Author Archives: prosperitysaskatchewan

Saskatchewan growth to slow to 1.5% in 2014

28 Nov 2014
Leader-Post
LEADER-POST
Sask. growth to slow to 1.5% in 2014
From page A1 Saskatchewan’s economic growth is expected to reach just 1.5 per cent this year, after posting a 5.0 per cent increase in 2013 boosted by a record-breaking crop, according to the Conference Board of Canada.
The province’s economic performance — ranked seventh among the 10 provinces in 2014 — is “in contrast to the robust growth of the early part of this decade,’’ said the Conference Board’s provincial outlook released Thursday.
“While the Saskatchewan economy remains on solid ground, lower yields in the agriculture sector and more temperate gains in the oil industry will cap Saskatchewan’s growth prospects for the near term.”
Fortunately, uranium and potash mining will be “bright spots’’ for the provincial economy during the next two years, the report said.
“Gains in metal mining and potash production will help overall real GDP advance by 2.4 per cent in 2015, although the forecast is muted by lower yields in the agriculture sector and more temperate gains in the oil industry.”
The Ottawa-based economic forecaster said production at the Cameco Corp. Cigar Lake uranium mine in northern Saskatchewan will ramp up as Japan’s nuclear reactors come back on stream in 2015 and demand grows from China and other emerging markets. Potash mining is also expected to rebound in 2015 after the collapse of the Russia-Belarus potash cartel in 2013 caused prices and production to plummet.
Manufacturing will also show steady growth over the next two years, but construction will slow down in 2016 after posting healthy 3.2 per cent growth in 2015. The fall-off in construction activity will dampen the performance of the province’s goods producing sector in 2016, the report said.
Employment is forecast to increase 1.6 per cent in 2015 and 1.2 per cent in 2016.
Unemployment will continue to hover in the four per cent range, which ensures that Saskatchewan will boast the lowest jobless rate in Canada in 2015-16, the report added.

SASKATCHEWAN FARMLAND IN FEWER HANDS, STUDY FINDS

28 Nov 2014
The StarPhoenix
JASON WARICK
THE STARPHOENIX
FARMLAND IN FEWER HANDS, STUDY FINDS
Team to quantify purchases
Vast tracts of Saskatchewan farmland have been scooped up by investors from outside the province.
Some rural municipalities have seen a 20-fold increase in corporate land ownership since 1994. Three corporations each now own more than 100,000 acres.
That and other revelations form part of a joint study by researchers at the University of Saskatchewan, University of Regina and University of Manitoba, quantifying the rapid concentration of farmland ownership in the province. “There are huge amounts of land being bought up,” said Saskatchewan native and University of Manitoba professor Annette Desmarais.
“We’re just beginning to understand what the impacts are. It makes it very difficult to build community in that environment.”
The data is scheduled to be presented this morning to delegates at the National Farmers Union (NFU) convention in Saskatoon. The full study is due for publication in the January edition of the Canadian Journal of Food Studies.
Desmarais and the other researchers combed through electronic and paper records at rural municipality offices and other locations. They focused on three RMs in different regions.
In the RMs of Harris, Lajord and Excel, less than 3,200 acres were owned by investors or “farmer/investor hybrids” in 1994. That number has now grown to 59,441.
The change is largely due to amendments made a decade ago to the legislation governing farmland ownership. Previously restricted to Saskatchewan residents, farmland can now be purchased by people living outside the province.
Desmarais and NFU president Jan Slomp said the situation exacerbates the decline of some rural communities. The investors don’t generally live in the areas where they own land, their kids don’t go to the local school, they don’t contribute as much to the local economy, and they aren’t part of the town’s social life.
“It’s absentee exploitation of the land,” Slomp said. “It’s sucking the lifeblood out of our communities.”
They say this “land grab” is making it hard for a new generation of farmers to start their own operations.
The largest landowner listed in the study is Robert Andjelic & Andjelic Land Inc., with Saskatchewan holdings of 161,241 acres.
In an interview Thursday, Andjelic, who hails from Manitoba and now lives in Alberta, said he actually owns about 180,000 acres.
He said Saskatchewan farmland has risen in price since the changes, but it’s still among the most affordable, most productive land in the world.
He said farms must grow to stay competitive and to take advantage of the larger, better machinery. One seeding machine, which used to be six metres wide, is now four times that size.
“We have to be as efficient as we can,” he said.
Andjelic said he partners with young local farmers to produce crops on his land, and provides jobs to others. He said the higher land prices have allowed older farmers to retire comfortably.
“It’s put money in all their pockets,” he said.
Desmarais and Slomp said land concentration is not inevitable.
“It all depends on what legislation you put in place,” Desmarais said.
They point to Prince Edward Island, which restricts farmers to 1,000 acres of land and corporations to 3,000. The rules have been in place since the 1970s, when large potato and french fry companies tried to take control of large amounts of land.
NFU board member and PEI organic farmer Reg Phelan said the rules have allowed family farms to survive. PEI continues to be Canada’s largest potato producer, despite the small average farm size. Phelan said the law has been challenged several times in court, but has remained in place.
“It’s about what type of farming you want to see,” he said.
Desmarais wrote the study with U of R professor Andre Magnan, Saskatchewan researcher Darrin Qualman and Nettie Wiebe, a professor at St. Andrew’s College at the U of S.
The research team is already at work on a followup to provide a more detailed picture of farmland ownership in Saskatchewan.

