Category Archives: agriculture
Farming the World: China’s Epic Race to Avoid a Food Crisis
By Bloomberg News
May 22, 2017
China’s 1.4 billion people are building up an appetite that is changing the way the world grows and sells food. The Chinese diet is becoming more like that of the average American, forcing companies to scour the planet for everything from bacon to bananas.
But China’s efforts to buy or lease agricultural land in developing nations show that building farms and ranches abroad won’t be enough. Ballooning populations in Asia, Africa and South America will add another 2 billion people within a generation and they too will need more food.
That leaves China with a stark ultimatum: If it is to have enough affordable food for its population in the second half of this century, it will need to make sure the world grows food for 9 billion people.
Its answer is technology.
China’s agriculture industry, from the tiny rice plots tended by 70-year-old grandfathers to the giant companies that are beginning to challenge global players like Nestle SA and Danone SA, is undergoing a revolution that may be every bit as influential as the industrial transformation that rewrote global trade.
The change started four decades ago when the country began to recast its systems of production and private enterprise. Those reforms precipitated an economic boom, driven by factories, investment and exports, but the changes down on the farm were just as dramatic.
Land reforms lifted production of grains like rice and wheat, and millions joined a newly wealthy middle class that ate more vegetables and pork and wanted rare luxuries like beef and milk.
When Du Chunmei was a little girl, pork was a precious gift only for the elders of her village in Sichuan during the Lunar New Year holiday. The family pig would be slaughtered, and relatives and neighbors would pack their house for a feast.
“Meat used to be such a rarity,” said Du, now 47 and an employee of state oil company PetroChina Co. whose family celebrated the holiday this year at a restaurant. “Now it’s so common we try to cut back to stay healthy.”
But the breakneck pace of the country’s development brought some nasty side effects. Tracts of prime land were swallowed by factories. Fields were polluted by waste, or by farmers soaking the soil in chemicals. The country became a byword for tainted food, from mercury-laced rice to melamine-infused milk powder.
So how can China produce enough safe food for its growing population if they all start eating like Americans?
The simple answer is it can’t.
It takes about 1 acre (half a hectare) to feed the average U.S. consumer. China only has about 0.2 acres of arable land per citizen, including fields degraded by pollution.
So China’s Communist government has increasingly shifted its focus to reforming agriculture, and its approach divides into four parts: market controls; improving farm efficiency; curbing land loss; and imports.
A bucolic scene of goatherders returning with their flock in the evening is just one part of Penglai Hesheng Agricultural Technology Development Co.’s 70,000 hectare showcase farm that is rearing local breeds of livestock and experimenting with the cultivation of dozens of types of crops.
In each case, technology is the key to balancing the food equation. The nation is spending billions on water systems, seeds, robots and data science to roll back some of the ravages of industry and develop sustainable, high-yield farms.
It needs to succeed quickly, because China’s chief tool during the past decade for boosting domestic production is backfiring.
China has a goal of being self-sufficient in staple foods like rice, corn and wheat. To ensure farmers grew those crops, it paid a minimum price for the grains and then stored the excess in government silos.
Farmers responded, saturating their small plots with fertilizers and pesticides to reap bumper crops that filled government reserves to bursting.
Total state grain reserves were estimated to be to be more than 600 million tons last year, enough for more than a year’s supply. About half the stockpile is corn, which the government is trying to sell before it rots, forcing provinces to turn the grain into motor fuel.
“We have exhausted our resources and environment and used as much fertilizer and pesticide as possible to address supply shortages,” Han Jun, deputy director of the Office of the Central Rural Work Leading Group, wrote in the government-backed People’s Daily on Feb. 6. “We urgently need to increase production of green and good-quality agriculture products.”
But first it needs to preserve what little farmland it has.
China only has about 0.2 acres of arable land per citizen, including fields degraded by pollution. Areas like this one on the outskirts of Shanghai are becoming typical with small farmed plots being gobbled up by encroaching construction.
