BOOM TIMES IN Introduction

If you don’t live in the province of second largest producer of oil. Although Focus Saskatchewan, you might picture a quiet oil was found in the province 50 years This News in Review story focuses on province famous for its flat farm fields ago, at that time the easy crude was the economic that seem to stretch on forever where extracted and the rest was left behind. boom occurring relatively little happens. After all, for The remaining oil was considered to be in Saskatchewan. years the province has struggled with too difficult to reach. But technology Commonly referred high levels of unemployment and a has changed, and the world’s thirst to as “Saskaboom,” declining population. But in the past few for oil has continued. As a result, the this previously quiet years, the picture has changed. energy companies have returned to the province is reaping the rewards of high prices This year, Saskatchewan and province and are now extracting the oil for oil, potash, wheat, are expected to lead the country in left behind. Scott Skatsburg, the CEO and other products. economic growth. In Saskatchewan, of Crescent Point Energy, estimates that This story will explore high prices for oil, potash, uranium, farm $10-billion will be spent to extract the the many people equipment, wheat, and other crops have remaining oil. and economic sectors turned this quiet prairie province into Some observers are concerned that the benefiting from the an economic powerhouse. The housing economic boom in Saskatchewan will boom as well as some of the challenges and construction industries are booming, lead to some of the problems currently resulting from this and high paying jobs are plentiful. The being experienced by oil-rich . rapid growth. province is making so much money right But others argue that Saskatchewan’s now that if it was a country, its economy, economy is more diversified than on a per-person basis, would make it the Alberta’s, so the province should be able Did you know . . . fifth richest in the developed world. to avoid some of the problems facing In 1931, Saskatchewan A big chunk of this prosperity is Alberta. Time will tell. was the third most populous province in linked to oil. Saskatchewan is Canada’s Canada, behind only and . To Consider Depression and a weak 1. What are some of the specific benefits that might be experienced by economy contributed teenagers and young adults because of the economic boom in the to eight decades of province? decline. 2. When an economy is booming, how are non-profit services like education and health care affected?

3. Would you consider leaving your home province for another province that was booming? Why or why not?

CBC News in Review • September 2008 • Page 47 BOOM TIMES IN SASKATCHEWAN Video Review

Did you know . . . Pre-Viewing Activity The province’s In a small group, record words and images that come to mind when you hear name comes from the word Saskatchewan. When you are finished, compare your ideas with at the Saskatchewan least one other group. Think about how the ideas of students living outside River, whose name Saskatchewan might differ from those living inside the province. comes from its Cree designation: kisiska– - Video Review ciwani-sipiy, meaning Respond to the following questions as you watch the video. “swift-flowing river.” 1. Record the factors that have contributed to “Saskaboom.”

Further Research In 2005, Saskatchewan celebrated its centennial as a 2. Explain how the boom in the oil industry has affected the economy of province. A special Saskatchewan. Web site (www.cbc.ca/ sask100) was designed to present a range of material about the province.

3. Why is the oil industry booming now, given that oil was discovered over 50 years ago?

4. What specific impact is the boom having on construction and urban development?

5. Explain how the boom is having a positive and negative impact on housing in the province.

CBC News in Review • September 2008 • Page 48 6. a) What impact might “Saskaboom” have on the province’s Aboriginal population?

b) Why is this important?

Post-Viewing Activity Return to the small group you were part of at the beginning of this lesson. Re- read the notes you made in response to the word Saskatchewan. Update those words and images now that you have viewed the video. What are the major changes in your pre- and post-viewing ideas? Did you have a number of changes or not? Why do you think that was so?