Prosperity Saskatchewan ceasing operations

After over 4,000 blog postings, 1,575 radio commentaries, numerous public speaking events and university lectures – people have caught-on that Saskatchewan is doing well.

So, on November 30th (Sunday), updates to http://www.ProsperitySaskatchewan.com (this site) and all of the related elements’ operations will end.

I will be focusing exclusively on my “Business Development Manager” role with the Flaman Group of Companies – see http://www.flaman.com

Thank you for visiting,

Eric Anderson

Saskatchewan employment up 1.6% and wages up 4.7% from Sept 2013 to Sept 2014

November 27, 2014
Statistics Canada
The number of people working in Saskatchewan was up by 7,800 or 1.6% in September 2014 from 2013.
The average weekly earnings in Saskatchewan were up by 4.7% in September 2014 from 2013.
Employees 1 Nov 2014 Employees 2 Nov 2014
Wages 1 Nov 2014 Wages 2 Nov 2014

Oil tumbles below $70 as OPEC holds fire despite collapse in prices

Oil tumbles below $70 as OPEC holds fire despite collapse in prices

ERIC REGULY AND SHAWN MCCARTHY

ROME/OTTAWA — The Globe and Mail

Published Thursday, Nov. 27 2014, 7:58 AM EST

Last updated Thursday, Nov. 27 2014, 1:25 PM EST

OPEC, the oil cartel responsible for 30 per cent of global oil production, will not cut output in spite of the supply glut, a decision that will put more downward pressure on already tumbling prices.

OPEC’s production ceiling will remain unchanged at 30-million barrels a day, OPEC ministers announced Thursday. OPEC’s secretary general, Abdalla Salem El-Badri, said the quota will remain in place for the first six months of 2015. OPEC next meets in Vienna on June 5.

He said OPEC has no target price and that the member countries are not worried about the near 35-per-cent price plunge since June. “We are not sending any signal to anybody,” he told reporters after the meeting. “We have to wait and see how the market will settle. I have said many times to you we don’t want to panic and we meant it.”

Before the conclusion of the meeting at 4 p.m. European time, the oil markets were selling off rapidly as investors took the view that OPEC would be unable to muster support for a production cut to support sagging prices. Brent crude, the effective international benchmark, fell 3.3 per cent on Thursday, taking the price to just above $75 (U.S.) a barrel. In June, the price was $110.

In light Thanksgiving trading in the U.S., the benchmark North American crude, West Texas Intermediate, fell below the $70 a barrel mark.

The Canadian dollar, at a high point just shy of 90 cents U.S. earlier today, slipped to 88.15 cents.

The TSX energy group tumbled more than 6 per cent, led by a steep selloff of major oil sands producers.

Suncor Energy Inc. fell 6.2 per cent, Canadian Natural Resources Ltd. was down about 7 per cent and Cenovus Energy Inc. was off about 5 per cent.

