VOLUME 3/ QUARTER 1 2010
THE SASKATCHEWAN CHAMBER OF COMMERCE NEWS MAGAZINE
A Year In Statistics More People Than Ever Before
Recap - Political Forum JayDee AgTech - Growing Across Sask. Legislative Report
Publication Mail Agreement # 40916054
Capture our Potential The 2010 Conference on Business
May 5 - 7, 2010 Prince Albert, Saskatchewan
R E A S O N S T O AT T E N D
The Province’s Premier Business Conference
NETWORK WITH BUSINESS LEADERS The Conference is attended by over 150 Business Representatives from across the province.
HEAR INTERESTING SPEAKERS Attend five sessions focused on helping businesses capture Saskatchewan’s potential.
The 2010 Conference on Business offers an extensive speaker lineup aimed at helping your business grow and expand into new markets.
HELP DEVELOP CHAMBER POLICY Do your part to make sure the Voice of Business is heard in Saskatchewan.
AT T E N D T H E C H A I R ’ S D I N N E R Join other business leaders in a celebration of the volunteers who are helping to make our province the best place to live, work and
Learn about new opportunities in Saskatchewan, innovative approaches to doing business and so much more.
visit www.saskchamber.com for more information saskatchewan chamber of commerce
invest.
The Early Bird Registration Rate is only available until March 12, 2010.
W W W. S A S K C H A M B E R . C O M
Contents
action! volume three quarter one
A Message from the Chair ................................................................... 4 Members in the News ........................................................................... 5 Legislative Report ................................................................................. 6 2009 Statistics A Year in Review ...................................................................... 8 Shaping Policy at Political Forum ................................................... 13 Member Profile JayDee AgTech .......................................................................... 14 Rants and Resolutions Environmental Reform and Change Management ....... 16
The Saskatchewan Chamber of Commerce Vision: Saskatchewan Business making Saskatchewan the best place to live, work and invest. Mission: To strengthen Saskatchewan’s business community and competitive enterprise system for an improved quality of life. action! Magazine, a publication of the Saskatchewan Chamber of Commerce. Reproduction of any material contained in action! is permitted provided credit is given to the Saskatchewan Chamber of Commerce.
December/ January By the Numbers ...................................................................... 18
Opinions expressed by contributors are their own and do not necessarily represent those of the Saskatchewan Chamber.
Welcome New Members
Editor: Kristin McKee
Team Drilling
3035A Miners Avenue Saskatoon, Saskatchewan Ph: (306) 955-8326 Website: www.teamdrilling.com Contact: Robert Fleming, President/ General Manager Description: Team Drilling is a Canadian owned and operated company based on knowledge, experience, integrity, and safety, and is focused on providing a premier drilling service for underground and surface exploration in the minerals industry.
HTC Purenergy
150 – 10 Research Drive Regina, Saskatchewan Ph: (306) 352-6132 Website: www.htcenergy.com Contact: Lionel Kambeitz, Chairman & CEO volume 3/ quarter 1
For membership information or to refer your leads please contact: Trevor Doroshenko at 352-2671. Description: HTC Purenergy is a leading provider of technologies which enable industrial emitters to significantly and economically reduce greenhouse gas emissions.
Bayshore Home Health
150 – 1870 Albert Street Regina, Saskatchewan Ph: (306) 352-7144 Website: www.bayshore.ca Contact: Brian Smyth, Area Director – Regina Description: Bayshore Home Health provides a variety of healthcare services including those provided to home-bound patients, as well as clinic-based care and services.
The Saskatchewan Chamber of Commerce’s 2009-2010 Officers Chair: Holly Hetherington Immediate Past-Chair: Dale Lemke 1st Vice-Chair: Richard Ahenakew 2nd Vice-Chair: Colleen Vancha Staff: Steve McLellan, CEO Dawn Boxall, Administrative Assistant Trevor Doroshenko, Membership Coordinator Kristin McKee, Communications Coordinator Kristen McLeod, Event & Project Coordinator Curtis Hemming, Research Coordinator Peter Prokopiw, Finance Coordinator The Saskatchewan Chamber of Commerce 1630- 1920 Broad Street, Regina, Saskatchewan S4P 3V2 Ph: 306-352-2671 Email:
[email protected]
3
A Message From the Chair
The Benefit of Thinking Big Everyone in Saskatchewan descended from an ancestor who had a “big idea.” Many of our ancestors came here from somewhere else, and they all came with a hope and an idea. We need this big thinking today. Whether of the left or the right, we’ve had governments with big ideas. The present administration’s next budget will set the stage for a new way of providing public services in Saskatchewan, a new vision for our public sector. The upcoming State of the Province Address is an opportunity for the Premier to explain what this means for the province’s business community. But we tend to rely too much on the government to lead. How many times have you heard when faced with a problem that “the government should do something” about it? But most often, the best answer is for the government not to “do something”, but to step aside so individuals and groups can do things. The genius of Saskatchewan is in its people’s ideas, their resourcefulness, resilience, and enterprise. We need to look to ourselves. A Big Idea has recently come out of the Regina and District Chamber. They propose to dedicate the money saved by no longer having to pay interest on public debt (40% of which has been paid down in the last two years), to the direct reduction of education property tax. It raises the very good question of why we have an education property tax. And it draws attention to the many flaws of property tax generally. A Big Idea indeed. Education itself needs Big Ideas. How about the idea that a Grade 12 diploma means you really do have the numeracy and literacy levels of a Grade 12 graduate? How about finding new ways to help more kids graduate – not by imposing more faddish, centrally-mandated curricula, but 4
