The Economy. background
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- Leslie Arnold
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1 background The Economy Saskatoon s booming economy will bring significant changes to the city. As a hub for natural resource and agricultural industries Saskatoon houses the head offices of major corporations and many businesses involved in manufacturing and distribution. The University of Saskatchewan has spun off a number of businesses in the agriculture and bio-tech industries. Additionally, there are a range of retail and service industries and thousands of home-based businesses throughout the city. Saskatoon has the opportunity to further diversify the economy by focusing on entrepreneurship and creative industries. To ensured continued growth, it will be critical to maintain a skilled workforce by ensuring the city s young people have educational opportunities and attracting immigrants. With so many assets, Saskatoon could sustain strong economic growth for many years, if it maintains a skilled workforce and remains competitive.
2 The strongest economy in Canada In 2008, the city s gross domestic product (GDP) grew by 5.4 percent, making it the fastest growing city in the country, and the employment rate is third highest among Canadian metro regions. Over 1,000 new commercial or home-based businesses were established in Saskatoon in 2008, and over $900 million were invested in residential and nonresidential buildings. On the heels of the global recession, the city s economy dipped in 2009 but has rebounded in Its rate of job creation in January was the second highest among the 27 largest metro areas in the country. The Conference Board of Canada predicts the Saskatoon economy will grow by 2.8% this year. Another promising sign is the increase in housing starts in the first quarter of 2010 in April, 2,354 homes were under construction. Many economists are predicting the province s and Saskatoon s boom times will continue for the foreseeable future. Just a Prairie Boy ~ Darryl 6.0% 6, % 5, % 4, % 3, % 2, % 1, % population Saskatoon Real GDP Growth (%change) (source: Strategic Intelligence Report, / data relates to the Census Metropolitan Area of Saskatoon) Number of Licensed Businesses and Institutional Agencies (source: City of Saskatoon, Business License Program, ) commercial business home based business institutional agencies 7.8% 7.2% 6.9% 4.6% 4.8% 5.5% 9.4% 6.2% 9.1% 6.5% Vancouver Calgary Edmonton Saskatoon Regina Unemployment Rates in Major Canadian Cities (year ending 2009) (source: Statistics Canada Labour Force Characteristics) Winnipeg Toronto Ottawa Montréal Halifax 2
3 A hub for Canada s resource economy and innovation Agriculture and natural resources are mainstays of the provincial economy. Saskatchewan has an abundance of wheat, canola, oil, natural gas, potash, uranium, base metals, gold, diamonds, coal and wood, all commodities in high demand around the world. For most of the large companies involved in agriculture and mining in the province, Saskatoon is a head office base and centre for manufacturing and services. courtesy of Indiana University, Melvin&Bren Simon Cancer Center category best overall highest quality most innovative leaders of tomorrow #15 #09 #18 #13 #13 #08 #18 #09 Summary of University of Saskatchewan Rankings out of 48 participating universities (source: Maclean s 2009 University Rankings) As well as the resource sectors are doing, there is another reason why Saskatoon s economy is outperforming nearly every other Canadian city. The University of Saskatchewan, whose ranking rose sharply between 2007 and 2009 (see graph below), has pushed to the forefront of institutions turning research into economic opportunities. A number of companies have been spun off from university research, notably in the areas of agriculture bio-technology, nutraceuticals and food processing. And many of them have a home in Innovation Place, considered one of the most successful university-based research and technology parks in the world. The Canada Light Source Synchrotron developed in the 1990s, which supports a wide range of research activities, has cemented the city s status as an innovation hub. Saskatoon, in fact, has one of the most diverse economies in the country. As the graph below illustrates, nearly all sectors of the economy enjoy adequate levels of employment, and nearly all of these experienced strong growth in recent years. 15,000 12,500 10,000 7,500 5,000 2,500 0 number of employees agriculature, forestry and fishing utilities mining, oil, and gas extraction construction business, building and support servicies information, culture and recreation transportation and warehousing wholesale trade finance, insurance, real estateand leasing other services scientific, technical and professional serices public administration accomodation and food services manufacturing health care and social assistance educational services retail trade Total Employment by Industry Sector, 2006 (source: City of Saskatoon, Business License Program, 2006) The Saskatchewan economy appears to have considerable staying power. The forces of high commodity prices, rising profits and booming investment will continue to drive up household incomes and government revenues, which in turn will be recycled back into the economy and housing markets. The Saskatchewan Economy of 2008: The Resurgence of the Resourceful, TD Economics Special Report, June 4, BACKGROUND INFORMATION SASKATOON SPEAKS 3