Talisman Energy Inc., which has struggled to sell assets amid oil’s slide, fell roughly 5.3 per cent, and Penn West Petroleum Ltd. was down nearly 14 per cent. Encana Corp., which has spent billions on oil properties, was down about 5 per cent.

The decision to keep OPEC’s 30-million barrel a day production target intact did not please all OPEC member states. Venezuela had planned to push for a production cut as it watches is foreign currency reserves fall away. As the oil ministers met, Venezuelan oil minister Rafael Ramirez said, “Everone has to make some sacrifice.

A month ago, Mr. Ramirez said that $100 a barrel was a fair price.

A price that high seems unreachable in the near term, in good part because non-OPEC oil supplies are soaring, thanks in good part to America shale oil output. In the United States, shale oil production is rising every six months b about 500,000 barrels a day.

OPEC said that oil demand will actually rise next year, in spite of slowing growth in China and almost not growth in Europe, by 1.1-milion barrels a day to 92.3-million barrels. But supply is increasing at a faster pace, with non-OPEC supply expected to increase by 1.4-million barrels a day in 2015, to 57.3-million barrels a day.

“The market is oversupplied,” said United Arab Emirates Energy Minister Suhail Al-Mazrouei. “But the oversupply is not from OPEC.”

Analysts said the surging non-OPEC supply signals that OPEC is losing control of the market.

“The balance of power has shifted and OPEC is accepting the fact that its ability to control the long-term price of oil is limited,” said Michael Hewson, a market analyst at London’s CMC Markets, said just before OPEC’s production quota was confirmed.

As crude prices have fallen, pump prices followed suit and are now the lowest in four years. On the Prairies, regular gasoline is already selling below $1 a litre at many stations, while they have hit $1.07 in areas of Toronto, according to gasbuddy.com, an online survey site.

Gasbuddy.com analyst Dan McTeague said if crude prices fall below $70 (U.S.) a barrel as many analysts expect as a result of the OPEC decision, pump prices will dip below $1 in many Canadian cities.

As a significant oil producer, the Canadian economy will be hurt by the lower prices, but the pain will be felt primarily in Western Canada and Newfoundland and Labrador, while consuming provinces may welcome the lower pump prices and manufacturers will benefit from a devalued loonie.

However, the federal government is warning its revenues will decline by as much as $2.5-billion a year in the coming years if oil prices remain at depressed levels.

The impact “depends on how long (the lower prices) are sustained,” said Paul Ashworth, economist with Capital Economics in Toronto. OPEC “hasn’t cracked at the moment but there is the possibility that at some point in the future, if prices remain low, they will crack.”

Mr. Ashworth said most existing production in Canada will be maintained – and will even be profitable – below $70 a barrel, but new investment in oil sands projects will be undermined.

“It does present a downside risk to marginal projects that we could have seen in the future,” he said. The highest cost projects aren’t going to get the go-ahead if these prices are maintained.”

SASKATCHEWAN BUDGET REMAINS ON TRACK DESPITE DROP IN OIL PRICE

BUDGET REMAINS ON TRACK DESPITE DROP IN OIL PRICE

Released on November 27, 2014

Lower Oil Price Could Have More Impact on Next Year’s Budget

Saskatchewan remains on track to post a balanced budget in 2014-15.  The Mid-Year Report released today projects a year-end surplus of $70.9 million.
“While the price of oil has fallen in recent weeks, it remained high for the first few months of the fiscal year, so overall, resource revenues are still projected to be ahead of budget this year,” Finance Minister Ken Krawetz said.  “However, it now looks like we will start the 2015-16 Budget year with a lower oil price, which means our government will need to carefully manage spending.”
Krawetz said the Saskatchewan economy remains strong despite the impact of falling oil prices on government revenues.
“Right now, Saskatchewan has the strongest job growth and lowest unemployment rate in Canada,” Krawetz said.  “Most of the new jobs are not in the resource sector.  They are in other areas, which shows the importance of a strong, diversified economy.”
Total revenue for 2014-15 is now projected at $14.199 billion, up $126.4 million from budget.
Projected revenue from non-renewable resources is up $59.5 million from budget.  Higher potash revenue and Crown land sales more than offset the projected revenue decrease in oil.
Net income from Crown Corporations and other Government Business Enterprises including the insurance sector is up $183.8 million from budget, while revenue from taxation, personal income tax, corporate income tax and tobacco is $145.3 million lower than expected at budget.
Total expense for 2014-15 is now projected at $14.129 billion, up $126.9 million from budget.   Much of this increase, about $107 million, is attributable to projected costs related to disaster assistance for those affected by recent flooding.
“Our government will continue working hard to keep Saskatchewan’s economy and its finances strong,” Krawetz said.
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For more information, contact:
Jeff Welke Finance Regina Phone: 306-787-6046 Email: jeff.welke@gov.sk.ca Cell: 306-536-1185

