Saskatchewan's growth requires billions in new investment capital
10 Jun, 2013, 12:30 ET
Province will need open door approach
OTTAWA, June 10, 2013 /CNW/ - Saskatchewan will need to attract an unprecedented $20 billion to $30 billion in capital investment annually through 2032 to finance its rapid economic and infrastructure growth. How the province adapts to this new resource-economy reality will determine how well the investment dollars flow, according to a Conference Board of Canada report for The Saskatchewan Institute.
"Saskatchewan is in the midst of diversifying its traditionally agriculture-dominated economy. New mega-projects in the resource sectors will require different forms of capital investment," said Michael Grant, author of the report, Green Machine: Financing Growth in the New Saskatchewan.
"This massive influx of capital is something new for the province. It will require policy actions and responses on a wide range of issues. The good news is that is its strong economic prospects give the province the luxury to deal with these issues in a thoughtful way and on its own terms."
The Conference Board estimates that Saskatchewan's capital needs will continue to expand until at least 2032, due largely to global demand for resources such as oil, potash, uranium, natural gas and other metals and minerals. The long-term outlook for capital reflects three factors:
- Export-oriented extractive industries (such as mining and oil and gas);
- Export-oriented agriculture; and
- Population growth.
There are reasons for optimism that these capital needs can be met. First, Canada has one of the best-developed equity markets in the world and an expertise in funding resource development. Second, Saskatchewan will not have any problem funding resource projects as long as it is open to foreign investors, including state-owned enterprises.
The economic potential brought on by capital investment in the resource sector will require Saskatchewan to address several issues, such as:
- Maintaining a hospitable investment climate,
- Setting competitive personal and corporate tax rates;
- Keeping up with infrastructure demand;
- Diversifying the economy to reduce fluctuations in resource prices, supply and global demand; and
- Engaging First Nation and Métis businesses and communities in the economy.
The Saskatchewan Institute, a multi-year initiative of The Conference Board of Canada that focuses exclusively on issues relevant to Saskatchewan. The publication is available at www.e-library.ca.
View video commentary about The Saskatchewan Institute.
SOURCE: Conference Board of Canada
For further information:
Brent Dowdall, Media Relations, Tel.: 613- 526-3090 ext. 448
E-mail: [email protected]
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