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Tuesday, November 25, 2008

Go West, young man -- but stop before the Alberta border; Saskatchewan is booming

Like legendary investor Jim Rogers, I’m bullish on Saskatchewan. This resource rich province is now under the wise and gentle stewardship of Saskatchewan party Premier Brad Wall, and times are good.

In two reports released today by Statistics Canada, unemployment is down in the province and retail sales are at record levels for the month of September.

"More Saskatchewan residents are enjoying the benefits of our growing economy," said Enterprise and Innovation Minister Lyle Stewart. "There are more job opportunities, and Saskatchewan's confidence levels in the economy are extremely high when compared to other Canadian jurisdictions."

According to StatsCan data, there were 8,300 people receiving EI benefits in September 2008, a drop of 8.5 per cent from the same month one year ago. This is the largest drop in EI beneficiaries of all provinces. In fact, across the country, the number of people receiving EI increased 3.9 per cent during the same period.

Retail sales for September 2008 were up 10.4 per cent over last year, the second highest increase in Canada. Nationally, retail sales increased by 5.6 per cent over the same period.

"While much of Canada is experiencing an economic downturn, there is still a sense of optimism and excitement for the economic future of Saskatchewan," Stewart said. "We will continue to build a stronger province and a better life for people who live here."

Back in Alberta, Premier Stelmach is struggling to keep Alberta’s oil and gas economy from collapsing. The province’s New Royalty Framework (NRF) has pushed drilling activity to British Columbia and Saskatchewan and it’s not clear whether the recent ad hoc, desperate tinkering to oil and gas royalties will help.

Alberta’s free market-oriented opposition Wildrose Alliance party thinks nothing short of scrapping the New Royalty Framework will give oil and gas investors the confidence to return to Alberta.

"This latest announcement is reactionary, policymaking on the fly designed to fix something the government has caused,” said former MLA and party leader Paul Hinman.

In a media statement, the Wildrose Alliance wrote “investors outside of Alberta may not have any faith that this government will even stick to this makeshift plan for the five years. They have proposed six revisions to the current Royalty framework in the past 14 months, all with a mind to raising tax revenues.” Not since Prime Minister Trudeau has the political climate been so uncertain and unfriendly to Alberta's energy entrepreneurs.

Hinman says "There is only one thing to do: announce a full retraction of the NRF and launch a full open consultation with the industry to see if a new framework is even viable.”

Well, there is one other thing: move to Saskatchewan.

Posted by Matthew Johnston

Posted by westernstandard on November 25, 2008 in Canadian Provincial Politics | Permalink

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Comments

Surely they would want to stop BEFORE the Alberta border.

Posted by: bigcitylib | 2008-11-25 12:19:36 PM


"At" is fine if you're heading West -- just as long as do don't cross the border. But I'll adopt your "before" suggestion, BCL. It does make it clearer. Thanks.

Posted by: Matthew Johnston | 2008-11-25 12:26:56 PM


As I have said many times before, Alberta is kaput.

Posted by: The Stig | 2008-11-25 12:35:42 PM


I do not agree with either of you. To go ahead and turn everything over to unfettered oil company activity, even to the extent of scrapping the royalty regime would be really, really stupid. The oil companies would gladly accept any degree of reduction in control. They are the king of the whiners. Let us not be seduced.

I am no commie, by a long shot, and I live in Edmonton. However to just turn it all over to them... uh-uh. If we have to take a slowdown, tough nougies. The whole thing was careening out of control anyway.

So, to you schadenfreude bastards, "sod off".

Posted by: DCM | 2008-11-25 1:00:24 PM


Oil companies head offices aren't about to move to Moosejaw any time soon. The big money is still in Alberta. Many of the people who flocked to Saskatchewan last year are still commuting to Alberta to work.

Alberta's problems will get worse, alright. Royalties aren't the problem, disappearing reserves are what we need to be worried about.

