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Saskatchewan offers a robust, resource-based economy that is focused on the following key sectors: oil, natural gas, uranium and potash. In fact, oil and natural gas exports began to outpace exports of grain and oilseed in 2000, indicative of the province’s strategic shift from an agricultural based economy to a resource based economy.
Oil & Natural Gas Sector
As the second largest oil producing province in Canada (behind Alberta), Saskatchewan produced about 423,000 barrels of crude oil per day in 2004, or 17 percent of Canada’s total oil production. As well, the province’s only oil refinery is considering a $1 billion refinery expansion project that would see daily output increase by 30 percent, with a decision slated for the end of the year. Furthermore, the oil and natural gas sector contributes more revenue to the provincial treasury than any other industry, with the following 2004 economic impact:
- Total capital spending by the oil and gas industry reached $2 billion
- Direct and indirect employment resulted in 24,000 jobs
- Revenues accounted for eight percent of Saskatchewan’s GDP
The province’s central location, coupled with an accessible pipeline infrastructure allow for the transportation of crude oil and natural gas to markets in Eastern Canada and the United States.
Uranium Sector
The increased focus on nuclear power as an alternative energy source, together with strong provincial uranium production creates a bright outlook for this industry. Saskatchewan is the world’s largest producer of uranium; accounting for 30 percent of the annual world uranium production, as well as being home to a significant portion of the world’s known uranium resources. This includes high grade ore that is produced at a lower cost compared to many other parts of the world. With key mills being upgraded in response to demand, Saskatchewan is in an enviable position at the forefront of global uranium production.
Potash Sector
The province also has the world’s largest potash deposits, accounting for 22 percent of world capacity and the majority of the world’s excess potash; and PotashCorp recently completed a $575 million expansion. This industry is characterized by low cost operations and high quality potash production, meeting demand in North American and global markets. Applications for potash include high-quality fertilizer, animal feed supplements and industrial uses for items such as TV screens, soaps and de-icers.
Additionally, the province of Saskatchewan benefits from the wealth of advantages enjoyed by the four western provinces – British Columbia, Alberta, Saskatchewan and Manitoba:
- Easy access to markets and suppliers
- Competitive business costs
- Availability of natural resources and innovative technologies
- Excellent infrastructure
- Quality workforce
Western Canada is also considered a developing centre of advanced technology, with Saskatchewan focusing on satellite-based communication systems, products and services. And the lifting of cattle export bans to the United States and Japan should see a positive, albeit slow impact on the province’s economy.
February 2007 saw employment surge for the 11th consecutive month with the number of people employed increasing by 20,600 over February 2006. Job increases occurred in the following areas:
- Retail and wholesale industries
- Construction
- Service industries
- Education
- Healthcare
- Oil and natural gas
- Mining
Population trends remain a challenge for the province, yet the fundamental strength and momentum of its economy should offset these trends as the cost of living in provinces like Alberta drive residents to consider the more affordable housing market offered by Saskatchewan. And if the rate at which Real Estate Investment Trusts are sweeping into the province is any indication of the current and future strength of its economy, Saskatchewan should remain an excellent source of real estate investment opportunities.
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