Oil tumbles as OPEC decides not to cut oil output

Oil tumbles as OPEC decides not to cut oil output
Reuters
Published Thursday, Nov. 27 2014, 7:58 AM EST
Last updated Thursday, Nov. 27 2014, 10:08 AM EST
Saudi Oil Minister Ali al-Naimi told reporters on Thursday that OPEC will not cut its oil output.“That is right,” Naimi told reporters in response to a question on whether OPEC had decided not to cut oil supplies.
He was speaking after a five hour meeting of the producer group broke up.

OPEC has three options on the table

27 Nov 2014
Calgary Herald
JAKE RUDNITSKY AND JAMES HERRON
BLOOMBERG
OPEC has three options on the table
Experts suggest potential outcomes of oil cartel’s meeting in Vienna
The oil market will “stabilize itself,” Ali Al-Naimi, oil minister for Saudi Arabia, the world’s largest crude exporter, said Wednesday.
The comment will keep people guessing before Thursday’s meeting of the Organization of Petroleum Exporting Countries in Vienna, said Harry Tchilinguirian, head of commodity markets at BNP Paribas SA.
Here are some potential outcomes: Production cut: OPEC may reduce its output ceiling by one million barrels a day or more, from 30 million currently, to shore up prices, Paul Horsnell, global head of commodities research at Standard Chartered, said in a report.
“We expect OPEC to try to agree a production-ceiling cut to 29 million barrels a day, perhaps below,” Horsnell said.
“This agreement could be complicated by the lack of current individual country quotas and Iraq’s long exemption from output targets.”
Prices have fallen into a bear market this year, with Brent crude losing 30 per cent from its June high.
“OPEC quota reductions have typically been successful in stabilizing and eventually pushing oil prices higher,” Deutsche Bank said in a report. Enforce existing target: “OPEC will confirm the 30 million barrel-perday ceiling and urge better compliance,” Carsten Fritsch an analyst at Commerzbank AG in Frankfurt, said by e-mail.
The 12-member group has exceeded its output ceiling in all but four of the 34 months since it was implemented, according to data compiled by Bloomberg. The group produced 974,000 barrels a day more than its target last month, the data show.
“To make a credible cut, OPEC will have to re-impose individual country quota restrictions” because it is easier for members to pump too much when there is only a collective target, Energy Aspects said in a note. “Even proposing country-level quotas would be hugely contentious.” Do nothing: “This is a much more bearish case,” Mike Wittner, head of oil market research at Societe Generale SA, said in a report. “We would enter a true production cost driven world, as opposed to a world driven by a Saudi price target that was chosen with their budgetary needs in mind.”
Prices would need to drop low enough to hurt U.S. shale oil production, or about $70 a barrel for Brent and $60 to $65 for West Texas Intermediate, he said.

Government Motion Supports Pipeline, says Ontario and Quebec should not be Creating Barriers

Government Motion Supports Pipeline, says Ontario and Quebec should not be Creating Barriers

Released on November 26, 2014

Pipelines Safer Than Rail Cars for Oil
Today in the Legislative Assembly, Premier Brad Wall introduced a motion supporting construction of the Energy East Pipeline and calling on Ontario and Quebec not to add unnecessary regulatory barriers to the approval process.
“The Energy East Pipeline will be good for the economy in all parts of Canada, including Ontario and Quebec,” Wall said.  “It means billions of dollars of new economic activity, new jobs and new tax revenue, with the majority of that new revenue and activity going to Ontario and Quebec.
“And yet those two provinces are creating new barriers, which will harm their own economies and the economies of western provinces who are net contributors to the billions of dollars of equalization payments Ontario and Quebec receive each year.  It doesn’t make any sense.
“In addition, moving oil by pipeline is far safer and far more environmentally-friendly than moving it by rail car, which is what we are doing now.  Why would they oppose that?“
Wall said there is already a stringent approval process for new pipeline projects through the National Energy Board, yet Quebec and Ontario are now talking about inventing their own approval processes.
“This is not how Canada should work,” Wall said.  “We should be removing barriers to economic growth, not inventing new ones.”
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For more information, contact:
Kathy Young Executive Council Regina Phone: 306-787-0425 Email: kathy.young@gov.sk.ca Cell: 306-526-8927