China lost 6.2 percent of its farmland between 1997 and 2008, according to a report by the United Nations’ Food and Agriculture Organization and the OECD. And local governments continue to swallow fields for more-profitable real-estate developments. The Chinese Ministry of Agriculture did not respond to requests for comment on this story.
Officially, the rate of land conversion has slowed since 2007, when China announced a goal of “maintaining 1.8 billion mu of farmland” (120 million hectares). But local governments that have relied for years on land sales to fund growth can circumvent restrictions by counting marginal land as arable, or re-zoning urban areas as farms.
More alarming for the nation’s planners are reports that almost 20 percent of China’s remaining arable land is contaminated.
China is shifting from building grain stockpiles to focusing on quality, efficiency and sustainable development, said Tang Renjian, a former official at the Central Rural Work Leading Group, the country’s top rural decision-making body.
Government studies in 2014 found that some vegetable plots were dosed with high levels of heavy metals such as cadmium, just one of a series of poison scares that has made the public wary of domestically produced food.
Over the years, local TV stations and social media fanned the fears, reporting a sickening array of scandals, from soy sauce produced with human hair to tofu made with sewage, and cat and rat meat passed off as rabbit and lamb.
“Chinese people are much more aware of food-safety problems today than a decade ago,” said Sam Geall, a research fellow at the U.K.’s University of Sussex who focuses on China’s environment and agriculture. “They pay more attention to where their food is coming from, and they are often willing to pay more for safety.”
Chinese-owned businesses are taking notice, seeking out overseas investments that they can turn into premium brands on supermarket shelves at home.
Ningbo chemical baron Lu Xianfeng’s Moon Lake Investments Pty bought Australia’s biggest dairy operation last year, while Wan Long’s WH Group Ltd. became the world’s largest pork producer with the purchase of Virginia-based Smithfield Foods Inc.
WH Group’s 2013 purchase of Virginia-based Smithfield was part of a $52 billion overseas spending spree by Chinese food companies since 2005 as China’s population became wary of home-produced food. This WH Group factory in Zhengzhou, China, makes American-style pork products from imported Smithfield meat.
“The Chinese consumer has grown very cynical about the safety of food from their own country,” said Sean Shwe, managing director of Moon Lake, which flies fresh milk from Tasmania to China. “The food trade into China has become very lucrative.”
A change in diet is accelerating the search for overseas supplies. Beef sales to China have risen 19,000 percent in the past decade. Imports of soybeans, used in animal feed, have grown so fast that the government quietly dropped the grain from its self-sufficiency list in 2014.
“China needs to import as it is unable to produce everything from its limited farmland,” said Li Xiande, a researcher with the Institute of Agricultural Economics and Development, Chinese Academy of Agricultural Sciences, who said the country bought 106 million tons of cereals and soybeans abroad in 2016. “The country aims at self-sufficiency in staple grains and all other imports would be based on market demand.”
But China will face increasing competition from a population explosion across dozens of countries in the Southern Hemisphere.
By 2050, 14 of the world’s 20 biggest metropolises will be in Asia and Africa, with Jakarta, Manila, Karachi, Kinshasa and Lagos joining Tokyo, Shanghai and Mumbai, according to a projection by Demographia.
By then, the planet could have as many as 9.7 billion mouths to feed, according to a United Nations report. Factor in changing diets and we will need to raise global food output by 70 percent from 2009 levels, according to an FAO estimate.
The world got a taste of what might be to come a decade ago, when smaller harvests and a rapid adoption of biofuels led to a global food shock, with riots over price increases in some developing nations.
Constrained by a shortage of land and the effects of pollution, Chinese farms are adopting methods of indoor cultivation that can produce a lot of food safely in a limited space. In this Hesheng greenhouse, workers develop techniques to grow organic tomatoes.
That was one impetus behind China’s so-called land grab, where it bought or leased land in countries like Mozambique to secure grain supplies. Yet many of the projects backed by the Chinese government are aimed more at increasing production in poor countries and building China’s global influence than supplying its supermarkets.
The real effort to create another green revolution is happening back home, where entrepreneurs are embracing technology to transform the nation’s rural landscape.
China’s new breed of farmer isn’t staring at the sky to predict rain, he’s using a micro-irrigation system based on an array of soil sensors that feed data wirelessly to his smartphone. He’s growing vegetables in climate-controlled shipping containers and using drones to apply computer-formulated doses of pesticides.
Such farms are still a tiny minority, partly because of the difficulty in acquiring enough land to run an efficient operation. Beijing’s policy since 2014 has been to promote “appropriate sized” family farms of about 13 hectares or less depending on location.
But most Chinese farms are much smaller. China’s 260 million rural households work 120 million hectares of farmland—making the size of the average plot per rural family less than half a hectare, according to Zhong Funing, head of the International Research Centre for Food and Agricultural Economics at Nanjing Agricultural University.
New laws in November have eased the ability of companies to acquire larger tracts of land, but the government remains wary of change that would unsettle its vast rural population.
Even with a modest average farm size of 13 hectares, the country would need fewer than 10 million families working the land.
“How can the rest of farmers find jobs in cities if they abandon the land?” Zhong said. As a result, the development of large, high-tech farms may be slow, he said.
In the meantime, China’s best option may be the same as for many developed nations—improve people’s diet.
“The demand among the middle class in China to move up the food chain is a matter of status and wealth,” said Jeremy Rifkin, author of “Beyond Beef: The Rise and Fall of the Cattle Culture.” “It’s not sustainable.”
In China, the National Health and Family Planning Commission began a campaign in 2015 to encourage citizens to cut back on meat and unhealthy foods and eat more vegetables and fruit to counter rising levels of obesity and diabetes.
The cycle has brought Du in Chengdu full circle.
Du Chunmei tends her organic farm on the roof of her husband’s factory in Chengdu after becoming disillusioned with the quality of supermarket food. “Being able to plant your own food is a luxury. You need to find space.”
Now her family again buys a pig each year, but not for the New Year feast. She does it to be sure of what the animal ate, insisting the farmer feeds it only corn and vegetables for eight months before slaughter.
With the help of her 75-year-old mother, Du grows peppers, cabbage, eggplants and pumpkins on the roof of her husband’s factory. Some two dozen chickens and ducks share the space, pecking on organic feed.
“There’s so much pesticides, pollutants and fertilizer in the food sold in supermarkets,” Du said. “Being able to grow your own food is a luxury.”
Liberals release carbon-tax plan, brace for legal battle with Saskatchewan
OTTAWA — The Globe and Mail
Published Thursday, May 18, 2017 12:37PM EDT
Last updated Thursday, May 18, 2017 12:43PM EDT
Preparing for a promised legal battle with Saskatchewan, federal Environment Minister Catherine McKenna says she’s confident Ottawa has the authority to impose a carbon price across the country, even when that levy would apply to provincially owned utilities.
The minister on Thursday released a technical paper on Ottawa’s proposed carbon tax, which will apply in provinces where premiers refused to adopt their own plan, or add to provincial levies where provincial governments adopt carbon-pricing programs that do not meet minimum federal standards.
In an interview, Ms. McKenna said the federal government is on “very strong ground” constitutionally, despite Saskatchewan Premier Brad Wall’s argument that its carbon-pricing plan would intrude on provincial jurisdiction, especially as it relates to government-owned SaskPower, which relies heavily on coal for its electricity generation.
“If they are imposing this tax, our response is ‘see you in court,’” a spokeswoman for Mr. Wall said in an e-mail. Saskatchewan is the only province that refuses to consider a carbon price – whether a tax or cap-and-trade approach – but several others have not committed to meeting Ottawa’s minimum pricing standards.
Ms. McKenna said the federal government has clear authority to regulate on cross-border environmental matters in order to reduce pollution. She said all revenue would be returned to the province in which it is collected, and added the government is considering providing direct rebates to households and business to offset the impact of rising energy costs.
“This is not a tax; this is a levy and the revenue is going back into the province,” the federal minister said. “As the federal government, we need to be taking action to protect the environment and it is well within our jurisdiction to do so. But we hope Saskatchewan will design a system that works best for them.”
Under the federal plan, either Ottawa or provincial governments that have no pricing system would introduce the carbon levy next year, beginning at $10 per tonne and rising to $50 per tonne by 2022. A $50 per tonne carbon price would add 11.6-cents per litre of gasoline, and would also hit natural gas, and electricity generated from coal or natural gas.
Provinces can also opt to adopt a cap-and-trade plan, which keeps prices lower because companies can purchase cheaper “allowances” from California. Alberta and British Columbia have carbon taxes, while Ontario and Quebec have cap-and-trade systems that require fuel distribution companies to purchase permits, the cost of which get passed along in the price of gasoline and home heating fuel.
The paper released Tuesday proposes a hybrid carbon levy, similar to one adopted in Alberta.
Fuel distributors would have to collect the tax from consumers. Farmers would be exempt from paying the tax on fuel used in farm operations, while Ottawa is still considering how to cover fuel used on interprovincial flights within Canada. International flights are covered by an industry-wide cap-and-trade plan.
In order to protect competitiveness, Ottawa would only tax a small portion of emissions from large industrial plants that consume a lot of fossil fuels and face global competition. As in Alberta, the amount of the levy would depend on how emissions-intensive a company is compared to others in its sector, with more-efficient operators getting a bigger break.
Conservative politicians have attacked the Liberal carbon-price plan as an unwelcome burden that will make the country less competitive, particularly as President Donald Trump and the Republican-led Congress promise deregulation and tax cuts in the United States.
Ms. McKenna said carbon pricing is the most economically efficient way to reduce emissions that cause climate change, a view that has been endorsed by some prominent business leaders, including executives from Canada’s biggest oil sands producers. She noted many major economies – including the European Union, Mexico, China and California – are moving forward on carbon levies.
“Everyone realizes you want to put a price on pollution because pollution isn’t free,” Ms. McKenna said. “We know it’s causing droughts, fires and floods, and that our Arctic is melting in our country, and across the world. And also pollution has a very significant impacts on our health.
“And if you’re going to have a serious climate plan, you need to put prices on pollution because it also creates the incentive for companies to innovate and provide clean solutions, and provides certainty to business that we’re serious about moving to a cleaner economy.”
Grain Millers expands Sask. oat plant
Posted Mar. 24th, 2017 by Robert Arnason
Grain Millers, one the largest oat buyers in Western Canada, has quietly announced a $100 million expansion of its plant in Yorkton, Sask.
In a news release issued Friday afternoon, Grain Millers Canada Corp. said the project would add 80,000 tonnes of production capacity to its mill, where it manufactures a range of conventional and organic oat products.
“We’ve operated in Saskatchewan for 20 years,” said Terry Tyson, grain procurement director for Grain Millers.
“Yorkton is in the heart of oat country and, with the skilled workforce we have here, it is a great location for us to continue growing our milling business.”
Grain Millers has headquarters near Minneapolis and it operates mills in the U.S. Midwest, Oregon, Mexico and Yorkton. Along with Richardson International, it is one of the largest oat processors in Western Canada.
“This expansion is the latest in a series of capacity and capability investments for (Grain Millers),” said Steve Eilertson, company president.
A bigger oat mill means that Yorkton, already home to two major canola crushing plants, becomes an even larger destination for prairie grains and oilseeds.
The Grain Millers expansion will create 25 new and permanent jobs, along with 110 jobs during construction.
“Our government welcomes this large $100 million investment,” said Premier Brad Wall in a statement.
“Our government has worked hard to strengthen the Saskatchewan Advantage and we will continue to ensure we have a competitive environment for projects like this one.”
Grains Millers said the project should be complete by late 2018.
Below Normal Snowpack Impacting Spring Runoff Outlook in Most of the Province
Released on February 9, 2017
Today, the Water Security Agency (WSA) released the 2017 preliminary outlook for spring runoff.
Most of the province received below normal snowfall resulting in a below normal runoff potential across most of Saskatchewan. Many areas saw the snowpack almost completely melt or lost to sublimation in January due to above normal temperatures. This melting of snowpack would have saturated the soil surface, reducing the infiltration capacity available for the melt of any late season snow.
The southeast portion of Saskatchewan is the exception. The snowpack in the southeast is near normal, increasing to well above normal in the very southeast corner. Above normal runoff is expected in the lower Souris River Basin below Rafferty and Alameda Dams, including the Antler River, Gainsborough Creek, and Lightning Creek basins.
This is a preliminary outlook and the snowpack could continue to develop for another 6 to 10 weeks. Also, it is important to note that a majority of the province was wetter than normal going into freeze-up in November of 2016. Higher than normal precipitation going forward and/or a rapid spring melt could significantly increase the runoff potential.
Although the snowpack in most areas is below normal, even a below normal runoff could compound flooding issues in regions with closed basins as many of these areas are at well above normal or record levels following several high runoff years.
The Water Security Agency will be coming out with the 2017 Spring Runoff Forecast in March. For more information on spring runoff or stream flows and lake levels visit www.wsask.ca.
For more information, contact:
Water Security Agency
The video interview is below.
Unemployment Rate Drops in December
Released on January 6, 2017
Saskatchewan recorded a 6.5 per cent unemployment rate (seasonally adjusted) in December 2016, down from 6.8 per cent in November 2016. There were 563,000 people employed in the province in December 2016. Year-over-year, there was a decrease of 7,900 jobs.
Over the same period, Alberta recorded a loss of 17,300 jobs, while Newfoundland and Labrador recorded a loss of 5,700 jobs. All three oil producing provinces recorded the highest job losses in Canada.
“We are pleased to see the unemployment rate drop for the second consecutive month,” Economy Minister Jeremy Harrison said. “It should be noted that the largest job losses recorded in 2016 were in the three oil producing provinces. This clearly indicates now is not the time for a job-killing carbon tax.”
Saskatchewan had the fourth lowest unemployment rate in the country, below the national average of 6.9 per cent (seasonally adjusted).
Other December 2016 highlights include:
- Major year-over-year gains were reported for trade up 5,200; professional, scientific and technical services up 4,500; public administration up 2,300.
- Off-reserve Aboriginal employment was up 4,600 for six consecutive months of year-over-year increases.
- Saskatchewan’s youth unemployment rate was 10.3 per cent (seasonally adjusted), second lowest among the provinces, behind British Columbia (8.5 per cent), and below the national rate of 12.6 per cent.
- Aboriginal youth employment was up 1,500 for eight consecutive months of year-over-year increases.
For more information, contact:
From Brad Walls Facebook Page
January 6th, 2017
Hey Saskatchewan – here is a reminder of how much you will contribute to Canada in the coming year.
In 2017, $18 billion in equalization payments will be provided to six provinces while four provinces, including Saskatchewan, receive nothing. That’s because, for the 10th year in a row, Saskatchewan is a ‘have’ province.
So Saskatchewan will contribute $580 million this year to equalization from our 1.16 million residents (about $500 from every man, woman and child). Over the past decade, that’s more than $5 billion from our province’s taxpayers while receiving $0 equalization dollars.
Just thought you should know, you are definitely doing your part.
Carbon tax could compromise Canadian food sovereignty
Special to The Globe and Mail
Published Monday, Dec. 19, 2016 5:00AM EST
Last updated Sunday, Dec. 18, 2016 5:10PM EST
Sylvain Charlebois is dean of the faculty of management and professor in food distribution and policy at Dalhousie University.
From farm to fork, our food is responsible for around 25 per cent of the world’s greenhouse gas emissions. This is much higher than what most people would think. Whether we realize it or not, every decision a consumer makes when picking what to eat has an impact on our environment, and many want to do something about it. The federal government recently mandated a tax on carbon emissions. A mandatory tax of $10 a tonne is set to start in 2018 and provinces are expected to produce their own plans. While energy prices are expected to rise, the impact on food costs has garnered scant attention.
Grocers will likely continue to seek affordable foods for their customer. The concern, of course, is that Canadian goods with a carbon tax may become much less attractive from a price perspective. This would encourage grocers to import more foods, regardless of the dollar’s value, a trend we have seen over the past few years. While food prices will likely increase over the next few years, carbon taxes will hardly be to blame since importers have choices about where they buy their products. A tax on carbon won’t make more Canadians food insecure – the issue is more about food sovereignty for certain sectors.
Prime Minister Justin Trudeau’s announcement about a carbon tax occurred weeks before a new U.S. administration. With Donald Trump ascending to the White House, the timing of the carbon deal is worrisome for the Canadian agriculture and food sector. Under Mr. Trump, the United States is likely to remain idle on policies to mitigate climate change. This would make our agrifood systems much less competitive. Coupled with a possible reduction in U.S.-based corporate tax rates, Canada could be isolated as the only green-focused economy in North America. To make matters worse, our food economy remains vulnerable to currency fluctuations. When the loonie tanks, food prices go up. However, we have seen many new greenhouse projects emerge in recent years, particularly in Ontario, which could potentially make the Canadian market much less susceptible to abrupt retail price fluctuations. A price on carbon may stop these initiatives from coming to fruition. Working together to protect the environment only makes sense, but we need to move forward with great caution. To give market currency to carbon is a necessary step toward a more sustainable food system, but our policies must capture our global reality. Due to the aggressive campaign on carbon here, firms could relocate to lower-cost countries. Canada has seen more than 150 firms close or relocate since 2008 in Canada, affecting almost 30,000 jobs.
A carbon tax will clearly discriminate against certain agricultural sectors. As a recent EU study noted, prices under a carbon tax would increase between 15 per cent and 40 per cent at farm gate for the most greenhouse gas-intensive foods such as beef, lamb and dairy products. Thus, it would be easy to speculate that consumption could fall by as much as 15 per cent for some products. The result would affect major sectors in our agricultural economy. According to the same study though, health gains could be made since some of these products are deemed unhealthy if not consumed in moderation. A win-win perhaps, but consumers should be given the opportunity to adapt, as consumption habits are often difficult to break.
Unlike the cap-and-trade solution, for example, a carbon tax provides certainty on how carbon is priced, but the amount of emissions reductions is always difficult to predict. And who knows what could happen to tax revenues given funds allocated to Ottawa’s budgetary black hole. However, it is the most effective instrument the federal government can use to entice provinces to act.
Provinces where agriculture is a significant part of the economy could opt for a cap-and-trade scheme that would guarantee emission reduction and reward good stewardship. For example, with no-till farming, precision agriculture and better equipment, Saskatchewan annually sequesters about nine million tonnes of carbon. At $50 a tonne, which is the federal carbon price set for 2022, that sequestered carbon would have a value of more than $450-million. Beyond just taxing carbon, a hybrid approach could be substantially more powerful.
In the grand scheme of things, it boils down to one thing: Our current food consumption trends in Canada are, for the most part, environmentally unsustainable. The price we pay at the grocery store does not reflect the true cost of food production and distribution. We all know that. So doing nothing is no longer an option and most would recognize that the writing is on the wall. However, given that we live in a borderless world, Ottawa should also recognize that not everyone on earth wants to save the planet.
Saskatchewan reaches deal to keep using coal-fired plants
REGINA — The Canadian Press
Published Monday, Nov. 28, 2016 11:38AM EST
Last updated Monday, Nov. 28, 2016 1:08PM EST
Saskatchewan says it has reached a deal with Ottawa that will allow the province to keep using coal-fired power plants in what it calls “a responsible manner” beyond 2030.
The federal government announced last week that provinces will have to phase out coal entirely and replace it with lower-emitting sources by 2030 or use carbon capture and storage technology.
Saskatchewan uses carbon capture at one of its coal-fired power plants, but hasn’t made a decision about installing the technology at other plants.
The agreement will allow the province to meet federal emission requirements over time on an electricity system-wide basis, as opposed to regulation of every coal-fired plant.
The deal also acknowledges Saskatchewan’s work in advancing carbon capture and storage and the province’s move to 50 per cent renewable energy generation by 2030.
Almost 50 per cent of the electricity generated in the province uses coal as a fuel source, but coal-fired units are among the largest sources of air pollution in the country.
- 15 Nov 2016
- Saskatoon StarPhoenix
- BRUCE JOHNSTONE
‘Worst appears over’ for Saskatoon economy
Conference Board of Canada predicts moderate growth for city, Regina in ’17
Ongoing weakness in oil, potash, and agricultural markets will limit Regina’s economic growth to 1.3 per cent this year, while construction and services strength will offset the effects of weak resource prices, helping Saskatoon’s GDP grow by 1.7 per cent in 2016, according to the Conference Board of Canada’s latest forecast.
But the “worst appears to be over,’’ the Ottawa-based economics forecasting agency said Monday. Next year, both cities should perform better, with Regina’s economy projected to grow by 1.8 per cent and Saskatoon’s by two per cent in 2017, said the board’s metropolitan autumn outlook.
While much improved from the 0.5 per cent contraction last year, Regina’s projected GDP growth for 2016 and 2017 “pales in comparison with average growth rates exceeding four per cent during the decade to 2014, including a huge 6.6 per cent output jump in 2011,’’ the report said. “And even such modest growth prospects hinge on improvements in commodity prices, which are slow in coming.”
Accordingly, Regina’s real GDP is forecast to grow less than two per cent in both 2018 and 2019. Employment has held up surprisingly well, advancing nearly one per cent in 2015, although this gain was modest by boom-era standards. Similar job growth is on tap for 2016, but only a small advance is expected in 2017.
The unemployment rate is forecast to average 5.4 per cent in 2016, up from 4.4 per cent in 2015 and an unusually low 3.7 per cent in 2014. Next year, the rate is forecast to pull back to 5.2 per cent. “Although these expected rates are high by recent standards, they remain below those of the late 1980s and early 1990s — a signal of Regina’s general economic improvement,’’ the report said.
Ongoing net in-migration is another positive sign, the report said. Although inflows have fallen since 2012-2014, Regina should see more than 3,000 newcomers both this year and in 2017.
Output of Regina’s manufacturing sector is on track to expand 1.2 per cent this year and two per cent next year, following a 1.8 per cent dip in 2015.
Saskatoon’s projected real GDP growth of 1.7 per cent this year follows a 0.4 per cent drop in 2015, the first decline since the 2009 recession and a sharp drop from GDP hikes averaging just under six per cent in the previous five years.
Employment rose just 0.5 per cent in 2015, and jobs will be lost this year, although 2.2 per cent employment growth is on tap for 2017. Recent job weakness has shown up in a higher unemployment rate, which jumped 1.6 percentage points to 5.8 per cent in 2015 and is forecast to rise to 6.3 per cent for 2016, but forecast job growth will trim the unemployment rate to 5.6 per cent in 2017.
Weak employment conditions have slowed but not reversed net migratory inflows, which peaked at over 9,300 people in 2012. “We expect net arrivals nearer 4,000 people annually both this year and in 2017, trimming population growth to roughly two per cent,” the report said.
Saskatoon’s manufacturing output is poised to decline for a third straight year in 2016, although stronger three per cent output growth is on tap for 2017. Manufacturing employment has fallen 18 per cent in the past two years, including an 11 per cent drop last year.