Saskatchewan is riding a wave of hype right now. There never was as much oil there as in Alberta, and it will be exploited at a much faster rate than Alberta's reserves were. Rumors of the huge reserves in the Bakken formation are nothing more than wishful thinking. They won't come into play for decades. Alberta oilsands are starting to sputter, and SK was counting on developing their own oilsands to really boost the economy. Trying to lure people to move there and grow the economy will result in the same problems Alberta is having right now (or will have very soon).

Posted by: dp | 2008-11-25 1:13:20 PM


The Financial Post reported in September that new tarpits projects in Alberta are break even at around $85 a barrel. Today oil returned to $50 a barrel after yesterday's increase. Several reports issued today indicate the economies of the US, Europe and Japan are much weaker than expected. Oil will soon go into the 40's or maybe even the 30's per barrel. At those prices established tarpit operations are in jeopardy. Alberta has had 30 years to diversify its economy but didn't. It's too dependent on natural resources. Alberta is starting to look like Venezuela with inept politicians pointing fingers at each other as the economy crumbles.

Posted by: The Stig | 2008-11-25 1:45:40 PM


DCM wrote: "The whole thing was careening out of control anyway."

Out of whose control?

Posted by: Matthew Johnston | 2008-11-25 1:51:40 PM


So, to you schadenfreude bastards, "sod off".
Posted by: DCM | 25-Nov-08 1:00:24 PM

Why? Albertans love lecturing everybody else as to why their economy is superior to everybody else's. Easy to do when oil is $100+ a barrel. Not so easy when oil is heading for $30. I'm sure Zebulon Punk will soon have a conspiracy theory that Ontario is responsible for pushing oil prices down. You guys have no one to blame but yourselves.

Posted by: The Stig | 2008-11-25 2:06:16 PM


dp wrote: "Rumors of the huge reserves in the Bakken formation are nothing more than wishful thinking. They won't come into play for decades."

I have spent some time in that area working and it is coming into play now and it is not wishful thinking. It certainly is more expensive to exploit than the Frobisher field but it appears there is a considerable amount of oil in the Bakken. As a bonus every time you drill down to the Bakken you also go through the Frobisher so you get a free look at it as well. Check out what Cresent Point or Petrobank have to say about the Bakken.

Posted by: Tom | 2008-11-25 2:25:52 PM


Stig-meister.

Do you need to politicize it? Your opinion is based upon dislike of Alberta, not anything factual. Albertans love to brag about their economy, eh? I don't brag about it because it has happened at a great cost. Don't lecture me about it. You sound like you are really glad to see the price of oil go down. I am too, but not for the same reason you are. You like to see it go down so that you can gloat about Alberta's economy faltering. I am glad to see it go down so the super-heated economy can cool down, since it was plain to me that what was happening was not sustainable.

And as far as "whose control" Matthew, I would say the control of everybody, government, environmentalists, and even industry, in trying to find resources to build all of the projects that are on the books, and having prices go through the roof because of lack of said resources.

And before you lot all get onto a good "public hating" of Alberta, name me one province that didn't have 30 years to diversity their economy. Don't pick on Alberta. Alberta's energy industry is in itself highly diverse. Are you referring to "hi tech"? How about making toasters? If so, why haven't the other provinces done that?

So, back off.

Posted by: DCM | 2008-11-25 2:53:39 PM


The important thing (to me) is that the 'chicken little' plague hasn't hit Saskatchewan with full force. The last thing we need is businesses trimming jobs 'to prepare for the economic downturn' when one of the key indicators they're using to predict an economic downturn is the unemployment numbers they're adding to.

Posted by: K Stricker | 2008-11-25 2:56:31 PM


No Ontarians.

Posted by: Zebulon Pike | 2008-11-25 3:02:50 PM


And before you lot all get onto a good "public hating" of Alberta, name me one province that didn't have 30 years to diversity their economy.
Posted by: DCM | 25-Nov-08 2:53:39 PM

Name me one province that has a $13 billion dollar "Heritage Fund" of which one of its goals was to do just that.

Posted by: The Stig | 2008-11-25 3:35:19 PM


Stigmata

It is not for you to judge what AB should have done with its heritage fund, especially from your standpoint of snottiness and envy.