We tend to rely too much on the government to lead. How many times have you heard when faced with a problem that “the government should do something” about it? But most often, the best answer is for the government not to “do something”. by unleashing the grassroots ingenuity of our professional teachers? Too many Saskatchewan students leave the traditional school system before Grade 12, or receive a high school diploma without the skills to actually read it. If we want to grow and our people to benefit, we need a knowledgeable workforce. And we need students who understand what it means to be a citizen of Canada, to participate in our democratic institutions and our market economy. The Saskatchewan Chamber has been working on the issues related to K-12 student achievement. We are slowly gaining traction with the government. When we first met with the Education Minister in January 2007 the government was not ready to acknowledge declining student achievement as a priority issue. However since then, the Premier has mandated a Deputy Minister Working Group to focus on Aboriginal education, and the ministry struck a panel (albeit an insiders group) to look at student achievement. These only scratch the surface, but they at least acknowledge a problem, which is the most basic first step toward a solution. The situation calls for revolutionary not evolutionary change. We need to re-think how schools work. We need new models that empower teachers, engage parents, and meet real student needs. We have to recognize that students cannot simply be turned over to the school for 12 years, that they come first of all from families and that families must engage with the school in order for education to happen. We need
choices, innovation and responsiveness that empower teachers and parents. The dollars will have to follow the student, and authority will have to devolve to the school and to the teacher, with both autonomy to respond, and accountability for result. We need Big Ideas. The Chamber has proposed a “Student First” review of the education system, a parallel to the Patient First initiative in health. We have to target excellence. We need the audacity of an “Own the Podium” program that thinks big and sets out to make our students first in Canada instead of our current 7th or 8th ranking. Big Ideas can take our province places. We’ve done it in environment. It was almost 6 years ago that the Saskatchewan Chamber proposed a Big Idea, a New Environment Management Model that sets standards but does not use the old command-and-control model to govern how they are achieved. Instead the new model mandates those involved to use their ingenuity and enterprise to meet standards. Legislation introduced last fall will make the results-based regulatory framework a reality. So what’s your big vision for Saskatchewan? Our first Premier Walter Scott said “This is a big land, with big people, with big ideas…”, Let’s think bold and dare to try. It’s what built this province and it’s what will carry us forward. Please share your ideas with me at
[email protected]. action!
Members
In the News Congratulations to the Saskatchewan Chamber of Commerce members named to Saskatchewan’s Women of Influence, as recognized by Saskatchewan Business Magazine: Susan Gorges - CEO of SpringBoard West Innovation. Barb Pollock - Vice President of External Relations at the University of Regina. Linda Haverstock - CEO of Tourism Saskatchewan Also, congratulations to the other 2010 Women of Influence: Tracey Bakkeli from the Regina Regional Opportunities Commissions; Melanie Boldt, from Pine View Farms; Tracy Fahlman from the Regina Hotel Association, Randy Goulden, from Tourism Yorkton; and Laurie Powers, from the Saskatchewan Roughriders Board of Directors. Congratulations to Rene Carpentier and Mark Hustak from Paradigm Consulting Group, Bruce Anderson
from b-creative group, Cam Cooper from Sigma Analytics, Karen O’Brien from Deloitte and Teresa Quilty from Cameco Corporation for receiving their Certified Management Consultant (CMC) designation. Lori Thompson is the new Chamber Administrator for the Meadow Lake and District Chamber of Commerce. Kevin Wilson, a lawyer with MacPherson Leslie and Tyermen, recently received a Queen’s Counsel designation. Congratulations. Leah Milton has been elected as the new president of the Battlefords Chamber of Commerce, replacing Kelly Bahrey. Mayo Schmidt, President and CEO of Viterra, Marcella Szel, Q.C., Former VP, Marketing and Sales, Canadian Pacific Rail, and Lionel LaBelle, President and CEO, Saskatchewan Trade and Export Partnership have been appointed to the Board of Directors of the Global Transportation
Hub Authority. BHP Billiton has earmarked $240 US million for the development of its Jansen project in Saskatchewan, which is about 140 km east of Saskatoon. The Saskatchewan Research Council, together with the Governments of Canada and Saskatchewan, recently announced an investment of almost $9 million dollars in the commercialization of a DNA-based process for wheat identification. Congratulations to Kramer Ltd., Saskatchewan Minerals Inc., Concentra Financial, Walker Seeds Ltd., and West Wind Aviation for being named among the 50 Best Managed Companies in Canada for 2009. Meyers Norris Penny was named one of the top 50 employers in Canada as per the survey results from Hewitt Associates. Well done!
Make a Connection Reception Presented by the Saskatchewan Chamber of Commerce in partnership with CGA - Saskatchewan This is an opportunity for Chamber members from across the province to meet with senior government officials . The reception is a comfortable and casual opportunity to establish and reaffirm good working relationships between government officials and the business community. Join us for unique Saskatchewan appetizers and our host bar. saskatchewan chamber of commerce
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April 1, 2010 RCMP Heritage Centre 5 9 0 7 D e w d n e y Av e n u e 4:00 - 6:00 p.m. $75.00 + GST / person includes appetizers & a h o s t b a r.
Register online at www.saskchamber.com 5
A Guide to Provincial Politics
Legislative Report Red Tape Reduction
The Government of Saskatchewan recently released a Red Tape Reduction Update. Reducing red tape has been a key initiative of many of the Saskatchewan sector teams and the Regulatory Modernization Council. This latest update details the steps taken by ministries, Crowns and agencies to reduce regulatory barriers and improve service delivery for businesses and citizens. The Red Tape Reduction Update is available at www.enterprisesaskatchewan.ca.
Joint Cabinet Meeting
The Province held its first-ever joint cabinet meeting with Manitoba in February. During the meeting the two jurisdictions agreed to work toward streamlining transportation regulations and coordinating highways enforcement and trucking inspections. They also committed to pursue options to expand the trade of electricity between the two provinces. Another joint cabinet meeting is planned for 2011.
