By Dr. Larry Rosia, president and CEO
This year’s federal Budget adheres to the logic that unprecedented amounts of new government spending and investment will spur jobs and growth. Employers from all industrial sectors, and of all sizes (SMEs or large enterprises) are seen as central agents of fueling the kind of GDP growth being forecast – in Canada’s case, 5.8% growth after months of lockdowns and circuit breakers. Equally compelling, the Budget presents a wide array of opportunities for collaboration to achieve many of the government’s ambitions for industrial innovation, green jobs, workforce development and social change.
The 2021 Canadian federal Budget can also be viewed as a “vaccine-dependent” plan for economic recovery, given that its first objective is to continue to support individuals and businesses through the continuing third wave of the pandemic. The second pillar of the Budget promises jobs and growth, with substantive spending (“investment”) and measures, largely targeted to employers and businesses and communities. Much of the new $101 billion in program spending is designed to stimulate private sector action in areas such as achieving net zero emissions, digital adoption, advanced technologies, or hiring and skills training. As well, the federal government, along with many economic experts, believe that consumers will want to spend after the recent months of deprivation and hardship (although these assessments were made prior to the prolonged third wave of the pandemic). Others have noted that the large amounts of consumer savings, along with the new stimulus spending, will trigger a strong economic recovery.
Economic recovery itself, however, may not lead us to improved productivity or sustained growth. The Budget readily admits that GDP will fall back to 2.1% in five years’ time.
While all would agree that a strong economic recovery would be welcome given the hardship the pandemic has caused, experts also advise us to prepare for potential downsides. For example, inflation is likely to become an issue, driving prices for some goods and services higher. The Bank of Canada is already signaling that interest rates are likely to rise. Equally, there are new headwinds coming for the labour force, especially for the care and essential service sectors and workers. These front-line workers have borne a heavy load through every wave of the pandemic and labour shortages are likely to affect key service industries for several years to come – think about nurses, personal support workers, meat packers, Amazon workers, to name only a few.
Other uncertainties centre on in-demand items and the supply chains that manage their distribution. One big lesson from the pandemic is the vulnerability of our supply chains. Think back to just a few months ago and the lack of items on grocery store shelves, from Lysol wipes to flour. Currently, a global shortage of semiconductor chips has slowed down critical manufacturing sectors, such as autos and electronics, making it more difficult to acquire certain vehicles, mobile phones and even televisions. As consumer demand bounces back, and as economic recovery takes off, we may encounter new shortages of inputs and consumer goods and services in areas where consumer spending had declined due to stay-at-home orders.
From a Saskatchewan perspective however, it is not all bad news. In 2020, for example, shortages of certain commodities due to high demand during the pandemic ended up benefitting Saskatchewan’s agriculture and lumber producers. According to the Saskatchewan State of Trade 2020 report by the Saskatchewan Trade and Economic Partnership (STEP), Saskatchewan was the only Canadian province to experience total export growth in 2020. Global demand for wheat, durum, canola seed, peas and lentils helped fuel a 31.4% rise in Saskatchewan agri-food exports in 2020. In fact, the value of Saskatchewan’s agricultural exports hit an all-time high in 2020, says STEP. Exports of Saskatchewan’s forest products also fared well with dimensional lumber exports increasing by 29% while oriented strand board (OSB) exports increased by 97%. This occurred despite the effects of a global health pandemic that saw the world’s total economy shrink by nearly 4.5% during the worst global downturn since World War II!
As the president and CEO of Saskatchewan’s only polytechnic, I believe polytechnics like ours will play a critical role in helping businesses, workers, and consumers, emerge from the pandemic and become even more innovative and competitive. As I consider the opportunities presented in this year’s federal Budget, Saskatchewan Polytechnic is well-positioned to help our industry partners, and employers, successfully apply for new spending in federal programs and announcements to spur and support industrial innovation, digital adoption, skills-upgrading, apprenticeships in the construction and manufacturing trades, community revitalization and net zero emissions.
Many of this year’s Budget announcements envision a collaborative approach, whereby industry leads the funding proposal, but is supported by Canada’s higher education sector, in areas such as applied research or sector workforce training. Sask Polytech excels at industry engagement, community development and talent production for employers in our province and across Canada. We have a solid track record when it comes to successfully securing public funding for projects that lead to jobs and firm-level growth. Sask Polytech is eager to put its experience to work for our private sector and community partners. It all starts with a conversation.
My question to you is this: Are we ready for the opportunities that are now open to forge or leverage partnerships for economic recovery?
Published May 2021