Posted by: DCM | 2008-11-25 3:40:39 PM


Ontario has an unlimited trust fund - it's called the federal government. Hopefully Mr. Harper closes the bank and lets Ontario fend for itself.

Posted by: Zebulon Pike | 2008-11-25 3:47:58 PM


Stig.

Oh, and by the way, your anger shines through in your use of quotes around the words heritage fund. It is as if you are so mad at it you can barely stand to say the words. How come you are so angry?

Posted by: DCM | 2008-11-25 3:49:43 PM


It is not for you to judge what AB should have done with its heritage fund,.........
Posted by: DCM | 25-Nov-08 3:40:39 PM

I couldn't care less what Alberta spends it's "Heritage Fund" money on. Though if I was an Albertan (and thank God I'm not) I might be concerned if I was getting value from it.

Posted by: The Stig | 2008-11-25 4:12:37 PM


Stig.

You aren't very perceptive are you? If you couldn't care less, then why are you blowing snot this afternoon? The very fact you say that thank god you are not an Albertan, means that you are envious, and angry about it. And if you don't care, why even think about how disappointed I should be if I don't get value from it? And if you don't care, why the quotes, and why do you seem to be so faux knowledgeable about it? So stop sticking you beak out for me to slap, if you don't care.

Posted by: DCM | 2008-11-25 4:25:19 PM


Stig.
Oh, and by the way, your anger shines through in your use of quotes around the words heritage fund.
Posted by: DCM | 25-Nov-08 3:49:43 PM

That's quite a unique talent you believe you have. I'm going to put quotes around another word. Tell me what you think I mean by it. "Marmalade"

Posted by: The Stig | 2008-11-25 4:28:52 PM


Stig.

You don't have a clue what I think my unique talents are. And as to your use of the word marmalade, it isn't my job to help you figure out what you have written. If you can't figure it out, don't be asking someone else to do it for you.

Posted by: DCM | 2008-11-25 4:39:53 PM


The Saskatchewan economy is vibrant right now due to a combination of factors, not just petroleum. There is also record production value of potash and uranium. Rare earth mining and diamond mining are in development. The oil sands in the North west are being explored for development. In the south central part of the province, the largest deposit of kaolin in North American is beginning development.All this addition to the synchrotron in Saskatoon and the scientific and R & D spin offs that it is creating in that city.

The local economy is recording record retail sales and unprecedented growth. The unbudgeted $3 billion surplus this year has contributed to a 40% reduction in provincial debt in 1 year and has created $2 billion cash reserve to cushion against fiscal shocks. As well $1 billion in increased infrastructure spending this year and $1.5 billion for next year are working at building the basis for the future.

Saskatchewan is showing its real potential to become a significant source of sustainable growth and wealth in Canada.

Posted by: Gary | 2008-11-25 6:54:48 PM


Saskatchewan is showing its real potential to become a significant source of sustainable growth and wealth in Canada.
Posted by: Gary | 25-Nov-08 6:54:48 PM

Excellent news and good luck to Saskatchewan. As I have said may times before Saskatchewan is ready to become the leading economic player in Western Canada as Alberta is kaput.

Posted by: The Stig | 2008-11-25 7:40:55 PM


...once Sask drops the PST, then they've arrived...

Posted by: tomax7 | 2008-11-25 7:58:23 PM


So why is Alberta kaput?

Posted by: Matthew Johnston | 2008-11-25 7:59:09 PM


Matt:

Alberta has been through these boom and bust things before.

Asshats like Stig shed no tears for Albertans when oil was at $10 a barrel not that long ago, the unemployment rate was 12% and the banks owned 25% of the houses.

As any Albertan knows, Confederation was set up to benefit Ontario and Quebec ... while the ‘regions' were the cash cows for their unearned lifestyles.

What Stig and his band of gay Ontarians fail to appreciate is that if the oil price goes down, so do equalization payments.

Not a happy prospect for a have-not province like Ontario.

It must be a tough realization for some of their populace to realize they are now an economic wasteland.

Posted by: set you free | 2008-11-25 9:48:21 PM



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