CBC News in Review • September 2008 • Page 49 BOOM TIMES IN SASKATCHEWAN Portrait of a Province

The Land live in the southern half of the province, Quote with about 65 per cent of them in cities. William Francis Butler Saskatchewan became a province in was a military officer 1905. Of the 10 provinces in Canada, Of these, 202 340 live in the province’s during the first Riel Saskatchewan ranks fifth in terms largest city, Saskatoon, while 179 246 Rebellion. In his book of total land area. The most notable live in the provincial capital, Regina. The Great Lone Land geographic feature of the province is its Other major cities are Prince Albert, (1872), he described vast sweeping prairies. The beauty of Moose Jaw, Yorkton, Swift Current, and the prairie skies and the prairies is striking. So much so, that North Battleford. landscape as follows: the prairie sky was selected as one of The province has one of the largest “No ocean of water in the Seven Wonders of Canada in a CBC Aboriginal and Métis populations in the the world can vie with contest in 2007. But it is also a province country, currently accounting for about its gorgeous sunsets; 15 per cent of the province’s residents. no solitude can equal with beautiful forests and a number of the loneliness of major lakes and rivers, including the By the year 2050, that percentage is a night-shadowed Athabaska, Churchill, and Saskatchewan expected to climb to about 33 per cent. prairie: one feels the Assiniboine. Many of the rest of the province’s stillness, and hears the residents are the sons and daughters of silence, the wail of the The Weather pioneers who moved to Saskatchewan prowling wolf makes decades ago to farm the land. These the voice of solitude Saskatchewan experiences some of audible, the stars the most extreme weather in Canada. groups included many Eastern European look down through Residents often have to endure immigrants, including Ukrainians, infinite silence upon temperatures that drop to minus 50 Germans, Irish, and Scots. Like other a silence almost as degrees Celsius in winter and peak at 40 parts of Canada, Saskatchewan is intense. . . . One saw degrees Celsius in summer. The province now home to a diverse, multicultural here the world as it experiences torrential rain and flooding, population. had taken shape and form from the hands drought, lightning storms, hail, dust of the Creator. Nor storms, blizzards, and tornadoes in the The Government did the scene look summer. The Saskatchewan provincial less beautiful because In fact, the worst cyclone in Canada’s legislature has 58 members. The nature alone tilled history struck Regina on June 30, 1912. present government is formed by the the earth, and the The funnel cloud was more than 400 Saskatchewan Party, which holds 38 unaided sun brought seats in the legislature. The remaining forth the flowers.” metres wide and obliterated everything — “Seven Wonders it touched. Houses, churches, and office 20 seats are held by the New Democratic of Canada”(www. buildings were destroyed, and trains Party. cbc.ca/sevenwonders/ were pulled from their tracks. Twenty- Politically, the province is wonder_prairie_skies. eight people were killed by the cyclone, characterized by a dramatic urban-rural html#didyouknow) and hundreds were injured. Over 500 split: the federal and provincial New buildings were destroyed, and the total Democratic parties dominate in the damage amounted to $4-million (1912 cities, while the Saskatchewan Party and dollars). the federal Conservatives are stronger in the rural parts of the province. The People On November 7, 2007, the people of Saskatchewan is Canada’s sixth most Saskatchewan elected the Saskatchewan populous province, with a population of Party and made its leader, Brad Wall, about one million people. Most people the province’s 14th premier. Only 43

CBC News in Review • September 2008 • Page 50 years old, Wall was born and raised in demand for food crops fluctuated, Further Research Swift Current. Before entering politics and extreme weather wiped out some Visit the Web sites of the Saskatchewan he owned and operated two businesses. planting and harvesting seasons government at www. Many observers believe that because altogether. But more recently, the gov.sk.ca and Tourism of his business background he will economy has diversified. Saskatchewan Saskatchewan at be able to do a good job managing is a major player in the oil industry and www.sasktourism.com Saskatchewan’s economic boom. is the world leader in uranium and potash to learn more about exports. The province is the nation’s the province. The Economy second highest producer of beef cattle Agriculture has been the foundation of and has become a force in the mining the province’s economy for decades, industry. resulting in boom and bust years, as

Activity Arrange yourselves into small groups or four of five students. Imagine that you work in the Saskatchewan tourism industry. What aspects of the province would you feature in promotional material to get people to visit the province? Record these aspects, and if you have time, create a sample brochure or Web page that highlights the features you selected.

