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CTV News
a day ago
- Business
- CTV News
‘Creating more red tape': Sask. premier's New West invitation presents a challenge
WATCH: Saskatchewan's premier is calling on provincial leaders across the country to join the New West Partnership. WATCH: Saskatchewan's premier is calling on provincial leaders across the country to join the New West Partnership. A Saskatchewan economist says removing internal trade barriers may not be as straightforward as it seems as economies and agreements become more complex the farther they stretch. On Thursday, Premier Scott Moe invited provincial leaders across the country to join the New West Partnership, an interprovincial trade agreement that aims to streamline the movement of goods and workers. Keith Willoughby, the dean of Edwards School of Business at the University of Saskatchewan, says while New West provides a level of uncertainty in an increasingly uncertain economic time, its effectiveness could be limited with more provinces signing on. 'Weaving together a thread that will encompass the entire nation, that's a challenge,' Willoughby said. 'I think where we've seen it work well in Western Canada, it's not necessarily certain that this is going to have that same positive impact when you extend it across the nation.' Willoughby says each province has its own interests and own industries that drive each respective economy. Targeting each priority might undermine another facet of the agreement. By working to coordinate regulations and standards across British Columbia, Alberta, Saskatchewan and Manitoba, the New West Partnership has aimed to open up trade between the western provinces and potentially unlock billions in financial gains. The partnership was first established in 2010, with Manitoba signing on in 2017. Moe says his goal is to see all provinces sign on to the agreement, but he understands it won't fix all economic issues. 'It doesn't solve everything,' Moe said Thursday. 'But it's the clearest and most straightforward path towards not only free and fair trade.' However, the Canadian Federation of Independent Business isn't so sure. If the New West is so comprehensive, then what happens to the Canadian Free Trade Agreement (CFTA)? 'One thing we'd be wary of is sort of creating this patchwork of legislation,' Brianna Solberg, the organization's director of the prairies and northern Canada said. 'We're all for moving closer to a truly free trade within Canada. But we're just cautious of having this patchwork of different agreements that are now existing at the same time and just creating more red tape.' Solberg supports however provinces get to that end of goal of increased free trade, but she also understands exemptions and various agreements exist for a reason. Ontario eliminated all of its exemptions to CFTA recently, but she's not sure others will follow suite. With much progress made in recent months towards added free trade within Canada, memorandums of understanding and signatures only go so far. 'Provinces are being a bit protectionist,' Solberg said. 'They're trying to protect their tax base and their labor pool. 'We need to see actions that actually prove that we're serious about breaking down those barriers. ' Willoughby said recent reports from the Canadian Chamber of Commerce and the McDonald Laurier Institute have estimated that the impact of reducing trade barriers would be a roughly four to five per cent boost to the Canadian gross domestic product (GDP)., but it's tough to quantify because no one knows what an economy void of longstanding agreements would look like. One thing is for certain, according to Willoughby. With tariff threats and other political and economic uncertainty coming from the United States — Canada's largest trading partner — there needs to be added emphasis on international trade as well. Willoughby says interprovincial trade is like a home builder looking to replace shingles on a damaged roof, while international trade is looking to build a new house somewhere else. 'We almost need to do both of those if we're going to thrive,' Willoughby said. Data from the federal government shows interprovincial trade accounted for roughly $532 billion in 2023 -- representing a little over 18 per cent of overall GDP. Willoughby says four decades ago it accounted for about 26 per cent. 'International trade is growing, interprovincial trade is dropping,' he said. -With files from Rory MacLean and David Prisciak.
