Hansard: May 19, 2004 (ECO)

STANDING COMMITTEE ON THE ECONOMY Hansard Verbatim Report No. 5 – May 19, 2004 Legislative Assembly of Saskatchewan Twenty-fifth Legislature STANDING COMMITTEE ON THE ECONOMY 2004 Mr. Eldon Lautermilch, Chair Prince Albert Northcote Mr. Lyle Stewart, Deputy Chair Thunder Creek Mr. Michael Chisholm Cut Knife-Turtleford Ms. Doreen Hamilton Regina Wascana Plains Hon. Deb Higgins Moose Jaw Wakamow Mr. D.F. (Yogi) Huyghebaert Wood River Mr. Kevin Yates Regina Dewdney Published under the authority of The Honourable P. Myron Kowalsky, Speaker STANDING COMMITTEE ON THE ECONOMY 53 May 19, 2004 The committee met at 15:00. earlier about rural revitalization, we’d surely like to see those bear fruit in all areas, but rural particularly. General Revenue Fund Industry and Resources One of the problems that I see is that there is a continuing — Vote 23 what’s the right word? — kind of a picking away at the rural economy. And what I’m thinking of is that even though we Subvote (IR01) want the economy to move ahead, there is things like from the last budget, the farm service centres are being closed in many The Chair: — Good afternoon, everyone. We will call the places, including in my area. There is things like highway committee to order. And the first item of business on today’s maintenance depots being put together or amalgamated into agenda is the Department of Industry and Resources. And that’s larger centres. Maidstone is an example of one. found on page 90 of the Estimates book. There’s been a lot of downloading of costs on to the municipal Mr. Minister, would you introduce your officials and we’ll governments, both municipal and education — and now an continue. example, bed closures and jobs in Paradise Hill with the announcement of hospitals. Now I know that’s not your area, Hon. Mr. Cline: — Yes. Thank you very much, Mr. Chair and but it’s . altogether these things add up to a whole bunch of good afternoon to the members of the committee. problems that people in the rural districts are finding overwhelming and are not being able to see any benefits from And with me, I have to my right Mr. Larry Spannier, who is the rural revitalization and the economic development that was deputy minister of the Department of Industry and Resources; promised. and to my left is Ms. Lynn Flury, who’s the vice-president and director of marketing of Tourism Saskatchewan, which as you Can you give me some advice to pass along to my constituents know is a partnership between the Government of in these circumstances? Saskatchewan and the tourism industry. Hon. Mr. Cline: — Well I can certainly try, Mr. Wakefield. I Also with us today are Jim Marshall, the assistant deputy guess what I would say in terms of signals is that — and minister of resource and economic policy; Bruce Wilson, the especially dealing with rural Saskatchewan; that is any part of assistant deputy minister for petroleum and natural gas; Debbie Saskatchewan outside the larger centres — one of the signals Wilkie, the assistant deputy minister of industry development; that we sent out in November 2002 was that we wanted to have George Patterson, the executive director of the exploration and a very competitive regime for oil and gas. geological services branch; Denise Haas, the executive director of investment and corporate resources; Hal Sanders, the And, Mr. Chairman, you’ll remember this very well since I executive director of revenue and funding services. And I believe you were the minister of Energy and Mines at the time. should indicate Bonnie Baird, the manager of research at And one of the things that we did was to considerably change Tourism Saskatchewan. our royalty and taxation structure to try to make new drilling more competitive, especially with the province of Alberta. And also who will be joining us at the table in a while, Mr. Gerry Adamson, who is the vice-president of STEP, the And what we have seen since then — and I know the committee Saskatchewan Trade and Export Partnership, which is a members will be very pleased to hear this — is record drilling partnership between the Government of Saskatchewan and in the oil patch for oil and gas. And that has affected . Mr. industries in Saskatchewan which export goods beyond our Wakefield, you referenced your own community of borders. Thank you. Lloydminster, and I think you’ll be aware that much of the drilling goes on in that area. So that’s a very positive signal, and The Chair: — Thank you, Mr. Minister. Vote no. (IR01) in the it’s working. amount $3,506,000. Is that agreed? And I can tell you that for your area in particular, we also Mr. Wakefield. announced an ethanol strategy within the last year. And I believe that Husky Oil has announced that they’re building an Mr. Wakefield: — Thank you, Mr. Chair. Sorry, I was sleeping ethanol plant in your constituency which I believe is a $100 at the switch here. million investment. So I would say that that’s a positive signal as well. Welcome, Mr. Minister, and officials. As we did before, we’re going to maybe start off with a couple of general questions, and And I can tell you that in other areas of the province, we have then maybe get into some more specifics. also announced a package of incentives for mining, and what we see across the province . And I can tell you I was in Swift One of the items that I think is of real interest in terms of Current last night, and there was a lot of enthusiasm for what’s industry and resources, is how the economy is reacting and happening in rural Saskatchewan and in the Southwest in the oil should be reacting in Saskatchewan to some of the things that patch. have . and is going on. And I’m thinking in terms of the signals that are being sent out, primarily in rural areas, because But what we see also as a result of some of the mining we would surely like to see the objectives that have been stated initiatives that we’re undertaking to encourage exploration and 54 Economy Committee May 19, 2004 prospecting is very big increases in exploration in mining areas. So, sorry for a long-winded response. But there are so many Much of that is in rural Saskatchewan such as the Fort à la aspects to the question in terms of signals we’re trying to send Corne area where diamond activity is quite prevalent. Much of out to build the economy — not just signals, but substantive it is in northern Saskatchewan, and many jobs in the mining activities that we undertake — that I knew that you would want sector are done by people that live in rural Saskatchewan. So I me to answer the question as fully as I could. And I thank you would say that what we’re doing in mining is also a very for giving me that opportunity. positive signal for rural Saskatchewan and I think it bodes well for the future. Mr. Wakefield: — Thank you, Mr. Minister. You have outlined some pretty major initiatives and there are some things In forestry, as well, we have sent out signals over the years that that you referred to that does cause me some concern, however, we want to build the forestry sector and we have seen in the last in my particular area. five years $1 billion new, private sector investment in forestry, mainly of course in the forest belt, mainly in rural Even though the oil and gas industry is really spooling up, we Saskatchewan — including two of the largest oriented strand are not seeing the development of service centres head officed board plants in the world, opening at Meadow Lake and Hudson on the Saskatchewan side. Lots of service industry vehicles are Bay. coming across the border from Alberta and they work there, but they do go back into Alberta to sleep and pay their taxes. That And I actually could go on quite considerably but my point is, is quite a major concern. Mr. Chair, that I truly believe, answering the question what signals we’re sending out, that these are positive signals. The incentives and royalty programs that you’ve put in place, again I acknowledge are going in the right direction. But we do, And I fully appreciate that over the course of decades and remember, have to be very competitive. centuries, economies change, populations shift, and governments and communities that are going to plan well for But let me get back to kind of what I was getting at in the first the future will also change the way that their infrastructure is place, when we were talking about rural centres such as — I delivered. We know that we have better roads and highways know this name — I don’t know; Neilburg, Cut Knife, Paradise than we once had and it affects where we have schools, where Hill, Pierceland, in those areas that we have to compete against we have hospitals. the influence of Alberta. We know that technology for health care is different and people What are the signals that we’re showing them when for instance tend to get their surgeries done in larger centres. People make under investment programs listed in these estimates, the (IR07), choices. We know that people choose to live in different areas where we talked about assistance to business organization, than they did before. And we’ve seen a shift from some of the regionally based economic development organizations, and so rural areas to the urban areas.

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