CBC News in Review • September 2008 • Page 51 BOOM TIMES IN SASKATCHEWAN Food Production

One of the key elements driving consume more meat. When more meat is Did you know . . . “Saskaboom” is the increased demand eaten, more animals have to be produced Saskatchewan farmers had so many lean for wheat, corn, canola, and other food for market. Animals bred for human years that the province crops. Saskatchewan is the country’s consumption are fed large amounts of was often termed largest producer of wheat, and is often grain so that they grow quickly. As the “next year country” referred to as “the breadbasket of the demand for meat rises, more forests and for a brighter future world” because of the key role it plays in grasslands have to be cleared to create that never seemed to providing wheat and other crops not only grazing land for animals. This means that come. to Canada but globally. Farmers try to there is increased pressure on existing produce higher yields of crops from their farms to grow more grain. Quote existing farmland and, as a result, need “I spent two years the help of mineral fertilizers. Fertilizers Biofuel Production travelling around rural can increase yield production by about As the world becomes increasingly India and I watched 30 per cent. One of the ingredients concerned with climate change, people how people were necessary in fertilizer is potassium (or are looking at alternatives like biofuel adding dairy food potash). Saskatchewan happens to be to reduce the world’s dependence on and meat to their the world’s leading producer of potash oil. Biofuels are produced from crops diet. And I came back and said, ‘the real and therefore plays a critical role in the such as corn. As an increasing number shortage out there production of food for Canada and the of crops are being diverted to make isn’t oil anymore. The world. biofuel, there is an increased demand for real shortage is food.’” crops like corn and other cereal grains. — Donald Coxe, global Growing Demand for Food Crops Although many people are now starting portfolio strategist for Canadian farmers produce much of to challenge the movement to biofuels, it the Bank of is currently big business. Some industry (The Globe and Mail, the world’s wheat and cereal grains. January 4, 2008) Globally there is increased demand for analysts estimate that 30 to 50 per cent these grains and, as a result, their value of corn produced in the United States is has skyrocketed. This has resulted in being diverted into ethanol production. a cash windfall for most large-scale farmers. For the first time in decades, Bad Weather Canadian farmers are making big profits Another reason there has been an and are able to reinvest money in their increased demand for wheat and other farms and equipment. This has also grains is that bad weather wiped out resulted in a boom for companies that crops in many parts of the world in 2007. make agricultural equipment, seeds, and For example, Bangladesh was hit by a fertilizer. cyclone and serious flooding that resulted There are a number of reasons for the in the loss of most of the country’s food increased demand for grains: stocks. A significant drought in Australia led to the loss of a great deal of wheat. Booming Economies of India and Flooding in many parts of West Africa China resulted in destroyed and rotted crops. As the economies of India and China continue to develop, more and more Potash citizens are becoming wealthy. These To grow food crops, soil must have citizens consume more food than those a good balance of three mineral who have less money, and, in particular, ingredients: nitrogen (N), phosphate

CBC News in Review • September 2008 • Page 52 (P), and potassium—also known as This is where Saskatchewan comes Did you know . . . potash (K). Most of the potassium in in. Saskatchewan contains the world’s China actually grows six crops in one year any given crop is in its straw, or residue. largest deposits of potash. Potash is a and is currently But in many parts of the world, Asia in potassium-rich salt that is mined from experimenting with particular, two or three crops a year are underground deposits left behind when the possibility of harvested. Farmers must remove all of giant seas evaporated millions of years squeezing eight crops the crop residue immediately to make ago. Potassium is essential for all plant, out of one season. way for the new crop. In some cases, a animal, and human life. Applied as This type of intensive new crop is planted the same day the old potassium chloride, potash strengthens farming requires a huge amount of one is harvested. plants and aids in water retention, potash and other This type of intensive farming results improving yields, disease resistance, and nutrients to enrich the in a decline in the nutrients of the transportability. soil. soil. In some places you can add little Potash is a limited resource; there bits of potash to enrich the soil, but in just isn’t that much of it. This makes other areas where crops such as sugar it an incredibly valuable resource. Quote cane, rice, corn, cotton, and palm oil Saskatchewan has an excellent “Potash has a are grown, farmers need to use large infrastructure and has easy access by rail 1 000-year supply in the ground in amounts of potash to ensure a successful to the mid-continental United States, the Saskatchewan, and it yield. When proper amounts of fertilizer world’s largest market for potash. All has more than 70 per are used, crop yields increase by at least indicators point to an increased demand cent of the world’s 30 per cent. for potash in the future, so it likely will unused capacity.” — remain an incredibly profitable resource. Paul D’Amico, analyst for TD Newcrest (The Globe and Mail, Follow-up January 4, 2008) 1. Explain why there is a growing demand for wheat and other food crops throughout the world.