Land Sales Increase
February’s sale of Crown petroleum
6
February’s sale of Crown petroleum and natural gas rights brought in $39.5 million in revenue for the province. This is up significantly from the February 2009 sale which only generated $6.3 million. and natural gas rights brought in $39.5 million in revenue for the province. This is up significantly from the February 2009 sale which only generated $6.3 million. February’s sale included 18 petroleum and natural gas exploration licences that sold for $10.3 million and 293 lease parcels that attracted $29.2 million in bonus bids. The total revenue from land sales for the 2009-10 fiscal year is $151.4 million. The next sale of Crown petroleum and natural gas dispositions will be held on April 12, 2010.
Irrigation Projects Funded
Additional federal and provincial funding has been provided to the South Saskatchewan River Irrigation District, Riverhurst Irrigation District and Luck Lake Irrigation District. The funding will help these irrigation projects expand irrigation capacity by 15,000 acres. The additional funding will go toward hiring of engineering consultants to design the irrigation distribution works and contractors to install the pumps, pipelines and power lines. The recent announcement provides additional federal funding of $810,000, for a total of $5.58 million, is being provided under the Community Adjustment Fund. The Government of Saskatchewan is contributing an additional $90,000 to these projects, resulting in a total provincial contribution of $190,000 each to the Riverhurst and SSRID Districts and
$240,000 to the Luck Lake Irrigation District.
Vietnam Targeted for Future Immigrants
The government of Saskatchewan has recently signed a Memorandum of Understanding (MOU) with the Government of Vietnam. The memorandum is focused on immigration, education and entrepreneurship. The Saskatchewan Institute of Applied Sciences and Technology’s (SIAST) operates an overseas “skills passport” project, which focuses on skills assessment to facilitate foreign credential recognition for specific skilled workers in Vietnam. The government is hoping to increase the number of immigrants the province attracts from this region.
Employee Investment Program
Under the Employee Investment Program, the provincial government is encouraging employee investment in local businesses. The program allows employees to invest in the company they work for through a venture capital fund. The shared ownership structure allows businesses access to funds that can provide equity capital for business expansion. Additionally, it can help improve employee attraction, retention and productivity as part ownership is seen as an attractive attribute. The program allows employees to receive action!
a 20% provincial tax credit and a 15% federal tax credit on the first $5,000 they contribute each year. The government currently has 35 companies registered in the program. For more information go to www. enterprisesaskatchewan.ca.
Sask. Markets Itself Abroad
Energy and Resources Minister Bill Boyd recently lead a government investment mission to Hong Kong, Beijing and Tokyo. During the trip significant interest was shown in Saskatchewan’s oil investment opportunities and a Memorandum of Understanding was signed between SaskPower and the Huaneng Group Research and Development Centre to seek out opportunities to co-operate on Carbon Capture and Storage (CCS) technology. Another Memorandum of Understanding was signed with the Sojitz Corporation in Japan to jointly study CCS technology. The agreement will allow SaskPower to learn from Sojitz’s cutting edge research as a member of the Global Carbon Capture and Storage Institute.
STC President Retires
Ray Clayton, President of the Saskatchewan Transportation Company (STC) for the past five years, has retired effective January 3, 2010.
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Beginning March 31, 2010, 14 and 15 year olds must complete the province’s interactive Young Worker Readiness Certificate Course (YWRCC) and obtain a certificate of completion in order to work in Saskatchewan. Shawn Grice, STC Chief Financial Officer, will assume the role of Acting President and CEO until a permanent appointment is made.
Agreement Reached on Buy American Provision
The federal government reached an agreement regarding the Buy American provision attached to US stimulus spending in February. The original stimulus provisions deprived Canadian producers of a chance to bid on infrastructure projects financed by the $787 billion US stimulus investment. However under the new agreement, Canadian companies have access to projects totaling about $18 billion, with conditions applied relating to the size of the project. The deal has been criticized as being too late to affect Canadian suppliers as the majority of the projects available have already been awarded. In exchange for improved access to contracts, Canada is giving U.S. companies full access to bid on local provincial and municipal infrastructure projects until September 2011.
Young Workers Need to be Certified
Beginning March 31, 2010, 14 and 15 year olds must complete the province’s interactive Young Worker Readiness Certificate Course (YWRCC) and obtain a certificate of completion in order to work in Saskatchewan. Additionally, 14 and 15 year olds must now get written consent from a parent or guardian, work no more than 16 hours during a school week, and must not work after 10 p.m. on a day preceding a school day or before the time that school starts on any school day. It is the responsibility of employers to keep copies of their 14 and 15 year old employees’ parent or guardian’s consent, proof of age and YWRCC certificate of completion on file. For more information visit www. aeel.gov.sk.ca/ywrcc.
Rate Increase Proposed
SaskPower has applied for a 7% system average rate increase which would take effect Aug. 1, barely 14 months after the last 8.5% rate hike. Under the new application the average rate increase for a typical residential customer would be approximately 7.5%, or $6 per month, and for a typical farm customer, the average monthly rate increase would be approximately 8.8%, or $16 per month. The utility justified this increase by saying it needs additional revenues to pay for expensive upgrades to its power generating and distribution systems. Company officials have also indicated that customers should prepare themselves for more rate increases of a similar magnitude, possibly every year.
7
2009 Statistics
A Year in Review Considering economic circumstances, the Saskatchewan economy did remarkably well in 2009. While the indicators for virtually every other province turned down, most of the Saskatchewan statistics just went flat for a while. The statistics for 2009 are not as positive as the ones for 2008 but in many cases they lead the nation. Any growth in 2010 will need to come from the private sector because consumers and the public sector are expected to spend 2010 repairing their respective balance sheets. Both the federal and provincial governments will be restraining spending to control the debt that arose from the extra spending on stimulus programs and the lower tax and royalty revenues.