Released on November 26, 2014

Pipelines Safer Than Rail Cars for Oil
Today in the Legislative Assembly, Premier Brad Wall introduced a motion supporting construction of the Energy East Pipeline and calling on Ontario and Quebec not to add unnecessary regulatory barriers to the approval process.
“The Energy East Pipeline will be good for the economy in all parts of Canada, including Ontario and Quebec,” Wall said.  “It means billions of dollars of new economic activity, new jobs and new tax revenue, with the majority of that new revenue and activity going to Ontario and Quebec.
“And yet those two provinces are creating new barriers, which will harm their own economies and the economies of western provinces who are net contributors to the billions of dollars of equalization payments Ontario and Quebec receive each year.  It doesn’t make any sense.
“In addition, moving oil by pipeline is far safer and far more environmentally-friendly than moving it by rail car, which is what we are doing now.  Why would they oppose that?“
Wall said there is already a stringent approval process for new pipeline projects through the National Energy Board, yet Quebec and Ontario are now talking about inventing their own approval processes.
“This is not how Canada should work,” Wall said.  “We should be removing barriers to economic growth, not inventing new ones.”
-30-
For more information, contact:
Kathy Young Executive Council Regina Phone: 306-787-0425 Email: kathy.young@gov.sk.ca Cell: 306-526-8927

Sask. shoppers spend $1.63B in September – up 4.6% from last year

26 Nov 2014
The StarPhoenix
BRUCE JOHNSTONE — With files from The Canadian Press
LEADER-POST
Sask. shoppers spend $1.63B in September
REGINA — Saskatchewan shoppers weren’t deterred by signs of an economic slowdown as they racked up $1.63 billion in retail sales in September, a healthy 4.6 per cent increase over the same period last year, Statistics Canada said Tuesday.
The year-over-year sales increase was slightly ahead of the national increase of 4.5 per cent, while the monthly increase of 0.8 per cent from August was on par with the national increase, the federal agency said.
United Steelworkers economist Erin Weir noted Saskatchewan retail sales were outperformed by the other prairie provinces in September. From August to September, retail sales rose by one per cent in Alberta and 1.2 per cent in Manitoba, while year-over-year sales grew by 4.8 per cent in Manitoba and 7.4 per cent in Alberta.
But Doug Elliott, publisher of Sask Trends Monitor, was surprised at the strength of retail sales given the decline in some other economic indicators, such as farm cash receipts, which were down 15 per cent in the first quarter, reflecting the grain transportation backlog and lower commodity prices.
Economic growth, as measured by real gross domestic product (GDP), is expected to fall to one per cent in 2014 after posting five per cent growth in 2013 — the secondhighest growth rate among the provinces. Since 2009, the province has averaged 4.5 per cent real GDP growth — again second-highest next to Alberta.
“The unadjusted (retail sales) numbers were up 8.1 per cent (over September 2013), so this was a good month,” said Elliott. “This one surprised me because I was expecting a slowdown because of the commodity prices and farm receipts. … This is the largest increase in over a year.”
Elliott said retail sales were strong across the board with increases in 12 of 13 categories. On a year-overyear, unadjusted basis, motor vehicle dealers saw a 12 per cent increase in sales in September; beer, wine and liquor sales were up 11 per cent; furniture stores were up 16 per cent; and general merchandise stores 13 per cent. “The only weakness was clothing stores (down two per cent) and grocery stores were up only 0.3 per cent, so they’re flat.”
Elliott suspects retail sales will begin to slow next year, when the impact of slower economic growth and lower commodity prices starts to affect wages and job growth.
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