Sask. outlook remains positive despite recession concerns: economist

The economy slipped into a technical recession earlier this month for the first time since 2020, but local economists say the term isn't the best measurement.

The Canadian economy slipped into a technical recession earlier this month for the first time since 2020, but local economists say the term isn’t the best measure of health, adding the future in Saskatchewan looks positive.

“We have to be careful to kind of jump to conclusions based on one or two months of bad outcomes,” explained Marc-André Pigeon, an assistant professor in the Johnson Shoyama Graduate School of Public Policy at the University of Saskatchewan.

“The broad trend in this province is, I would say, still pretty favorable, mostly because we have a lot of very big investment projects still happening.”

Pigeon says the term “technical recession” isn’t something economists put a lot of weight on. He says it’s become part of the discourse but doesn’t provide an accurate picture of the overall economy.

He adds Saskatchewan’s political leaders going on multiple trade missions helps improve relationships, and in turn can help impact trade deals — but the billions of dollars of private investment being poured into Saskatchewan in the mining sector is limiting Saskatchewan’s economic risk.

Denison and NexGen received federal approval to proceed with their uranium mines earlier this year, while Foran Mining’s copper-zinc mine and BHP’s Jansen potash mine are inching closer to production.

“I think on balance, Saskatchewan’s in a good place now,” Pigeon said.

On top of that added diversification, the agriculture sector — the historical backbone of Saskatchewan’s economy — is rebounding this year after China eased off its canola tariffs in March.

“We’re very fortunate to have a lot of strong natural resources here, from mining to critical minerals, to agriculture and different crops,” Erin Lawson, CEO of the Saskatoon Regional Economic Development Authority, said.

“And that allows our economy to weather storms better than some places in Canada.”

Saskatchewan’s recent performance has tempered expectations. Statistics Canada’s Labour Force Survey released June 5 shows Saskatchewan has lost jobs, while other provinces have made gains.

Saskatchewan lost approximately 6,100 jobs in May. That helped push the unemployment rate up 0.6 per cent, now sitting at 6.2 per cent.

“For Saskatchewan, 6,000 jobs is not nothing,” Pigeon said. “That’s a bit of a red flag.”

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Lawson said she’s constantly looking at figures like the Labour Force Survey, but she’s more concerned about long term impact, and one month of declining employment isn’t concerning her just yet.

“We don’t have as many ups and downs as other parts of the nation,” she said.

As billions of dollars are spent in the coming years to get more mining production online in the north, Lawson believes that will have a direct impact on the Saskatoon region.

“We’ll start to see more rapid growth in the next number of years as our population increases. Some of these major investments, whether civic or provincial, I think all of that will be a good story for our location.”