Population Saskatchewan’s population was on a downward trend after the turn of the decade but this changed in 2007 with a 1.3% increase and the growth continued into 2008 and 2009 with 1.5% and 1.6% respective annual increases. The population reached 1.035 million late in 2009, an all-time high for Saskatchewan.
A Quick Glance - 2009 Population, 1.035 million up 1.6% Employment - up 1.5% Avg. Hourly Wage - up 6.0% Retail Sales - down 2.3% Value of Manufactured Products - down 11.0% Value of Bulding Permits down 14% Value of Merchandise Exports - down 26% Inflation Rate - up 1% 8
Three factors affect the population of the province and all three contributed to the strong growth. The natural growth rate (births less deaths) will be near 4,500 in 2009 as Saskatchewan enjoys a mini baby boom. Interprovincial migration, which has often been a negative factor, was positive in 2009 for the third year in a row. Finally, the third factor affecting population growth is international migration flow; net migration from other countries will have increased by nearly 50% in 2009. Alberta is still the most common source for interprovincial in-migrants moving to Saskatchewan, accounting for 46% of the total. Ontario, which accounts for 22% of in-migrants, is becoming a more important source, as is British Columbia, which now accounts for 16% of those moving to the province from elsewhere in Canada. Only preliminary estimates are available about where the population growth is occurring but these estimates suggest that the growth is occurring in both small and large urban centres.
Saskatchewan Population 1,040 1,030
thousands as of Oct 1
1,020 1,010 1,000 990 980 970 2001 2002 2003 2004 2005 2006 2007 2008 2009
Components of Population Change 8 6 4
thousands
natural growth
2 0 -2 -4 -6 -8 -10
net international flows net interprovincial flows
-12 2001 2002 2003 2004 2005 2006 2007 2008 2009 est
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Employment and Earnings Employment in Saskatchewan increased by 1.5% in 2009 to reach 520,600 persons. This is a lower rate of growth than in 2007 or 2008 but still respectable; Saskatchewan was the only province to show any appreciable employment growth in 2009. Employment in Canada as a whole declined by 1.6%; it fell by 1.3% in Alberta and was unchanged in Manitoba. Employment increased in eleven of fifteen industry groups with the largest percentage increases (near 6%) in public administration (the three levels of government), agriculture, personal/household services, and the management and administrative support group. There were large declines in manufacturing (-7.8%), the resource sector (-5.1%) and the accommodation/food services group (-4.5%). The labour market is weaker than it has been for a few years. The number of people working part-time increased by 8.8% whereas the number working full-time grew by only 0.3%. All of the increase was either among the self employed (up 6.1%) or paid workers in the public sector (up 4.5%). The number of paid workers in the private sector dropped by 1.3%. Employment among older workers continued on its upward trend in 2009 with an 8.4% increase among those
55 years of age and older and a 4.2% decline among those 15 to 24 years of age. Employment among women grew by 2.7% compared with a 0.5% increase among men.
Employment in Saskatchewan 530 520
thousands
510 500 490
An increase in public sector employment and a drop in the number of low skilled jobs in the resource and construction sectors had a predictable effect on the education levels of Saskatchewan workers. The number of people with less than grade 12 who were able to find work dropped by 8% whereas the number with a postsecondary education increased by 4%.
480 470 460 450 440 430 2001 2002 2003 2004 2005 2006 2007 2008 2009
Annual Employment Growth in 2009, Saskatchewan Provincial Total
The fastest growing regions in the province were the metropolitan areas of Regina and Saskatoon but employment also grew at an aboveaverage rate in the North. On the other hand, employment dropped by almost 3% in the Weyburn/Estevan area.
Southeast East central West central Southwest P.A./North Regina CMA Saskatoon CMA -4%
Changes in wage rates and earnings tend to lag changes in the economy so wages and earnings grew strongly in 2009 even though the labour market weakened. The average hourly wage rate was up 6.0% to reach $21.55 for the year. Gross weekly earnings, including overtime, will grow by less than this (near 2.3%) because of a drop in premium pay and a reduction in average hours worked. Both of these increases are well above the rate of inflation so the purchasing power of the average paycheque increased in 2009.
CMA = metropolitan area
-2%
0%
2%
4%
Annual Increase in Average Hourly Wage Rate in Saskatchewan 8% 7%
paid workers only
6% 5% 4% 3% 2% 1% 0% 2001 2002 2003 2004 2005 2006 2007 2008 2009
Employment among older workers continued on its upward trend in 2009 with an 8.4% increase among those 55 years of age and older and a 4.2% decline among those 15 to 24 years of age. Employment among women grew by 2.7% compared with a 0.5% increase among men. The number of people working part-time increased by 8.8% whereas the number working full-time grew by only 0.3%. volume 3/ quarter 1
9
2009 Statistics
A Year in Review continued The 2009 figures show gross sales increased in about one half of fifteen store categories. The largest increases were among pharmacies, liquor stores, garden centres and specialized building materials stores such as carpet and lighting stores.
Gross Retail Sales in Saskatchewan 14% 12%
annual increase
10% 8% 6% 4%
Retail Sales
Retail sales were growing at unsustainable levels in 2007 and 2008 so a correction was overdue. Measured in dollar terms, retail sales dropped sharply in December 2008 and have since grown at a more subdued annual rate of about 4%. Averaged over the year, gross retail sales were $14 billion in 2009, down 2.3% from the $14.4 billion in 2008. A quarter of retail sales are accounted for by motor vehicle dealers in general and from the sale of new motor vehicles in particular. Unit sales of new vehicles were down 9% in 2009 with the average price paid steady near $34,000.
