STEP ArticlesTrade & Commerce MagazineSaskatchewan Export Growth Eclipses Rest of Canada “In our province, exports generate over 70 per cent of GDP, a dramatically higher rate than other provinces. But in our economy it’s everything! Literally every person in our province directly benefits from our province’s export potential.” Saskatchewan’s export market continues to outperform all other provinces in the country. During the first eight months of 2008, the value of Saskatchewan’s international exports increased by 54.3 per cent, to $20.5 billion, compared to the same time period in 2007. The national average paled in comparison, at 4.9 per cent, over the same time period. In August 2008 alone, the value of Saskatchewan exports skyrocketed by 104 per cent, the highest increase ever recorded. The whopping jump was attributed to increased exports of petroleum products, agriculture commodities and minerals, in particular, potash products. LaBelle anticipates Saskatchewan will be very close to $30 billion in export sales in 2008, close to $10 billion higher than 2007’s record-breaking total. He attributes the strength of Saskatchewan’s export economy to its diversity. “Some of the phenomenal increases are due to increasing commodity prices, in the energy, mining and agriculture sectors. But collectively, all of our other industries are doing exceptionally well,” says LaBelle. “Manufacturing is up 31 per cent over last year. Everybody said when the Canadian dollar was on par with the U.S. dollar, the manufacturing sector would really be hurt. The reality is, it hasn’t been hurt.” Short-line farm equipment was once the primary focus of Saskatchewan’s manufacturing sector. Now the sector has a much broader base, including the manufacture of specialized equipment for the mining and energy sectors. “What most people don’t realize is that Saskatoon is now the largest steel fabricating city west of Toronto,” says LaBelle. The province has also seen rapid expansion in the manufacture of advanced electronics and instrumentation. Equally diverse are the province’s trading partners. Saskatchewan is second to British Columbia in terms of reliance on the U.S. market. “The U.S. market is still very important to us, representing 70 per cent of our total exports, but we sell more to other countries percentage-wise than any other province,” says LaBelle. Saskatchewan’s global trading partners include China, India, Japan, the European Union, Middle East, Latin and South America. “The U.S. is only expected to have 1 to 2 per cent growth at best over the next five or six years, where economies like India and China are having double-digit growth, year after year. STEP’s strategy is to engage other markets around the globe to take up a larger volume of our business,” says LaBelle. “The global financial crisis is real and its effects on Saskatchewan are uncertain. What may be perception to some are becoming very real to many global jurisdictions. Saskatchewan on many accounts appears to be somewhat insulated but not isolated from many of the issues being discussed. The ultimate impact to our economy remains uncertain but leading economists remain optimistic in regards to Saskatchewan's future prosperity.” STEP takes a targeted approach to trade development, says LaBelle. “We’re not a large organization. We have to do things very strategically – going after very specific trade leads. For example, we just got back from the Baltic States – Estonia, Latvia and Lithuania – where we had heard about the potential demand for some of Saskatchewan’s manufactured goods. We came back with some fabulous leads that we’re very excited about.” STEP assists its exporter members to reach new markets through specially tailored services and programs. The organization provides its members with over 300 customized market intelligence reports and over 2,200 qualified trade leads annually. “At any given time, our market intelligence team has 35 to 40 market intelligence reports that they’re working on,” says LaBelle. STEP even provides Saskatchewan exporters with an innovative program of short-term, affordable financing. “The nextrade™ finance program was created in direct response to the demands of exporters who regularly faced challenges and barriers to growing their businesses outside the borders of Saskatchewan,” says LaBelle. A capital pool totaling $2.2 million has been established through operational funding from Western Economic Diversification Canada, and financed through the Ministry of Enterprise and Innovation and the Saskatchewan Ministry of Agriculture. Since nextrade™ finance began operations in November 2004, the program has successfully supported 463 export transactions for more than 40 Saskatchewan-based companies. The total volume supported through these transactions amounts to more than $20 million in export sales. In February of 2008, nextrade™ finance underwent a policy review and update, and was relaunched in June. The restructuring resulted in greater clarity and detail, says LaBelle. “To enhance the value of nextrade finance and its services, I hired two retired bankers. Both individuals bring over 50 years of combined lending experience and history working with Saskatchewan industries.” STEP itself has become a Saskatchewan exporter, through the establishment of STEP International. The organization is exporting its expertise and core strengths as international trade trainers and professional consultants to other countries around the globe. Working with international financial institutions such as the Canadian International Development Agency (CIDA) and the World Bank, STEP International bids on strategic international development opportunities, then works with a consortium of Saskatchewan firms to manage the projects. Not only do these international projects create a revenue stream for the non-profit trade organization, they help to expand STEP’s on-the-ground knowledge and expertise in emerging markets. LaBelle points out that many of tomorrow’s trade opportunities will be found in these developing economies. For example, STEP International has managed four successful initiatives in the Ukraine, beginning with a small forage seed development project in the late 1990s. Currently, STEP is overseeing the Canada-Ukraine Facility for Agriculture Reform and Modernization (FARM) Program, funded by CIDA. “This is a five-year project that was just extended for two more years. We have established 19 agriculture extension service offices throughout the Ukraine that provide information on best practices related to agricultural and rural development. We have 51 people employed there,” says LaBelle. STEP International was recently awarded a new one-year project for the United Nations, valued at $1 million, competing against many international proposals for the contract. “We are writing a very detailed manual for trade facilitations, that will help emerging economies facilitate trade in this global economy,” says LaBelle. “There are two parts to that program. The first is the development of the detailed manual. The second is a teaching component. We currently have colleagues in Malaysia who are involved in the teaching process. The document and the teaching process will be completed at the end of March 2009. “It’s a good story. Here we are, a bunch of people from Saskatchewan, drafting a document for the United Nations on how to make countries competitive in this global environment, based on our competencies regarding world trade. We feel pretty good about what we’re delivering.” |
Member LoginRight-Column Content BoxReginaP.O. Box 1787320-1801 Hamilton St. Regina, Saskatchewan Canada S4P 3C6 Phone: 306-787-9210 Fax: 306-787-6666 Toll-Free: 1-877-313-7244 in North America Saskatchewan Exporter Hotline: 1-888-XPORTSK (9767875) (toll-free in North America) Saskatoon400 - 402 21st Street E.Saskatoon, Saskatchewan Canada S7K 0C3 Phone: 306-933-6551 Fax: 306-933-6556 Toll-Free: 1-877-313-7244 in North America Saskatchewan Exporter Hotline: 1-888-XPORTSK (9767875) (toll-free in North America) |
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