Yahoo
03-07-2025
- Business
- Yahoo
With an eye to Saskatchewan's growing debt, expert sees 'stormy weather ahead'
That the Saskatchewan government posted yet another deficit is of no surprise to economics professor Keith Willoughby, but he says a critical eye reveals some trouble brewing on the horizon. On Monday, the government published its 2024-25 Public Accounts Volume 1, which details the province's finances and indicated a $249-million deficit, down from the $273 million-deficit projected in March. Willoughby, Dean of the Edwards School of Business at the University of Saskatchewan, had three major take-aways after reading it: the deficit is to be expected, the province is doing well compared to other jurisdictions but the increasing net debt per capita and net debt to the province's growth domestic product (GDP) needs to be addressed. 'I believe that there is some stormy weather ahead to which the province needs to pay special attention,' he said in an interview Wednesday. Net debt per capita is effectively a figure reached by taking the net debt carried by the province then dividing it by every single resident of the province. According the government's public accounts, each citizen is carrying a provincial debt burden of $12,500. 'If you look back a decade ago, it was about $7,000 per man, woman and child in the province,' said Willoughby. 'That speaks to some challenges that the province will need to address as we go forward.' Net debt per capita peaked in 2022 at $13,100 per citizen but the statistic is now trending up again. Coupled with a year-over-year uptick in net debt to the province's GDP coming in at 13.7 per cent, he said there are some headwinds being faced. Saskatchewan is still in a relatively good position compared to other provinces, with Manitoba's net debt to GDP forecast at 36.1 per cent in 2024 and Alberta's forecast at 7.6 per cent. 'How large do you want the debt to grow? Because if it gets unsustainable, in terms of the GDP or the people in the province, that puts the burden back on the taxpayers and citizens of this province,' he said. In an emailed statement, the government touted its position as the province with the second-lowest net debt to GDP in Canada. 'The Government of Saskatchewan continues to make investments that deliver on what the people of Saskatchewan have said is important to them – affordability, health care, education, community safety and fiscal responsibility,' read the statement. But not all debt is made equal. Spending on infrastructure, health care, education, etc. are touched on in the accounts document but for Willoughby, citizens should take stock of how the government's spending is impacting them in their day-to-day lives. 'Are we getting access to better services? Are our health-care wait times dropping? Are the roads improved? Are we seeing access to better services in terms of teacher contracts?' he said. When the province released its 2025-26 budget in March, a slim surplus of $12.2 was forecast. Oil trading well below projections, wildfire expenses, suspensions of the provincial output based carbon pricing regime and increased drought pressure throughout the province are all making the likelihood of that surplus low, argued NDP finance critic Trent Wotherspoon. According to the province, total revenues in 2024-25 were $20.9 billion, up $994 million from targets, in part due to $400 million from a national tobacco settlement. At the same time, expenses came in at $21.1 billion. Wotherspoon said without the settlement the deficit would have been $600 million, adding the province 'squandered' the settlement. 'They overspent by a billion dollars, they failed to balance the budget and failed to properly address the real, big challenges that Saskatchewan people face,' he said at a media availability Wednesday. Wotherspoon also took issue with the timing of the release of public accounts, which happened the day before the Canada Day holiday. He likened it to the recent release of Crown earnings reports. Historically, they are released in a staggered manner over the course of an entire week with opportunities for technical briefings and interviews with media at the legislative building. This year, all the reports were simultaneously on June 23 in Saskatoon. 'They don't like accountability, they don't like scrutiny,' said Wotherspoon. Scott Moe pauses Saskatchewan carbon tax, promises balanced budget despite $431.5M revenue loss 2025-26 Sask. budget: Province forecasts $12.2M surplus, no contingency fund for Trump's U.S. tariffs alsalloum@ The Regina Leader-Post has created an Afternoon Headlines newsletter that can be delivered daily to your inbox so you are up to date with the most vital news of the day. Click here to subscribe. With some online platforms blocking access to the journalism upon which you depend, our website is your destination for up-to-the-minute news, so make sure to bookmark and sign up for our newsletters so we can keep you informed. Click here to subscribe.
CTV News
03-06-2025
- Business
- CTV News
What doubled U.S. steel tariffs could mean for Saskatchewan
Saskatchewan businesses share concerns about the future of the steel industry as the U.S. plans to raise tariffs to steel imports to 50 per cent. Saskatchewan is preparing for more trade uncertainty as the U.S. announces plans to raise tariffs on steel imports to 50 per cent. On Friday, U.S. President Donald Trump announced he would double the current rate for steel and aluminum imports – potentially increasing the costs for cars, tools, and machines. As a result, the Saskatchewan Mining Association said the future of the steel industry continues to be unclear. 'There's a certain level of uncertainty and unpredictability that has to be costed into projects,' said the association's president, Pam Schwann. With the current tariff rate sitting at 25 per cent, Schwann said companies have already felt the implications and continue to build 'potential increases in tariffs into their cost projections.' 'Everyone around the globe is facing a lot of uncertainty right now with the United States' trade practices,' she explained. 'We are looking at alternate sources as well that maybe aren't coming from the States to help improve our optionality.' Keith Willoughby, professor of management science and dean of the Edwards School of Business at the University of Saskatchewan, said the tariffs may very well lead to economic instability - if they're imposed for a long period of time. 'From a Saskatchewan side thus far, we've been fortunate because 45 per cent of our trade goes to countries not in the United States. We have been good in the past at diversifying our markets and exploring other situations,' he explained. 'The challenge though with steel and aluminum is it's a special case because as far as I understand it most of our trade, over 90 per cent, is going south of the border.' Willoughby said higher tariffs may also affect production costs on both sides of the border. 'Even though steel and aluminum is a fraction of our export equation, it still is a $400 million piece and because of a lot of it is going south of the border,' he said. 'I think that's where we could see some increased turbulence.' He added that a similar situation happened during Trump's first term, where steel and aluminum tariffs were 'reduced largely' after American auto manufactures raised concerns about paying higher prices for Canadian materials. With Trump's plan to impose the 50 per cent tariff rate on steel imports as soon as June 4, Willoughby recommends businesses on both of the border communicate with one another. 'It would be important for the American companies to be aware that if they don't have access to the lower price and better grade Canadian steel and aluminum, they would suffer in terms of their ability for production and fabrication of products,' he said. 'That's why it would be important for our economy, our government, and individuals to continue the conversation.'
