On April 30, I wrote a post titled, “Saskatchewan Economy Underperforms on Expectations,” following the release of StatsCan’s report on provincial economic performance, which showed Saskatchewan’s “real gross domestic product” at a disappointing 2.8% over 2007, well below the expectations of several Canadian economists. This post set off a fire storm of discussion with many concluding that Saskatchewan is a losing province, hardly able to top national GDP averages in spite of receiving all kinds of positive press across the country and around the globe.
The rest of the story followed this week as StatsCan released a report on “nominal gross domestic product,” which stated that Saskatchewan has “stepped into a new era of prosperity.”
It’s my understanding that real gross domestic product is a measurement of productivity in an economy, while nominal gross domestic product is a measurement of dollar volume generated by an economy. Apparently, it’s the latter that gives Saskatchewan much higher marks.
From the StatsCan Report
- Newfoundland and Labrador's economy led the nation in terms of growth in nominal gross domestic product (GDP) in 2007, at 13.4%. Saskatchewan followed with growth of 11.4%, ahead of Alberta's 8.3%.
- Newfoundland and Labrador's growth in nominal GDP of 76% between 2002 and 2007 also topped Alberta's gain of 73%. Saskatchewan posted the third highest gain over the period, its GDP advancing 49%.
- Higher crude oil prices have been driving the boom in Newfoundland and Labrador and Saskatchewan. They are the top producers of crude petroleum in Canada after Alberta, accounting for almost one-third of Canada's production.
- In 2007, Saskatchewan exported $21 billion to other countries, a 13% increase over 2006. This placed Saskatchewan behind only Newfoundland and Labrador for the title of fastest growing provincial exports. In addition to crude oil, agricultural products, potash, and uranium have made major gains since 2005.
- Perhaps most significantly, both Newfoundland and Labrador and Saskatchewan have reversed their long-term trend of a declining population…Saskatchewan's population grew 0.8% in 2007, its first increase in over a decade, which put the population once again to 1 million. Moreover, the population of the 15 and over age group in Saskatchewan in April 2008 was 2.0% larger than it was in April 2007.
- As incomes have risen and population growth has resumed, Newfoundland and Labrador and Saskatchewan consumers have gone on a buying binge, leading provincial growth in retail, housing and auto sales.
Read the StatsCan report on nominal gross domestic product here.
Read the StatsCan report on real gross domestic product here.
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Norm Fisher
Royal LePage Vidorra