T., ... & Marois, C. (2013). Food sovereignty and agricultural land use planning: The need to integrate public priorities across jurisdictions. Journal of Agriculture, Food Systems, and Community Development, 3(4), 117-124.

Holden, B., & Muhajarine, N. (2015). Quality of Life Research in Saskatoon, Caanda: Fifteen years of co-creating knowledge and action in the community. Engaged Scholar Journal: Community-Engaged Research, Teaching, and Learning, 1(2).

Ketilson, L. H. (2014). Partnering to finance enterprise development in the Aboriginal social economy. Caandian Public Policy, 40(Supplement 1), S39-S49.

Lu, P. H., del Canto, S., Muhajarine, N., Kitchen, P., Newbold, B., Randall, J., ... & Wilson, K. (2015). Quality of life of immigrants: Integration experiences among Asian immigrants in Saskatoon. Engaged Scholar Journal: Community-Engaged Research, Teaching, and Learning, 1(2).

Minaker, L. M., Shuh, A., Olstad, D. L., Engler-Stringer, R., Black, J. L., & Mah, C. L. (2016). Retail food environments research in Caanda: A scoping review. Caandian Journal of Public Health, 107(1), eS4-eS13.

Ray, D. M., Lamarche, R. H., & Beaudin, M. (2012). Economic growth and restructuring in Caanda's heartland and hinterland: From shift?share to multifactor partitioning. The Caandian Geographer/Le Géographe caandien, 56(3), 296-317.

Robin, J. (2013). Saskatchewan biosciences: Building public, policy, and industry support. Industrial Biotechnology, 9(6), 311-313.