This might come as a surprise but the last two times Saskatchewan has gone through economic good times, it was not the result of high commodity prices — at least not directly.
Both of the most recent economic upswings in Saskatchewan were fueled by investment or capital spending. For accountants, this means activity on the balance sheet rather than what most of think about, which is the income statement.
Income is a result of sales of our goods and services – and that includes commodities such grain and oilseeds or potash, uranium and oil. For most of us, this is how we measure boom times.
But, when you dig a bit deeper, you discover that income generates investment. Strong potash demand and prices, for example, leads to mine expansion.
That’s the big headline story in Saskatchewan this week with BHP’s mega-announcement of another round of investment and expansion at Jansen. It also effectively extended Saskatchewan’s current economic upswing by years as capital will continue to flow for most of this decade, a development that will also attract more population.