4 The creative economy The cultural and creative sector of the economy, relatively small but growing in Saskatoon, will play an increasingly important role in attracting and retaining young people. The sector covers a broad spectrum of industries, from traditional arts and design professions (e.g., architecture, landscape architecture, graphic design) to digital media, publishing and broadcasting. In the digital age, the potential for this sector to grow is enormous. The presence of the University of Saskatchewan, SIAST, Saskatchewan Indian Institute of Technologies and Gabriel Dumont Institute, together with city s strong arts and culture scene, gives Saskatoon a solid foundation on which to expand its creative economy. A competitive city The migration of people from other provinces and overseas to Saskatchewan is fueled by new job opportunities but also a very attractive business climate and quality of life. The Fraser Institute considers Saskatchewan to have the third most favourable business environment among the provinces, and the overall costs of living and doing business are among the lowest in Canada. KPMG s 2010 study of the cost competitiveness of 112 selected cities around the world ranks Saskatoon the third most competitive in Canada, ahead of Vancouver, Edmonton, Toronto and Montreal and just behind Halifax and Winnipeg. Among comparable American cities in the West and Midwest, it was the most competitive. 60% 50% 40% 30% 20% 10% 0% creative/arts schools graphic design services architectural services motion picture and video production art dealers periodical publishers newspaper publishers post-production, motion picture, video industries landscape architecture services libraries integrated record production/distribution other specialized services book publishers radio broadcasting sound recording studios television broadcasting other sound recording industries support activities for printing Change in Number of Creative Business Establishments, (source: City of Saskatoon, Business License Program, 2009) courtesy flickr daryl_mitchell 4
5 Sustaining a strong economy While the outlook for Saskatoon s economy is rosy, economists at TD Bank have identified opportunities to make the provincial economy even stronger and sustain growth over the long term. These include: Addressing the infrastructure deficit and ensuring municipalities have adequate tools and flexibility to address surging growth challenges; Continuing to build on cost competitive advantage (i.e., try to keep taxes low); Using resource strength to build a more diverse economy (e.g., turn the province into a clean energy powerhouse); Alleviating the problem of poverty; Addressing skilled labour shortages. On this last point, there is increasing concern that, given Saskatoon s aging population and competition with other cities, it will be a challenge to sustain the workforce needed to support economic growth. The key to avoiding a shortage of workers is to bring more members of the under-represented portions of our population into the workforce, such as Aboriginal people, visible minorities, immigrants already in Canada, women, disengaged youth, people with disabilities, as well as continued immigration from other countries. Increasing the education rates for Aboriginal people will play a key role in maintaining an adequate pool of skilled workers (and would help to alleviate the city s problem of poverty). To this end, the University of Saskatchewan has developed assistance programs aimed at increasing its Aboriginal student population. In May this year, the Saskatoon Health Region, the city s largest employer, launched a new representative workforce strategic action plan, Awaken the Power of Change, to increase the number of First Nations and Métis employees over the next four years. Ensuring Saskatoon s youth, many of whom are Aboriginal, have access to a full range of educational and employment opportunities, as well as attracting immigrants, will be key to fostering a creative, competitive and growing economy. courtesy flickr daryl_mitchell BACKGROUND INFORMATION SASKATOON SPEAKS 5
6 There are a number of ways to share your vision and help shape Saskatoon s future! For more information please visit saskatoonspeaks.com. Produced September 2010 Efforts were taken to ensure the accuracy of information. Updates to any of the content will be posted to the website. We encourage everyone to return the information book for re-use at all Saskatoon Speaks events and activities. 6
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