Future depends on demographics
The Leader-Post (Regina)
Fri 28 Sep 2007
Page: D2

Section: Business & Agriculture
Byline: Bruce Johnstone
Source:
Leader-Post

Despite the recent increase in population, Saskatchewan
still faces formidable demographic challenges during the next 50 years,
according to the head of the C.D. Howe Institute.

Fortunately, the province is well-positioned to make the fiscal and
social-policy changes required to sustain economic growth, said Bill Robson, president
and CEO of the Toronto-based think-tank.

"If you look at the last couple of decades and you just project some of these
trends into the future, it's not a happy story,'' Robson told a largely business
audience Thursday.

"But ... you don't have to change those assumptions very much before
Saskatchewan is, in fact, (seen as) one of the best-positioned provinces to
change the demographic pressures that are coming up,'' Robson added.

Robson said the institute used two demographic scenarios to project the
province's future economic growth to the year 2055: continued out-migration
based on the average of the last five years, and zero net-out-migration.

Under the continued out-migration scenario, Saskatchewan's per capita
economic growth deteriorates from the 10-year average of about 2.5 per cent to
below 1.5 per cent during the next 50 years.

Under the no-migration scenario, per capita economic performance stays above
1.5 per cent annually during the same period, Robson said.

Similarly, under the continued out-migration scenario, the province's old age
dependency ratio -- the percentage of non-working-age adults -- increases above
the 60-per-cent level by 2055. But under the no-migration scenario, the old age
dependency ratio rises to just above 40 per cent.

Robson said the province's economic future also depends greatly on aboriginal
population, education and employment trends.

Based on the two demographic scenarios, the aboriginal share of the
population will range anywhere between one-quarter and one-third of the total
population by 2055.

If aboriginal workforce participation rates and income levels continue to
remain below that of the non-aboriginal population, Robson said per capita
provincial economic growth could average closer to one per cent -- about half of
traditional growth rates.

However, if the average income of the aboriginal and non-aboriginal
populations were to converge, per capita provincial economic growth could be as
high as 1.75 per cent.

"If there is convergence, then the economic base of the province gets a whole
new shot in the arm ... because you have faster income growth in a growing part
of the population that is, at the moment, starting from behind.''

Robson admitted such scenarios are "easy to say, easy to model, but obviously
much more difficult to figure out how to do it.''

Tax cuts for low-income earners, programs to increase aboriginal
participation in the labour force, lower tax rates on investment and increased
spending in education and skills training could help Saskatchewan to achieve
higher rates of growth in the future, he added.

Idnumber: 200709280093
Edition: Final
Story
Type: Business
Length: 456 words