CBC
12-05-2025
- Business
- CBC
Lower-than-anticipated oil prices put Sask.'s budgeted revenues at risk
Each $1 drop in oil prices costs Sask. $17.9 million Oil prices have been trending downward since the start of this year, from $80.04 US/ barrel in January to as low as $58.07 US/ barrel last week. That puts millions of dollars of Saskatchewan oil revenues in jeopardy. Saskatchewan projected its oil revenue in the province's March budget based on an average price of $71 US a barrel. Since then, oil prices have hit or surpassed that number only twice. Oil and natural gas revenue were budgeted to make up for 5.1 per cent of the total money coming in for the province. The budget says each $1 difference from that $71 mark costs the province $17.9 million dollars in oil revenue. As of Monday, this year's fiscal average was $62.23 US per barrel. As per the budget, that's more than $156 million less in estimated revenue coming into Saskatchewan. Keith Willoughby, dean of Edwards School of Business at the University of Saskatchewan, said these numbers could be early warning signs for the province. "This is an $18-million [per dollar] headache for the government of Saskatchewan," he said. "That's a considerable impact on the provincial budgetary landscape." It's only been a little over a month since the fiscal year began, and present estimates could change if prices increase or decrease over the year. Willoughby said it's a little early to toss the budget out completely, given that increased summer driving could potentially push the prices of gasoline and oil upwards. "If we were to maintain a $71-a-barrel price for oil, we'd have to have prices close to $80-a-barrel for the next several months. So to me it will be important to identify what happens over the next one to two months," Willoughby said. Joe Calnan, vice-president of energy and Calgary operations at the Canadian Global Affairs Institute, said a weaker-than-expected demand and a higher-than-expected production is causing the prices to drive down. "I'm trying to keep a handle on the whole thing, but, very interesting time to be watching the oil market," Calnan said. OPEC+, a group of major oil-exporting nations, has loosened supply constraints to bring more oil onto the market. Calnan said that move accelerated oil supply, while the trade dispute between US and China compounded the issue by lowering demand. "We're seeing quite a bit more oil coming on to the market far sooner than anticipated, and this hasn't come at the perfect time, as we are now seeing probably expectations of lower demand," he said. The average per-barrel price for the last fiscal year was $74.38 US. Willoughby said it would've been tricky for the province to have anticipated an accurate per-barrel price in tumultuous times where governments are left navigating tariffs, OPEC+ decisions and trade policies coming out of the White House. "It might have been challenging for the government to anticipate, maybe, the impact of the tariff turbulence and some of the softening of demand we're seeing. These situations are always better viewed in hindsight." Willoughby said it might be important for the government to send out communication to Saskatchewan residents about revised estimates and how they'll impact people. The province's projected a razor-thin surplus of $12.1 million, but it didn't factor in any fallout from American or Chinese tariffs, including a 100 per cent tariff on canola imports. Saskatchewan's approach was a departure from budgets in Alberta and B.C., which each featured dedicated contingency funds of $4 billion. Instead, the province banked on a strong financial outlook and "responsible" spending to weather the impacts of tariffs. Willoughby said the decision to not have a contingency could prove detrimental. "We went into the situation with no backup goalie. There was no safety net, there was no limited contingency plan. So it's sort of, like, now our first string goalie got injured and so now we are dealing with some of the repercussions." Saskatchewan's Ministry of Finance, in an emailed response, said the provincial budget oil price forecast is established using "a multitude of expert private sector oil price forecasts at the time the budget is finalized, typically around mid-February." "As we are just over a month into the fiscal year, it is too early to know what the impact of the change in oil prices is going to be. It is common for the oil price to fluctuate up and down over the course of a year," the ministry said.
