Saskatchewan to lead nation for economic growth: RBC

Saskatchewan to Lead Nation for Economic Growth: RBC EconomistHistorically high commodity prices will push Saskatchewan to a leading growth position amongst Canadian provinces this year, according to RBC economist Paul Ferley.


Speaking to a group of RBC clients in Saskatoon on Friday, Ferley noted that a “wide range of commodities” are experiencing higher prices. He’s predicting that uranium, potash, wheat and oil production will push Saskatchewan’s economy forward by 3.5 percent in 2008, and 3.25 percent in 2009, compared to national growth rates of 1.5 percent and 2.5% respectively.


The Saskatchewan economy was the subject of much speculation in 2007, but ultimately underperformed on the most bullish predictions, which had forecast real GDP growth between 4 and 4.8 percent. Saskatchewan’s real GDP growth came in at 2.8 percent, just slightly above the national average. However, Saskatchewan’s nominal GDP growth through 2007 was exceptionally strong at 11.4 percent, topping all provinces except Newfoundland and Labrador. Real GDP measures changes in production, while nominal GDP measures the actual dollar value of the economy. You might say that we worked 2.8% harder, but earned 11.4% more.


Read the Saskatoon Star Phoenix story by Wendy Gillis here.


Read also: Saskatchewan Economy Underperforms on Expectations

Read also: The Rest of the Economic Growth Story

Read also: Saskatchewan Could Become an Embarrassment of Riches: RBC

See a Google map displaying the boundaries of Saskatoon real estate “areas” here
Data collection and calculation for our statistical reports

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

The rest of the Saskatchewan economic growth story

On April 30, I wrote a post titled, “Saskatchewan Economy Underperforms on Expectations,” following the release of StatsCan’s report on provincial economic performance, which showed Saskatchewan’s “real gross domestic product” at a disappointing 2.8% over 2007, well below the expectations of several Canadian economists. This post set off a fire storm of discussion with many concluding that Saskatchewan is a losing province, hardly able to top national GDP averages in spite of receiving all kinds of positive press across the country and around the globe.


The rest of the story followed this week as StatsCan released a report on “nominal gross domestic product,” which stated that Saskatchewan has “stepped into a new era of prosperity.”


It’s my understanding that real gross domestic product is a measurement of productivity in an economy, while nominal gross domestic product is a measurement of dollar volume generated by an economy. Apparently, it’s the latter that gives Saskatchewan much higher marks.


From the StatsCan Report


  • Newfoundland and Labrador’s economy led the nation in terms of growth in nominal gross domestic product (GDP) in 2007, at 13.4%. Saskatchewan followed with growth of 11.4%, ahead of Alberta’s 8.3%.
  • Newfoundland and Labrador’s growth in nominal GDP of 76% between 2002 and 2007 also topped Alberta’s gain of 73%. Saskatchewan posted the third highest gain over the period, its GDP advancing 49%.
  • Higher crude oil prices have been driving the boom in Newfoundland and Labrador and Saskatchewan. They are the top producers of crude petroleum in Canada after Alberta, accounting for almost one-third of Canada’s production.
  • In 2007, Saskatchewan exported $21 billion to other countries, a 13% increase over 2006. This placed Saskatchewan behind only Newfoundland and Labrador for the title of fastest growing provincial exports. In addition to crude oil, agricultural products, potash, and uranium have made major gains since 2005.
  • Perhaps most significantly, both Newfoundland and Labrador and Saskatchewan have reversed their long-term trend of a declining population…Saskatchewan’s population grew 0.8% in 2007, its first increase in over a decade, which put the population once again to 1 million. Moreover, the population of the 15 and over age group in Saskatchewan in April 2008 was 2.0% larger than it was in April 2007.
  • As incomes have risen and population growth has resumed, Newfoundland and Labrador and Saskatchewan consumers have gone on a buying binge, leading provincial growth in retail, housing and auto sales.

Read the StatsCan report on nominal gross domestic product here.

Read the StatsCan report on real gross domestic product here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

Saskatchewan economy underperforms on expectations

Statistics Canada released its Gross Domestic Product numbers yesterday which show that the Saskatchewan economy underperformed on expectations and forecasts of RBC Economics, CMHC, and the Conference Board of Canada, all of which estimated higher growth of between 4% and 4.8% for Saskatchewan in 2007.


According to the report, Saskatchewan’s economy grew by 2.8% through 2007, just a smidge higher than the national average of 2.7% and well below the other western provinces, which saw growth ranging from 3.1% to 3.3%.


Doug Elliot of Sasktrends Monitor told the Star Phoenix that Statistics Canada’s numbers are a more accurate reflection of the provincial economy than those of private sector economists.


“I think the Conference Board (of Canada) and all of the bank (economists) have been overstating the strength of Saskatchewan’s economy.


“We’re doing fairly well, but we’re not this powerhouse that everybody seems to think we are.”


Hmmmm?


Read the Star Phoenix coverage here.

Read the StatsCan report here.


I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

How rent controls in Saskatchewan can do more harm than good

There’s a bit of a debate occurring on another post about whether or not Saskatchewan needs to implement rent control legislation.


Few would disagree that this market is extremely tough for renters and it would be difficult to make a case that Saskatoon renters don’t need some help right now. Is rent control the right way to do that or does such legislation ultimately lead to greater harm in the rental market?


Here are some points gleaned from a policy paper written by William Tucker, author of “The Excluded Americans: Homelessness and Housing Policies. Please refer to the complete document to examine the evidence in support of his position.


  • Rent controls cause frustrated property owners to sell and redirect investment dollars to a multitude of other investment opportunities that exist in the free market, ultimately reducing the supply of rental housing.

  • Rent controls produce excess demand, which further reduces the stock of rental housing for those who need it most.

  • Rent controlled housing tends to come off of the market and stay off of the market forever. Renters just don’t move.

  • Rent controls create closed communities, which excludes newcomers from entering the market.

  • Rent controlled housing tends to fall into the hands of middle-class professionals, not the poor.

  • Rent controls provide an incentive for landlords to neglect property and tenants.

  • Historically, vacancy rates are significantly lower in rent controlled areas than they are in free and open rental markets.

  • Median rents tend to be higher in areas with rent control than in areas that aren’t controlled.

  • Rent controls reduce the quality and quantity of housing available to renters.

Standard supply-and-demand theory predicts that any price controls, including rent controls, will produce an excess of demand over supply–an economic “shortage.” There is virtually no disagreement on this premise. In a survey of 75 of the world’s outstanding economists, J. R. Kearl and his colleagues found nearly unanimous agreement on the proposition: “A ceiling on rents will reduce the quality and quantity of housing.”


I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

Saskatchewan income growth: the good news and the bad news

Statistics Canada’s latest income report contains some good news for the province. Saskatchewan led the country for overall income growth seeing average weekly earnings increase by 5.4%, compared to the 3.1% growth experienced nationally. Average weekly earnings in the province rose to $742.62 in December of 2007, from $704.79 in December of 2006. Saskatchewan also saw one of the largest decreases in Employment Insurance recipients.


If you’re looking for the negative nugget in this story, you could point to the fact that average weekly incomes in Saskatchewan still lag behind the national average of $782.02 and well below Alberta, the province we seem desperate to become where the average weekly income is $860.31.


Hopefully with the momentum that Saskatchewan seems to have 2008 will be the year that incomes catch up with the rest of the country.


Read the Star Phoenix coverage here

Read the StatsCan report here

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate