(19 April 2018)
Saskatchewan On Track for Increase in Trade & Jobs
Over the past decade of growth, Saskatchewan’s expanded exports and new business investments here at home have given our province the second-fastest rate of job creation and one of the lowest unemployment rates in the country. The 2018-19 Saskatchewan Budget will help to ensure Saskatchewan’s economy stays on track as we begin another decade of growth.
The 2018-19 Budget keeps Saskatchewan’s economy on track by creating opportunities for increased trade, business investment and job creation.
Saskatchewan has the highest goods exported per capita of all Canadian provinces and Saskatchewan’s total exports have grown by 50% over the past decade. The Saskatchewan Trade and Export Partnership (STEP) is responsible for increasing our exports to existing markets and expanding into new markets by initiating sales, contracts and projects for Saskatchewan exporters.
An additional $250,000 is being allocated to STEP and will be targeted to programs that directly support exporters’ efforts to increase activity in both new and existing markets. This will create new jobs and further expand access to export markets around the world.
New business incentives in the 2018-19 Budget include the Saskatchewan Value-Added Agriculture Incentive under the Ministry of Trade and Export Development, and the Saskatchewan Tech Start-up Incentive under Innovation Saskatchewan.
The Saskatchewan Value-Added Agriculture Incentive creates a 15% non-refundable and non-transferable tax credit for new or existing value-added agriculture facilities that make a minimum capital investment of $10 million to expand productive capacity. This fosters a competitive business environment and improves investment attraction and retention outcomes.
The Saskatchewan Technology Start-up Incentive is a two-year pilot program that will offer a 45% non-refundable tax credit for individual and corporate equity investments in eligible technology start-up businesses capped at a maximum annual benefit of $140,000 per investor.
This year’s budget also helps to ensure that our energy and resource sectors continue to lead the way by enhancing our oil and gas regulatory programs, and by introducing a new Mineral Development Strategy that will encourage more exploration and help protect jobs.
The Fraser Institute has ranked Saskatchewan second out of 91 jurisdictions in the world for mining investment attractiveness. Preliminary estimates indicate that the value of Saskatchewan’s mineral sales for 2017 was about $6.5 billion, up slightly from the year before, and the province remains a global leader in uranium and potash production.
Canadian Energy Sector Under Serious Threat
Oil and gas is responsible for an estimated 15% of Saskatchewan’s gross domestic product, and recent numbers—such as increased production, exploration, and revenue—have shown clear signs of renewed activity and growth in the industry. Saskatchewan is the second-largest producer among Canada’s provinces, accounting for an estimated 12% of the nation’s crude oil production.
The world needs our energy but our province has serious concerns that destructive policies and a lack of action from the federal government are doing more harm than good, making Canada an unattractive place for investment.
Investors like Kinder Morgan are publicly stating their intention to pull the plug on their investments in Canada if things don't change. The federal government has yet to provide any detailed solutions or specific actions to ensure that construction goes ahead.
Internationally, the energy sector faces serious threats. We are competing most directly with producers south of the border, where major tax reform has just taken place, and is expected to only fuel the growth of U.S. shale oil. And just recently, the Kingdom of Bahrain announced a discovery of 80 billion barrels of oil (as much as Russia's entire reserve) and 10-20 trillion cubic feet of gas.
Domestically, a looming $50/tonne carbon tax, landlocked discounted oil precipitated by two pipeline projects that were shut down and two more that can't get built, and recently introduced Bill C-69, under which the Canadian Energy Pipeline Association says "another pipeline project will never be built in Canada" have given investors reason to second guess our country.
We have the Premier of British Columbia, Canada's only province with access to a pacific port, signaling intent to not only shut down the much-needed twinning of the existing Trans Mountain pipeline, but now also threatening to block oil on rail. And all this, long after the pipeline was approved for construction by the federal government, as is its purview.
Canadians deserve better from our national government.
The energy sector provides hundreds of thousands of jobs, billions in royalties and taxes that fund important public services, and major infrastructure like highways, schools, and hospitals. Canadians depend on this sector's success. We need the federal government to step up now to ensure investment is welcomed and encouraged in our country now, and for years to come. Thousands of Canadian jobs and billions in additional economic activity hang in the balance.
We have announced that Saskatchewan will join Alberta in introducing legislation to “turn off the taps” to British Columbia in order to put pressure on the NDP government there to get this pipeline built. The NDP here in Saskatchewan however said that we should back away and wave the white flag. We won’t back down. We will do what we can to protect the future of our energy economy and the people of our province, and that means ensuring that this pipeline gets built as soon as possible.
If you have a question about this Legislative Report or any other matter, just Contact Jim.
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