CBC
19-02-2025
- Business
- CBC
'A trillion-dollar tsunami': Canadians grapple with unprecedented wealth transfer
Canada is in the midst of an unprecedented transfer of wealth that experts say could have significant social and economic implications for the country. The Chartered Professional Accountants of Canada said in 2023 that $1 trillion of wealth was expected to move between Canadian baby boomers and their millennial and Generation X children from 2023 to 2026. Much of that money is the result of real estate wealth, as many baby boomers have benefited from sharply rising home prices and other investments. Keith Willoughby, who runs the Edwards School of Business at the University of Saskatchewan, said this wealth transfer could have a widespread impact on the broader economy and society. "We're talking about a trillion-dollar tsunami that is about to hit this nation, which is unparalleled in our history," he said. The situation is especially visible in cities like Toronto and Vancouver, where home values have risen the most, but Willoughby said Saskatchewan is also experiencing this phenomenon. Willoughby said that money will pile back into the housing market as those children buy houses with those gifted funds, or have their parents directly contribute to down payments. In light of Canada's housing shortage, that influx of money is likely putting upward demand pressure on the housing market. "Assuming there's no increase in the supply of homes, the supply of cottages, the supply of vehicles and the like, you're actually going to increase the equilibrium price," Willoughby said. According to CIBC, 31 per cent of first-time homebuyers in Canada in 2024 received financial help from family members to buy a home. That was up from 20 per cent in 2015. CIBC also reports that the average value of monetary gifts has risen dramatically, to $115,000 in 2024 from $66,000 in 2019. These transfers are expanding wealth divides that go back decades. A 2023 study by Statistics Canada found that among people born in the 1990s, those whose parents were homeowners were twice as likely to be homeowners themselves compared to those whose parents did not own homes. "I think it creates a disturbance within society, because I think we're almost hardwired in our DNA to link cause and effect. That 'If I do X, I should get Y,'" Willoughby said. "You could be wealthy or wealthier by working in a productive profession, or you could be wealthy or wealthier by simply being the luck of the draw." Macleans writer Katrina Onstad describes our growing sense of mismatch between someone's lifestyle and their perceived income as "status fog," where invisible wealth alters a person's place in society relative to their perceived income, and distorts our perception of a middle-class lifestyle. Ballooning farm values In Saskatchewan, the steady increase in land values has placed family farms at the centre of this phenomenon. According to Statistics Canada, the average value per acre of farmland and buildings in Saskatchewan has nearly doubled since 2016. Donovan Tofin, a wealth management advisor for farmers based in Saskatoon, said the average value of a farm in the province is now likely more than $3 million. Tofin said that's creating tension in some farm families, as owners debate whether to sell the farm or pass it on to their children. "Looking back at my career in the '80s and '90s, sitting around the table with the family it was basically, well, which one of you poor souls got to stay in farming?" he said. "Today it's the opposite, where the kids know there's a lot of wealth. They're not sure what the number is, but they know there's significant wealth there." An unequal distribution Not all young Canadians will be a part of this wealth transfer. Newcomers who didn't participate in the Canadian housing market decades ago, and Indigenous people, who were largely prohibited from doing so due to colonial laws, have less to pass down. Home ownership was not permitted on reserves, and Indigenous people were barred from owning and running their own businesses. "We don't even have really a boomer generation to pass stuff down," said Jason Bird, who teaches business at First Nations University of Canada. "Most of the people from that generation, numerous of them have passed on already. They're already gone, but there was never a real inclusion in the wider economy so there wasn't much to leave. "Wealth is kind of judged differently in Indigenous communities. Really, the ability to share more is actually considered wealth. The more you have, the more you can give, and the more you can give, the more it helps numerous people." Converting gifts to donations Donating inherited money has become more popular as inheritances have grown. Donna Ziegler is the executive director of the South Saskatchewan Community Foundation, which helps individuals and businesses set up funds that benefit charities in perpetuity. She leveraged Saskatchewan's agricultural wealth to build a property holding company that donates the proceeds of land rental income to local communities. "When we're talking about intergenerational transfer of wealth, it's keeping that wealth alive onto the next generation," she said. Other people are taking individual steps to donate their newfound wealth. Jess Klassen, who received a $300,000 inheritance, is part of a group called Resource Movement. It educates people on how to redistribute their wealth effectively. "Getting that money really made me think more that I wanted to actually take steps to connect to an organization and make some goals," they said. "How much money do I actually need to live my life in a way that I feel safe living?" Klassen hasn't decided yet on what their strategy will be, but said it will likely involve redistributing a portion of their income and total next worth. Canada has not had an inheritance tax since 1972, so these redistribution efforts remain optional. But Willoughby believes that Canada, which is the only country in the G7 without one, could benefit from studying it. "For generations we have hung our hat on this notion that the CRA is going to tax income, not wealth, and until the CRA changes that tune or the government changes that perspective, I think we are a long way away from an inheritance tax," he said. "I think it would help Canada though to maybe take a look at those jurisdictions that have incorporated this just to see, are there ways of maybe teasing out some of the benefits."