The 2009 figures show gross sales increased in about one half of fifteen store categories. The largest increases were among pharmacies, liquor stores, garden centres and specialized building materials stores such as carpet and lighting stores. The biggest drop was in service stations but most of this will be price related because of a decline in the price of gasoline. The slower consumer spending in 2009 will have made some progress in repairing personal balance sheets and reducing debt so retail sales should return to modest growth rates in 2010.
2% 0% -2% -4% 2001 2002 2003 2004 2005 2006 2007 2008 2009
Change in Gross Sales by Kind of Store, 2008 to 2009 Service stations New motor vehicle dealers Used vehicles, recreational vehicles, and auto parts Home electronics & appliances Shoes, clothing accessories, jewellery Home centres & hardware Furniture stores General merchandise (incl dept stores) Clothing stores Supermarkets Home furnishings stores Sporting goods, music, books
Employment in the retail trade sector dropped by 3% in 2009.
Beer, wine, liquor stores Pharmacies and personal care Specialized building materials and garden centres -20%-15%-10% -5% 0% 5% 10% 15%
Manufacturing Sales
After growing strongly over the previous five years with annual increases averaging 9% per year, the value of manufactured products dropped by 11% in 2009. Some of the drop will be price related but this was evidence that the sector was suffering from a lack of demand in other provinces and countries. The sales drops were widespread 10
with declines in most kinds of manufactured goods. Machinery manufacturers were a notable exception with an estimated 6% increase in the value of 2009 sales compared with 2008. The largest drops were in fabricated metal products such as steel pipe. Employment in manufacturing fell by 8% in 2009.
Manufacturing Sales in Saskatchewan $13 $12
$ billions
$11 $10 $9 $8 $7 $6 $5 2001 2002 2003 2004 2005 2006 2007 2008 2009
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Construction
The value of building permits in both the residential and non-residential building construction sectors topped $1 billion in 2008. The non-residential sector maintained that level of activity in 2009 whereas activity in the residential side fell by 28% to bring the total value of permits for 2009 to $1.9 billion, down 14% from 2008. Part of the decline will be related to lower prices for some construction materials. Construction activity slowed in Saskatoon and in rural areas but increased by 22% in Regina.
International Merchandise Trade
Driven by declines in both volume and price, the value of merchandise exports fell by 26% in 2009, erasing most of the remarkable 53% increase in 2008. Imports fell as well so the value of net trade declined by 29% for the year. Only a small part of the change in international trade is related to changes in the exchange rate. The loonie was worth 88¢ US in 2009 compared with 94¢ US in 2008. The export growth in 2008 was most pronounced among resource products, the value of which grew by 72%
After two years of frenetic activity, housing starts dropped by 43% to end 2009 at 3,866 units. The resale market picked up during the year with a 6% increase in the number of sales through the MLS service. A recovery in prices late in the year kept the average selling price high, increasing to $234,000, 5% higher than in 2008. Employment in the construction industry (which includes engineering as well as building construction) grew by 5% in 2009.
measured in Canadian dollars before falling back by 36% in 2009. The value of both manufactured goods and agriculture products dropped by smaller amounts - 14% and 13% respectively.
Value of Building Permits Issued in Saskatchewan $1,200 $ millions $1,000
Residential
$800
NonResidential
$600 $400 $200 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009
International Merchandise Exports from Saskatchewan $18 $16
$ billions
$14 $12 $10 $8 $6 $4
The USA remains our largest trading partner, accounting for 61% of the value of exports compared with 64% in 2008. India and China are the second and third largest buyers but together they account for only 10% of total merchandise exports from Saskatchewan. The remaining 29% is widely dispersed among different countries.
$2 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 est
Agricultural products
Resource products
Manufactured goods
International Merchandise Trade to/from Saskatchewan $35 $30
$ billions
$25 $20
exports
$15
The USA remains our largest trading partner, accounting for 61% of the value of exports compared with 64% in 2008. India and China are the second and third largest buyers but together they account for only 10% of total merchandise exports from Saskatchewan. volume 3/ quarter 1
$10 $5
imports
$0 2001 2002 2003 2004 2005 2006 2007 2008 2009 est
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2009 Statistics
A Year in Review continued The inflation rate in 2009 was only 1% but this was still the highest in Canada - several provinces including Ontario and Alberta had a decline in prices (deflation) as Canada entered a period of particularly low consumer price inflation. Nationally, the 2009 increase in the CPI was only 0.3%.
Consumer Price Inflation
The rate of inflation in Saskatchewan has been high compared with the national average over the past few years because of a booming economy in general and higher housing prices in particular. The inflation rate in 2009 was only 1% but this was still the highest in Canada - several provinces including Ontario and Alberta had a decline in prices (deflation) as Canada entered a period of particularly low consumer price
Agriculture
Gross farm cash receipts are expected to end 2009 down slightly from the $9.4 billion in 2008. The slight drop to an estimated $9 billion will be because of lower receipts from the sale of livestock and livestock products. Crop receipts should stay at 2008 levels. Agriculture will be more profitable in 2009 than in previous years because input costs, particularly fuel and fertilizer, were lower than in 2008.
inflation. Nationally, the 2009 increase in the CPI was only 0.3%. Price increases of 6% in food prices and 5% in health and personal care items were offset by a 7% decline in transportation prices to yield that low rate of inflation in Saskatchewan. The rate of inflation will increase in 2010, probably back to near the longterm average of 2%.
Consumer Price Inflation in Saskatchewan 4% annual rate of inflation 3%
2%
1%
0% 2001 2002 2003 2004 2005 2006 2007 2008 2009
Grain prices are 25% below the level a year earlier but there are some signs that they will increase this spring to help make 2010 another good year for grain farmers. There is no such recovery in sight for livestock prices. Employment in agriculture increased by 6% in 2009, perhaps because many farmers with off-farm jobs lost those jobs so that their “main” job became farming again.
