By Dr. PETER PHILLIPS (PhD), Distinguished Professor, Johnson Shoyama Graduate School of Public Policy, University of Saskatchewan
Peter WB Phillips |   peter.phillips@usask.ca

Canute Rosaasen, MPP candidate, Johnson Shoyama Graduate School of Public Policy, University of Saskatchewan
 car987@mail.usask.ca 

Trade is central to Saskatchewan’s economic future. Given that all the parties vying for office in this election wanted to change the structure and performance of the economy, aspects of our trading relationships were relevant but, unlike in past elections where disputes about our preferred trading relationships dominated, little of the formal debate in the media or in campaign material dwelt on the merits of the policy options. The one exception was minor skirmishes between the parties about how much Saskatchewan procurement or construction should be open to out-of-province firms and workers.

Saskatchewan is more trade dependent than all other provinces. In the last five years (2014–18), the province exported on average $51B of goods and services, or about 64 per cent of GDP.^[1] Approximately two-thirds of our sales go to the rest of the world and one-third to other provinces. The lion’s share of our international revenue comes from oil, potash, and crop exports, about half from the U.S. and much of the rest from Asia. On average, Saskatchewan posts international trade surpluses of $12.4B annually. In spite of strong exports in recent years, a range of trade disputes in Asia, with the U.S., and in Europe currently depress some markets.^[2]

From a policy perspective, Saskatchewan is bound by an alphabet soup of trade agreements, including the World Trade Organization (WTO) Agreement, the recently revised Canada, U.S., Mexico Agreement (CUSMA, which replaced NAFTA), the Comprehensive Economic and Trade Agreement (CETA, between Canada and the EU), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and myriad of specific international institutions that govern quality, safety, and functioning of the key markets with which we engage. As a trade-dependent province, Saskatchewan relies heavily on the international trade architecture, but few of the institutions are within the power of the province to do much about it.

Domestically, the province is a principal in two key trade interprovincial agreements: the Canadian Free Trade Agreement (CFTA, 2017) and the New West Partnership Trade Agreement (NWPTA) between the four western provinces. Both work to open up market opportunities in other provinces while at the same time allowing firms from elsewhere into the province to conduct business and to bid on and deliver key construction and industrial services and procurement.

The provincial economy was suffering as the election was called. The combination of low commodity prices and a delayed harvest in 2019 took the wind out of the provincial economy at the end of the year. The furloughs and shutdowns in response to the COVID-19 pandemic earlier this year knocked the economy down, with employment dropping sharply and incomes impaired. Polling in September 2020 revealed that 35 per cent of residents thought the economy was continuing to fall, 34 per cent saw continuing stagnation, and only 27 per cent could see any prospects for improvement.^[3]

Given that international markets are next to impossible to change from Saskatchewan, there was more interest in domestic opportunities. Apart from the Sask Party—which signed onto both domestic agreements during its time in office and remains committed to its purpose—all the other parties have had long-standing concerns about the loss of local markets for local firms and the limits those agreements put on provincial policies and programs. The logic for many is that, as recovery takes hold, reserving those contracts and jobs for locals would generate a more robust circular economy in the province.  

More generally, the economic goals of the different parties revealed that each sees a somewhat different role for exports and trade agreements.

The Saskatchewan Party ran on its previously announced Growth Plan 2020/30.^[4] The growth plan focused on bolstering export-driven recovery as a way to deliver 100,000 more jobs by 2030. This involves increasing the value of exports to the rest of Canada and abroad each by 50 per cent, with much of the growth coming from expanding the number of $1B-markets. This would require sharp rises in agri-food, potash, uranium, forestry and manufacturing exports, and a bump in the relatively small tourism industry. Getting to these targets requires higher private capital investment (up to $16B annually), much of it to increase processing and value added to primary products, combined with about $30B of new infrastructure, much of it for transportation networks to get goods to market. This policy fundamentally requires aggressive trade liberalization to open up these markets.

The New Democratic Party laid out its ideas in its People-First Recovery economic plan in June of 2020.^[5] While the majority of this plan was concerned with economic recovery from COVID-19, it focused less on the big-firm growth opportunities and targeted bolstering entrepreneurship, supporting innovation, promoting product, and accessing capital both within the province and globally. Part of this plan was to enhance access to diverse markets by strengthening the Saskatchewan Trade and Export Partnership, a provincial public-private partnership that assists firms and sectors in exporting to existing markets and tapping into new markets.

The other parties had less to say about trade but leaned towards limiting external controls on domestic policies. The Buffalo Party asserted that if elected they would push for provincial control of all trade and markets and would pursue a Saskatchewan-first procurement and construction policy.^[6] The Green Party, committed to managing the phase-out of fossil fuel and creating a low-carbon economy, proposed a mix of local projects and initiatives, many of which could abrogate some of the measures in our domestic and international trade agreements.^[7] The Progressive Conservative Party promised to scrap the New West Trade Partnership and similarly pursue a buy-local policy.^[8] The Liberals were silent on what they would do with our trade or markets, except to promote community infrastructure and green solutions through some form of local venture bonds.^[9]

While trade, and the rules that govern our trading prospects, are core to the economic future of the province, the trade agenda seldom captures much attention in provincial campaigns, for the simple reason that most of the levers of control are outside the control of the province. This campaign was no exception.

References

[1] Statistics Canada. 2020. Gross domestic product, expenditure-based, provincial and territorial, annual, Table: 36-10-0222-01.                                                                            

[2] Saskatchewan Trade and Export Partnership. 2020. Saskatchewan State of Trade 2020 Report. Regina. https://www.sasktrade.com/public/uploads/State%20of%20Trade/MI%20-%20State%20of%20Trade%202020.pdf

[3] Tank, Phil. 2020. “Most Saskatchewan voters remain undecided for election, poll suggests.” Saskatoon Star Phoenix. https://thestarphoenix.com/news/local-news/most-saskatchewan-voters-remain-undecided-for-election-poll-suggests

[4] Saskatchewan Government. 2019. Saskatchewan Growth Plan 2020-2030. Accessed 28-10-20 at: https://www.saskatchewan.ca/government/budget-planning-and-reporting/plan-for-growth.

[5] New Democrats of Saskatchewan. 2020. People First. Accessed 27-10-20 at: https://www.saskndp.ca/platform?utm_campaign=38_eml_momentumplatf&utm_medium=email&utm_source=saskndp

[6] Buffalo Party of Saskatchewan. 2020. 2020 Platform: A fair deal for Saskatchewan. Accessed 27-10-20 at: https://d3n8a8pro7vhmx.cloudfront.net/wexitsask/pages/22/attachments/original/1601855795/buffalo_party_platform.pdf?1601855795

[7] Saskatchewan Green Party. 2020. 2020 Election: Climate Action. Accessed 27-10-20 at: https://saskgreen.ca/climate-action/.

[8] Progressive Conservative Party of Saskatchewan. 2020. Making Saskatchewan our priority. Accessed 27-10-20 at: https://campaign.gmdpages.com/pc-party-of-saskatchewan/

[9] Saskatchewan Liberals. 2020. Our Ideas. Accessed 27-10-20 at: https://saskliberals.ca/plan/

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