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Saskatchewan warned to watch for dark side of energy-fuelled economic boom
January 6, 2008 - 10:54 am
By: Jennifer Graham, THE CANADIAN PRESS
REGINA - By many accounts, it's a great time to be in Saskatchewan.
The booming oil and gas industry is fuelling a red-hot economy, Saskatchewan's uranium deposits are in high demand and the province is expected to lead the country in export growth this year.
The population is growing and has passed the one million mark for the first time in six years.
But experts warn that the upswing comes with a downside.
"One is that if the province is actually growing, rather than not shrinking, then there will be demands for infrastructure," said Gary Tompkins, an economics professor at the University of Regina. "Public transit, roads, sewers and all the rest of it are going to have to be built.
"There's already a pretty big infrastructure deficit in cities in Western Canada, including Regina and Saskatoon."
And it may only get worse. Tompkins points to Alberta as an example.
Calgary is plagued by traffic and transit troubles, and its growing population has strained hospitals and schools.
Then there's the pressure on housing.
Home prices in Saskatoon and Regina reached unprecedented levels last year. In Regina, they shot up 45 per cent from 2006 to more than $200,000. In Saskatoon, the average home price jumped to more than $250,000.
According to Royal LePage, Regina is one of two cities in Canada forecast to have the greatest increases in house prices in 2008.
That could mean trouble for people who have jobs that aren't linked to the boom, said Tompkins.
"The average wage in Saskatchewan went up something in the order of 3 1/2 per cent, while housing prices last year went up 40 per cent. That's not a sustainable relationship," he said.
"This is obviously putting pressure on low-income people, people on social assistance in terms of finding a reasonable place to live."
It's a pressure that has long been felt in Alberta.
In Fort McMurray, the centre of Alberta's oilsands industry, hundreds of temporary housing units have had to be established for workers drawn to the region. The market couldn't respond fast enough to build apartments.
"Alberta, to be fair, had a huge boom that they probably didn't anticipate the size of," said Tompkins.
Former Alberta premier Ralph Klein conceded as much in 2006. Accused of leading a government with no plan to deal with the boom, he said no one could have anticipated the phenomenal growth it would bring.
There is definitely something to be learned from what happened in Alberta, according to Colleen Rickard of the Canadian Parks and Wilderness Society.
"I think Alberta is a really good example of what we don't want to do," she said.
"Alberta is, well, to be blunt, it's an extremely damaged place."
The society maintains that Saskatchewan is not prepared to manage the environmental impacts that the resource-based economic boom is bringing, particularly in the north.
There are "next to no adequate land use plans," she said. The province needs to look at the cumulative environmental impact from building roads, cutting trees and exploring for minerals or oil and gas.
"It's really important, in the process of deciding the resources that we want to go after and how we're going to go after them, that we also identify areas that need to be set aside from industrial development," said Rickard.
"That kind of planning ... that's just simply not happening in Saskatchewan."
The task of planning falls to the new Saskatchewan Party government, which won power just two months ago.
"A great deal of investment is coming into the province," said Energy and Resources Minister Bill Boyd.
"Along with those investments come challenges - no question about it in terms of infrastructure. But we feel that those challenges are definitely offset by the economic activity that we are beginning to see."
While the province is looking for increased activity in the oil and gas sector and the mining sector, Boyd said he thinks everyone recognizes that it has to be done in an environmentally friendly way.
And he agreed that Saskatchewan will be looking west to avoid the mistakes.
"I think there are lessons to be learned from Alberta with the respect to the boom that they've had," said Boyd.
"Ours is nowhere near the magnitude that Alberta's is," he said.
"However, I think that we're going to be picking up a great deal of activity here in the next number of years so we have to be conscious of that and plan accordingly for increased housing development, increased water and sewer, roads, all of those kinds of things!
January 6, 2008 - 10:54 am
By: Jennifer Graham, THE CANADIAN PRESS
REGINA - By many accounts, it's a great time to be in Saskatchewan.
The booming oil and gas industry is fuelling a red-hot economy, Saskatchewan's uranium deposits are in high demand and the province is expected to lead the country in export growth this year.
The population is growing and has passed the one million mark for the first time in six years.
But experts warn that the upswing comes with a downside.
"One is that if the province is actually growing, rather than not shrinking, then there will be demands for infrastructure," said Gary Tompkins, an economics professor at the University of Regina. "Public transit, roads, sewers and all the rest of it are going to have to be built.
"There's already a pretty big infrastructure deficit in cities in Western Canada, including Regina and Saskatoon."
And it may only get worse. Tompkins points to Alberta as an example.
Calgary is plagued by traffic and transit troubles, and its growing population has strained hospitals and schools.
Then there's the pressure on housing.
Home prices in Saskatoon and Regina reached unprecedented levels last year. In Regina, they shot up 45 per cent from 2006 to more than $200,000. In Saskatoon, the average home price jumped to more than $250,000.
According to Royal LePage, Regina is one of two cities in Canada forecast to have the greatest increases in house prices in 2008.
That could mean trouble for people who have jobs that aren't linked to the boom, said Tompkins.
"The average wage in Saskatchewan went up something in the order of 3 1/2 per cent, while housing prices last year went up 40 per cent. That's not a sustainable relationship," he said.
"This is obviously putting pressure on low-income people, people on social assistance in terms of finding a reasonable place to live."
It's a pressure that has long been felt in Alberta.
In Fort McMurray, the centre of Alberta's oilsands industry, hundreds of temporary housing units have had to be established for workers drawn to the region. The market couldn't respond fast enough to build apartments.
"Alberta, to be fair, had a huge boom that they probably didn't anticipate the size of," said Tompkins.
Former Alberta premier Ralph Klein conceded as much in 2006. Accused of leading a government with no plan to deal with the boom, he said no one could have anticipated the phenomenal growth it would bring.
There is definitely something to be learned from what happened in Alberta, according to Colleen Rickard of the Canadian Parks and Wilderness Society.
"I think Alberta is a really good example of what we don't want to do," she said.
"Alberta is, well, to be blunt, it's an extremely damaged place."
The society maintains that Saskatchewan is not prepared to manage the environmental impacts that the resource-based economic boom is bringing, particularly in the north.
There are "next to no adequate land use plans," she said. The province needs to look at the cumulative environmental impact from building roads, cutting trees and exploring for minerals or oil and gas.
"It's really important, in the process of deciding the resources that we want to go after and how we're going to go after them, that we also identify areas that need to be set aside from industrial development," said Rickard.
"That kind of planning ... that's just simply not happening in Saskatchewan."
The task of planning falls to the new Saskatchewan Party government, which won power just two months ago.
"A great deal of investment is coming into the province," said Energy and Resources Minister Bill Boyd.
"Along with those investments come challenges - no question about it in terms of infrastructure. But we feel that those challenges are definitely offset by the economic activity that we are beginning to see."
While the province is looking for increased activity in the oil and gas sector and the mining sector, Boyd said he thinks everyone recognizes that it has to be done in an environmentally friendly way.
And he agreed that Saskatchewan will be looking west to avoid the mistakes.
"I think there are lessons to be learned from Alberta with the respect to the boom that they've had," said Boyd.
"Ours is nowhere near the magnitude that Alberta's is," he said.
"However, I think that we're going to be picking up a great deal of activity here in the next number of years so we have to be conscious of that and plan accordingly for increased housing development, increased water and sewer, roads, all of those kinds of things!