Saskatchewan Farm Cash Receipts $8 $7
$ billions
Crops
$6
Livestock
$5
Program payments
$4 $3 $2 $1 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 est
These statistics are compiled by Sask Trends Monitor from reliable data sources such as Statistics Canada. Recent data are subject to periodic retroactive revisions and should be treated with caution. The views and opinions expressed do not necessarily represent those of the Saskatchewan Chamber of Commerce or its members. 12
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Member Event
Shaping Policy at Political Forum The 34th annual Political Forum brought 17 members of the Government, 8 members of the Official Opposition and 79 members of the Saskatchewan Chamber of Commerce together for a frank policy discussion in January. Political Forum is the Chamber’s largest advocacy focused event. The forum is an opportunity for business representatives to share their concerns and ideas with the government and opposition in a small group setting. This year the discussions were led by the Co-Chairs of the Chamber’s Expert Policy Committees and focused on regulatory simplification, government finances, K-12 education, energy sustainability and the role of the Crowns. “We had good quality dialogue at the event this year,” noted Chamber CEO Steve McLellan. “The session with the NDP Opposition provided a great opportunity for Chamber members to
become acquainted with new leader Dwain Lingenfelter and we were able to provide input in advance of the Party’s policy development session.” In the later session, the Premier and government representatives were particularly interested in the opinion of Chamber members relating to the upcoming budget. Premier Wall opened the session with an outline of some government objectives, and looked for suggestions on achieving these goals. “In addition to reiterating the points made during the Chamber’s prebudget consultation, which included the need to control spending, focus on efficiencies, and eliminate redundancies, the Chamber also responded to the government announcement that Ministries were asked to take a 10% reduction before asking for more optional spending increases,” continued McLellan. The Saskatchewan Chamber members in attendance were not supportive of
universal cuts across every Ministry or program. The group recognized that the government has undertaken many positive initiatives to enhance Saskatchewan’s competitive position and requested that the government provide these efforts with the resources necessary to complete their work. Chamber representatives also noted that now is the time to re-examine what is asserted to be core or foundational to government activities and what actually is. The government was encouraged to be the procurer of many goods and services but not necessarily the body which provides these services. Close examination of the opportunities for private sector participation during the budgeting process was a central theme of the discussion. Regarding revenue growth, the members recognized the value in attracting capital from other jurisdictions, but stressed that it is equally important to build an environment locally where businesses and residents can create wealth and grow the economy from within.
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Member Profile
Growing Across Saskatchewan JayDee AgTech Just over one year ago, JayDee Equipment positioned itself for the future and merged with Green Acres Equipment Ltd. (Unity), Greenstar Ag andTurf Ltd. (North Battleford), and Humboldt Farm Equipment Ltd. under a single new name - JayDee AgTech.
With the merger, JayDee now has a substantial footprint throughout Saskatchewan, ensuring that the company can provide better access to parts and equipment for customers, and see stronger financial performance and job security for owners and staff. JayDee can now also offer customers the assurance that they are dealing with a dealership that will be there to work with them in the future.
Prior to the merger, JayDee Equipment had five John Deere dealerships with locations in Swift Current, Kindersley, Maple Creek, Kyle, and Leader. The company is now one of the largest John Deere dealer networks in Canada. The creation of JayDee AgTech allows each location to provide customers with more comprehensive services.
and job security for owners and staff. JayDee can now also offer customers the assurance that they are dealing with a dealership that will be there to work with them in the future. The merger has also created more opportunities for Saskatchewan residents, as they are hiring numerous staff for new positions and projected growth.
Each individual company had its own history, but followed in the John Deere tradition of customer service and dependable products. With the merger, JayDee now has a substantial footprint throughout Saskatchewan, ensuring that the company can provide better access to parts and equipment for customers, and see stronger financial performance
A merger isn’t just an amalgamation of buildings and equipment. The management team is now made up of a diverse group of people with different skill sets, allowing for nimble problem solving and new approaches. One thing, however, that all the managers have in common is a strong desire to succeed that comes from a shared vision of the future.
That shared vision is evident in the pervasiveness of a we culture. Every single person knows that their success is dependent on the success of the entire business. Great people doing great things comes from empowerment and JayDee has made the empowerment of its people more than just a slogan. People use their business acumen and personal strengths to make decisions. Recruitment of new staff underlines this philosophy as JayDee continues to recruit the right people for positions in a tough labour market. As CEO and owner Duane Smith says, “You don’t bat 100 percent in all cases, but we’ve been fortunate when recruiting. We like to make sure it’s the right person, not just a warm body. We look for several key qualities, including lots of drive and the desire to succeed. We have a vision for the future and we look for strong management that will further our goals.” Mergers come with their share of challenges and Smith acknowledges that there have been some bumps in the road. “With a merger you talk a lot about processes for a while. Leadership takes a back seat as you get all the
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systems ironed out.” As the focus has shifted back to identifying factors for success, however, the behaviours that contribute to JayDee’s accomplishments have begun to permeate all levels of the organization. Getting the details of how different companies approached ways of doing things was time intensive but important, and having a method deployed comprehensively throughout the company has helped to maintain success. “It’s as simple as someone getting a piece of paper,” says Smith. “What do they do with it? How is it handled? We needed to make sure that our practices are consistent throughout the company.”
JayDee is focused on the future, putting succession planning principles in place and ensuring that key management is in place. Also on the horizon are capital expenditures in the North Battlefield area, facilities will continue to be modernized and upgraded.