2. If you had $1 000 to invest in the stock market, would you want to invest in wheat or potash? Explain your choice.

CBC News in Review • September 2008 • Page 53 BOOM TIMES IN SASKATCHEWAN Energy Production

Another key element driving the boom of radioactive waste in northern Quote in Saskatchewan is the world’s growing Saskatchewan. (Source: The Green “Saskatchewan Premier Brad Wall, demand for energy. Saskatchewan is the Party of Saskatchewan Web site at who was elected world’s leading producer of uranium and www.gogreenregina.com/Nuclear_ last November, has Canada’s second biggest producer of oil, Connections.html) The Green Party frequently said resulting in an economic windfall for the warns that this waste is leaching into Saskatchewan and its province. lakes and rivers, contaminating fish and vast supply of uranium wildlife and northern native lands. The could be to nuclear Green Party estimates that the toxic power what Saudi Uranium Arabia was to oil.” In Canada, most of us are used to having wastes that result from uranium mining — Jennifer Graham electricity available at any hour, any will remain dangerous for 300 000 years. (Canadian Press, June day of the year. But in many parts of 17, 2008) the world, citizens only have access to Oil electricity for part of the day. In other Oil has been called “black gold” for a parts of the world, factories are shut long time now. The world’s dependence down one day a week because there isn’t on oil continues, despite concerns about enough electricity to power them. These climate change. Although some experts countries want to continue to expand predict the world’s supply of oil will industrially and economically, so they be all but exhausted in 40 years, the need more electricity. For many of these developed world has been reluctant to countries, nuclear power is often the only make serious changes in energy use and option for electricity. continues its love affair with the car. Currently, more than 400 nuclear Because many people in the developing power plants are in operation throughout world want what those in developed the world. These plants require uranium nations already have, it is expected to produce energy, and Saskatchewan that the demand for oil will continue to is the leading producer of uranium in increase, rather than decrease, ensuring the world. As the demand for electricity that oil will be a serious source of grows, profits for the Saskatchewan revenue for those places that have it. uranium industry grow too. In Canada, talk of oil tends to focus Currently about half the uranium being on the province of Alberta (although oil used in nuclear power plants comes from off the coast of Newfoundland is starting mined uranium. The other half comes to bring economic advantages to that from nuclear weapons stockpiles. When province). To date, Alberta has made the the supply of uranium from more than greatest fortune from its oil reserves. 10 000 nuclear warheads dries up, Canadians from across the nation have the world will look to places like flocked there for jobs. And although the Saskatchewan for its supply. scope and speed of the development Some critics are concerned about of Alberta’s oil sands have set off the environmental impact of the alarm bells, production continues at an Saskatchewan uranium mining industry. astonishing pace. The Green Party of Saskatchewan, But now there is a new player on for example, states that uranium the scene: Saskatchewan. Although mining has resulted in the production oil was found in the province 50 years of at least 40 million metric tonnes ago, at that time the easy crude was

CBC News in Review • September 2008 • Page 54 extracted and the rest was left behind. As oil production has increased, so has The remaining oil was considered to be the rest of the economy. Workers flock too difficult to reach. But technology to the province to land jobs in the oil has changed, and energy companies industry. New homes are constructed to have returned to the province to drill accommodate the workers. The workers down and sideways to extract the oil spend money on everything from food left behind. Scott Skatsburg, the CEO and home furnishings to cars. The spin- of Crescent Point Energy, estimates that off impact on the provincial economy is $10-billion will be spent extracting the huge. With oil having hit $100 a barrel remaining oil. on the world market, profits are expected to continue to flow. Follow-up In small groups, imagine that you work for an urban planning department in Saskatchewan. You are seeing people flock to the province for jobs in the energy sector. Outline the steps you will take to accommodate these workers. What will they need from the local economy? What changes might need to be made in your province’s infrastructure (e.g., roads)? What controls might you want to put on urban development, if any (e.g. for every new road built, a bike path must be built)? Be prepared to share your final report with your classmates.

