Will Saskatchewan Fall into Recession?

Will Saskatchewan experience a recession because of falling oil prices?

The Conference Board of Canada predicts this drop will cause Alberta to slip into a recession by the end of the year. Jeff Rubin, the author of “The End of Growth” and former chief economist of CIBC World Markets believes the dip in the sector could affect Saskatchewan as well, though not as seriously.

“I don’t expect Saskatchewan or Newfoundland to be as adversely affected as Alberta,” Rubin said.

“But it’s going to impact the economy, it’s going to impact tax revenues. Governments are going to be challenged in the sense that if they don’t challenge spending, they’ll see their deficits go off side.”

It could also affect property prices.

The Conference Board of Canada predicts that Alberta will slip into a recession before the end of the year. Rubin echoes that warning. He said Alberta could experience its worst recession since the late 1980s.

At the end of the day, Saskatchewan will be okay because we have what the world needs.  It may not be as great as it was in 2009 but we will be okay.  That being said, we are so reliant on commodity prices that these kind of dips are going to impact us forever with no way out.  In that way the new Saskatchewan under Brad Wall isn’t a lot different than the old Saskatchewan under Grant Devine or Roy Romanow.  Like the rest of the world, the global economy will always have a big impact on us for good or for bad.

Cam Broten has said before that he wants more eggs in more baskets.  I think we all do in Saskatchewan but man is it hard to do.  I posted before about Alberta’s struggles in diversifying their economy and the same thing has happened here.  I agree with diversification but we are a province of a million people and there are going to be times that the world economy conspires against us and makes it really hard.  This is one of those times.

What is Obama’s Legacy?

New York Magazine asked 53 historians what Barack Obama’s legacy will be

Almost every respondent wrote that the fact of his being the first black president will loom large in the historical narrative — though they disagreed in interesting ways. Many predict that what will last is the symbolism of a nonwhite First Family; others, the antagonism Obama’s blackness provoked; still others, the way his racial self-consciousness constrained him. A few suggested that we will care a great deal less about his race generations from now — just as John F. Kennedy’s Catholicism hardly matters to current students of history. Across the board, Obamacare was recognized as a historic triumph (though one historian predicted that, with its market exchanges, it may in retrospect be seen as illiberal and mark the beginning of the privatization of public health care). A surprising number of respondents argued that his rescue of the economy will be judged more significant than is presently acknowledged, however lackluster the recovery has felt. There was more attention paid to China than isis (Obama’s foreign policy received the most divergent assessments), and considerable credit was given to the absence of a major war or terrorist attack, along with a more negative assessment of its price — the expansion of the security state, drones and all. 

Alberta has already tried to diversify it’s economy. It failed

From the Calgary Herald

As for policy, the Alberta government tried to diversify the Alberta economy in a deliberate fashion back in the 1980s and early 1990s.

Starting under then Premier Peter Lougheed and also under his successor, Don Getty, the provincial government provided loans, loan guarantees and equity stakes to companies in the non-energy sector.

In one example, the provincial government backed “made in Alberta” banks, trust companies and investment firms. After the early 1980s recession and then a mid-decade collapse in oil prices (to $10.25 a barrel in April 1986, down from $26 in December 1985), Alberta’s real estate values also plummeted. That took down many of those same provincially guaranteed financial institutions, themselves heavily invested in real estate.

The price tag to the provincial government for that diversification effort was $1.8 billion, for everything from failed loan guarantees to partially covered consumer and investor deposits.
In another diversification attempt, the province also loaned, guaranteed and took equity partnerships in everything from a forestry company to a meat packing plant, a provincial bitumen upgrader, a waste treatment plant and a high-tech company. By the early 1990s, defaults and foregone capital investments from all of the above cost the province $2.2 billion — in addition to the $1.8-billion financial sector collapse.

These efforts didn’t help Albertans adjust to a new reality or diversify the economy. It was simply activist industrial policy, where governments pick winners and losers. The latter cropped up more regularly than the former.

Introducing the 33rd Street Business Improvement District

Some really good news for Mayfair and Caswell.  From the City of Saskatoon news release.

Saskatoon City Council has recently made possible the final step in creating Saskatoon’s newest Business Improvement District (BID), which includes both sides of 33rd Street from Alberta Avenue to Avenue G.

“We are tremendously excited about establishing a BID for 33rd Street.  The business owners in this area have worked very hard to achieve this goal, and it has now become a reality.  We couldn’t be more pleased with Council’s decision,” says Nicola Tabb, representing the 33rd Street BID Organizing Committee.

At its November 24, 2014 meeting, City Council approved Bylaw No. 9235 – The 33rd Street Business Improvement District Bylaw, 2014.  A BID is an area of commercial and industrial property owners and tenants who work in partnership to create a thriving and competitive business area.

Over the past two years, a group of dedicated business owners on 33rd Street have worked toward organizing a BID, which is made up of a variety of unique businesses such as restaurants, shops, services, and a major grocery store.  The business group saw the potential in forming a BID to improve and enhance the appeal and viability of the district now and into the future.

“The creation of a BID benefits not only the 33rd Street commercial district, but the city overall,” says Alan Wallace, Director of the City of Saskatoon Planning and Development Division.  “The success of other BIDs in Saskatoon has directly resulted in thriving, attractive areas where residents and visitors alike can come to work, shop, and play.  The 33rd Street BID will certainly create the same positive impact for their commercial area.”

The 33rd Street BID will begin operations in 2015.

Great job by the businesses that reside on 33rd Street.  If they can accomplish a fraction of what has been done by the Riversdale BID; Mayfair, Caswell, and of course some businesses in the area are going to benefit greatly.