Where do you see JayDee AgTech in 5 years? “The landscape continues to change.” says Smith. “We’re interested in diversifying through vertical integration; finding businesses that complement our existing structure.” JayDee is focused on the future, putting succession planning principles in place and ensuring that key management is in place. Also on the horizon are capital expenditures in the North Battlefield
area. Facilities will continue to be modernized and upgraded, and staff will continue to be invested in as potential partners.
Where do you see Saskatchewan in 5 years? “We’ve seen very positive changes doing business in Saskatchewan over the last couple of years. Of course there have been challenges, particularly with regards to potash price predictions, but we see the government putting the right vision in place to grow the province. This positive vision is infusing growth vibes throughout, and we will see continued success in terms of things like increased rates of immigration. The new vision of Saskatchewan – with its positive business climate – translates to the positive lifestyles and excellent benefits we have here in our province. This will only continue to benefit those who call Saskatchewan home.”
IF THE TOOTH FAIRY WON’T PAY YOUR DENTAL BILLS, WE CAN! See why over 25,000 business owners selected this plan!
volume 3/ quarter 1
15
RANTS &
Resolutions
Environmental Reform and Change Management The Saskatchewan Chamber of Commerce is supportive of the new ‘Results-Based-Regulatory’ environmental model put forward by the Saskatchewan Ministry of Environment. However, with support comes the need for two-way dialogue and clarity on the Government’s new vision. Effective change management involves dynamic and strong communication with stakeholders. In business, communicating changes to external clients is critical to a seamless (or at least less bumpy) transition both for the business and its clients. However, it seems that the Saskatchewan Ministry of Environment has missed the boat on this one. The Ministry has held a number of consultations since 2007 on its new ‘Results-Based’ regulatory environmental model. However, these
The Ministry has held a number of consultations since 2007 on its new ‘Results-Based’ regulatory environmental model. However these consultations have resulted in little to no information on what the new changes would look like in any tangible fashion. consultations have resulted in little to no information on what the new changes would look like in any tangible fashion. Further, when limited information has been provided, stakeholders have been expected to provide comment on these changes and respond within very short timelines. Stakeholders have been asked to ‘trust’ government so that government can move forward with its timelines to adopt a new regulatory model. It would have been useful, for example, to have second drafts of the proposed bills reflecting stakeholders input, before finalization to present in the legislature.
Stakeholders and government officials alike agree that the ‘devil is in the details’, yet government moves forward without provision of the details. As part of the new environmental model for Saskatchewan, an Advisory Committee for development of a new Saskatchewan Environmental Code will be established to clarify the details, yet government has not been forthcoming with how this committee will be initially established and supported by industry. Will there be an application process for those sitting on the Advisory Committee or any technical subcommittees that will support it? Will Advisory Committee representatives have the technical capacity to make decisions for Saskatchewan’s industry? Stakeholders hope and ‘trust’ that government will take the right approach and not give way to political pressures in selecting Advisory Committee representatives. Well, here’s what ‘trust’ gives you: very short notification that the Ministry is adopting the Canadian Council of Ministers of the Environment, National Classification System for Contaminated Sites. To be sure, this is a harmonized approach to the evaluating contaminated sites and providing the ability for the Ministry to review and
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comment on contaminated sites. Stakeholders should say bravo to this. However, official notification on January 18th, 2010 for implementation of this approach to be effective February 15th, 2010 is not acceptable. Businesses need to have sufficient notification and opportunity to adjust, and 28 days is not enough. This is especially true when stakeholders are keeping their focus on the development of a new Saskatchewan Environmental Code and trying to get their heads around the implementation of the new environmental model for Saskatchewan. Government needs to understand that although they may be ready to make a change, businesses (or consultants supporting them) cannot easily respond to a 30 day notification to review a large amount of material. As well, businesses need a road map so they can prioritize how they are going to adjust to all of the upcoming changes they may be exposed to. This
With limited information or demonstrative evidence that government is taking a balanced approach that considers business’ capabilities and environmental protection when developing legislation or the new Code…. they need to trust us in saying that we need more information to be supportive. is especially important for smaller and more remote businesses that do not have the resource capacity to adjust to change that is rolled out in an expedited manner. Government needs to open their playbook on ‘How to Manage Change’. Leading organizations understand this well and ensure extensive communication occurs with stakeholders outside of their organizations. Leading organizations create plans and execute them well to maximize the success with which change is implemented. Here are few of the many things they do: 1. They understand that their stakeholders react differently to change given their resource
capacity levels; 2. They understand that stakeholders have fundamental needs that have to be met (i.e., frequent communication, detailed information, understanding of internal changes to the business that could affect them); 3. They are clear about what stakeholders can expect given what is realistically possible; 4. They address stakeholders’ fears to build a level of trust; and 5. They ensure that the resources and supporting systems that stakeholders require during and after changes are implemented are in place. There are many unanswered questions, yet the business community is expected to ‘trust’ government to find economic, efficient and effective solutions for environmental protection. With limited information or demonstrative evidence that government is taking a balanced approach that considers business’ capabilities and environmental protection when developing legislation or the new Code…. they need to ‘trust’ us in saying that we need more information to be supportive.
Interested in writing a Rant? Please contact Kristin McKee at
[email protected] volume 3/ quarter 1
17
December/ January
By the Numbers The economic horizon in early 2010 is clouded with two events. One difficulty is the trouble that Greece is having borrowing money. This is fueling fears that a second wave of defaults involving countries rather than banks will lead to a “double dip” recession. The second is closer to home. The federal and provincial governments will restrain spending in the upcoming budgets to reduce deficits, removing the economic stimulus they provided in 2009 and possibly choking off the recovery before it takes hold. However, these are only minor concerns in Saskatchewan. Commodity prices are rising again and consumer spending is increasing so the outlook for the economy is still positive. There are hopeful signs that the capital investment intentions for 2010 will show renewed business confidence. Population
According to preliminary estimates by Statistics Canada, the Saskatchewan population hit an all-time high of 1,035,000 on October 1st, 2009. In the first three quarters of 2009 there was an increase of: • +3,600 from natural growth (births less deaths); • +5,100 from international migration; and • +1,900 from interprovincial migration. In the third quarter of 2009, interprovincial migration to Saskatchewan slowed with the number of people moving to Saskatchewan down 14% from a year ago. Nevertheless the population is expected to continue to grow throughout 2010.