CBC News in Review • September 2008 • Page 55 BOOM TIMES IN SASKATCHEWAN The Great Equalization Debate

With its recent economic boom, Equalization payments have generally Further Research Saskatchewan has moved from being been criticized by leaders and residents To learn more about the details of the a “have not” to a “have” province in of the wealthy provinces. The premiers Equalization Program Canada. This means that the province no of oil-rich Alberta, and Ontario, with and federal transfers longer receives equalization payments its large manufacturing and service to provinces, visit the from the federal government. sectors, have criticized a perceived drain Ministry of Finance on local finances. Money is collected Web site at www.fin. What is Equalization? for equalization payments by federal gc.ca. Simply put, equalization is one of five taxation and is collected regardless of federal programs through which whether or not the province is a “have” transfers money to the provinces and or “have not” province. The difference territories to try to ensure that every is whether the provincial government province has roughly the same capacity receives money from the federal treasury. to pay for basic public services. The Residents of Alberta and Ontario are not equalization program is worth about necessarily taxed more by the federal $12-billion. The value of all five federal government. However, since those transfer programs in 2007 was just over provincial governments receive fewer $51-billion. All provinces, except for total dollars per capita from the federal Ontario, have received equalization government than “have not” provinces, payments in the past. they are required to collect more taxes from their residents than otherwise The History of Equalization would be required if the equalization Equalization payments in some form program did not exist. have been around since Canadian Normally, under the equalization Confederation, when the federal scheme, equalization payments are government had most of the taxation reduced a dollar for every dollar increase powers. The federal government made in a province’s treasury. Under the transfer payments to the provinces to current formula, a “have not” province cover their needs. A formal system of loses a dollar in equalization for every equalization payments was introduced dollar it makes from royalties off the in 1957, mainly to help the struggling sale of its natural resources, therefore Atlantic provinces, which were seeing creating a disincentive for developing low rates of growth and high rates of those resources. emigration to Central Canada. Analysis 1. If a province loses one dollar for every dollar it makes from the sale of its natural resources, why should provinces bother to develop their resources? What advantages, if any, can the province gain from economic development if it results in reduced equalization payments? 2. Some economists argue that equalization payments are similar to welfare payments made to individual citizens. Why might this statement bother “have not” provinces? 3. What would happen if we did not have equalization payments in Canada? 4. Is your province a “have” or a “have not” province? Why?

CBC News in Review • September 2008 • Page 56 BOOM TIMES IN SASKATCHEWAN Activity: Pros and Cons of a Boom

She certainly never thought she would be homeless. Saskatoon resident Laura Further Research Berube had run a small business for years. But when her business went bankrupt To learn more about she decided to return to school. While she was in school, rents started rising the Quint program, all over the city because of the economic boom. Her rent jumped by $200. As a consider a visit to student living on student loans, the single mother simply couldn’t afford to pay www.quintsaskatoon. her rent anymore. She and her daughters found themselves homeless. ca. The program is termed Quint, Berube was one of the lucky ones, however. She had family in the area, and she meaning “five” in and her daughters were able to move from home to home for about six months Latin, because it while she finished school. But it was a hard way to live, and there was a great represents the five communities of deal of instability in their lives. Berube felt like she was a bad mom, even though Caswell Hill, King she knew that returning to school was the best way to secure the family’s future. George, Pleasant Hill, Riversdale, and Berube was able to move her family into a home because of a government Westmount. program called Quint. Quint buys run-down houses and resells them, arranging low-cost mortgages for people who couldn’t normally afford to buy. But the economic boom in the province has put a great deal of pressure on the Quint program. The program used to buy and resell 20 affordable houses a year. But it has been unable to secure a home for the last 18 months because of the skyrocketing price of homes in the province.

Activity In small groups, copy an organizer like the one below into your notebooks. For each of the categories, record two or three positive impacts of the economic boom and two or three negative impacts of the boom. You may want to review this News in Review story again, or conduct additional research, to help you complete your organizer.

Category Positive Impacts Negative Impacts Construction industry

Employment rates

Personal income

Real estate

Poverty and homelessness The environment

Roads and infrastructure

CBC News in Review • September 2008 • Page 57