Employment and Earnings
With one exception, the labour market started 2010 in much the same way it ended 2009, that is moving sideways rather than either up or down. Employment in January 2010 was 520,000 which was effectively the same level as in September 2008. 18
The exception was an increase in full-time employment which is up 1.8% compared with January 2009. This is a reversal of the trend evident throughout 2009 and may indicate the long awaited increase in labour demand. The average hourly wage rate for paid workers in January 2010 was $22.37, 4.8% higher than a year ago.
Monthly Employment in Saskatchewan 535 530 525 520 515 510 505 500 495 490 485
Retail Sales
Retail sales during the Christmas rush used to be concentrated in December but November shopping and gift cards (which are measured when they are used rather than when they are bought) have dampened some of the seasonal peak. But this is still the most important month for many retailers and gross sales this year were a respectable 4% higher than a year ago. This continues a gradual upward trend in sales after the $100 million drop in the monthly average that occurred late in 2008. Sales in the fourth quarter of 2009 were up 0.4% compared with the
thousands (seasonally adjusted)
2008
2009
2010
Monthly Retail Sales in Saskatchewan $1,300 $1,250
$ millions (seasonally adjusted)
$1,200 $1,150 $1,100 $1,050
2008
2009
action!
fourth quarter of 2008. Employment in retail trade in January 2010 was 59,600, down 6.3% from a year ago.
Consumer Price Inflation
The inflation rate in Saskatchewan was 1.6% in January 2010 which is higher than it has been for nine months but below the national average. The inflation rate is higher in transportation (6.2%), personal care and health items (5.6%) and lower in groceries (0.3%) and the household operations category (1.1%). Prices have dropped from a year ago for clothing and in the shelter cost category. The inflation rate in Regina was 1.9% compared with 1.4% in Saskatoon.
International Merchandise Trade
The year-over-year changes in international trade will, from now on, be comparing figures that are after the sharp drop in December 2008 so the double digit declines that were normal throughout most of 2009 will end. Measured in Canadian dollars, the value of merchandise exports to other countries in December was up 3% compared with a year ago. The value of imports fell by 12% so the value of net trade (exports less imports) was up 11% from December 2008. The value of exports of agriculture products was down 11% compared with a year ago whereas the value of mineral product exports including oil and natural gas increased by 12%. The value of exports classified as manufactured goods increased by 3%.
Construction
Contractors working in the nonresidential side of the building construction industry were busier than those working on the residential side throughout most of 2009. That may volume 3/ quarter 1
be changing. Adjusted for normal seasonal variations, the value of residential building permits increased by 18% from the third quarter to the fourth quarter of 2009. The value of non-residential construction, on the other hand, increased by 7%.
Monthly Consumer Price Inflation in Saskatchewan 4%
3%
2%
The end of the renovation tax credit and tighter rules for mortgages will have a minor dampening effect on the residential market. Employment in construction in January 2010 was 37,200, up 6.3% from January 2009.
1% % change in prices from a year ago 0%
2008
2009
2010
Manufacturing Sales
The value of manufacturing sales has been effectively flat throughout 2009 with November sales 13% below sales a year ago. If present trends continue, shipments of manufactured goods this year will be near $10.9 billion compared with the record level of $12.3 billion in 2008. Some of the decline is price related (e.g. petroleum products and fertilizer) but some is the delayed effect of lower national and international demand for steel products. A recovery in 2010 is unlikely unless demand in the USA picks up considerably.
$300
Gross farm cash receipts were down by 4% for the first three quarters of 2009 compared with the same period a year ago. Crop receipts are near last year’s levels but receipts from the sale of livestock and livestock products are down 19%. Employment in agriculture in January 2010 was 39,200, up 0.3% from January 2009.
$ millions (seasonally adjusted)
$250
Residential
$200
NonResidential
$150 $100 $50 $0
2008
Employment in manufacturing in January 2010 was 27,200, down 14% from January 2009.
Agriculture
Monthly Value of Building Permits in Saskatchewan
2009
Monthly Manufacturing Sales in Saskatchewan $1,300 $1,200
$ millions (seasonally adjusted)
$1,100 $1,000 $900 $800 $700
2008
2009
19
2010 State of the
Province
Address
Wednesday, March 17th, 2010 12:00 p.m. TCU Place 35 22nd Street East Saskatoon, Saskatchewan
Proudly presented by
saskatchewan chamber of commerce The State of the Province Address by Premier Brad Wall is a new initiative from the Saskatchewan Chamber of Commerce. Saskatchewan is prospering: the Province is home to more people than ever before, export revenues are growing and our reputation nationally and internationally is strong. However, we are also facing challenges that need to be addressed. This inaugural State of the Province Address is an opportunity for Premier Wall to share the government’s agenda with stakeholders. The 2010/11 Provincial Budget will be released the week after this event and the Premier will be outlining some of the principles his government is adopting in this revolutionary budget. Don’t miss this important event.
Registration Register online at www.picatic.com/ticket/State_of_the_Province/
$100.00*
for members of the Saskatchewan Chamber of Commerce and members of the Greater Saskatoon Chamber of Commerce.
$125.00*
for future members
Membership has benefits.
* Prices are subject to applicable taxes and service fees.
Registrations for this event will only be accepted online. Tickets will not be available at the door, please register early to avoid disappointment.
