Job growth pace worries Sask. chamber: Public-sector
growth ahead of private-sector, stifling growth: Hillstead
The StarPhoenix (Saskatoon)
Tue 29 Nov 2005
Page: C9

Section: Business
Byline: David Freeman
Dateline: REGINA
Source:
Saskatchewan News Network; Regina Leader-Post

REGINA -- Although private-sector investment in the
province will grow by more than 10 per cent in 2005, the Saskatchewan Chamber of
Commerce is concerned that public-sector employment is outpacing the private
sector.

Ted Hillstead, president of the chamber, said that despite the growth in
investment, more jobs were created in the public sector, stifling private-sector
growth.

"We've identified the trend . . . and down the line as businesses don't
reinvest and recapitalize here in the province, we'll be met with . . . less and
less employment in the private sector in the long term," he said, adding the
private sector's share of employment will fall to nearly 75 per cent in 2005
from 79 per cent 10 years ago.

"We feel that between three and eight years, we're really going to feel the
effect of that," Hillstead added. "Even the investment in the private sector
right now is being masked, for the most part, by the mining sector and the oil
sector and the other sectors are lagging significantly behind, and they're the
ones that have the most employment in the province."

But the province isn't convinced that the balance between public- and
privatesector investment is out of kilter.

"Not everything public is evil," said Roy Schneider, a spokesperson for the
department of Industry and Resources. "We're not disagreeing with the chamber.
They want to grow private investment, so do we.

"(But) if we had a 50-50 split, then I think you'd have some grounds for
concern, but the numbers that I have for this year, just over 78 per cent of
total Saskatchewan investment will be private," he said. "What's the national
average? -- 81.1 per cent. So are we horribly out of alignment? I would submit
no."

Schneider added that the province is at the top of the heap in the country
when it comes to private-sector growth and economic growth, so "we must be doing
something right."

"Our private-sector investment will grow by 10.4 per cent, according to Stats
Canada this year," he said. "That represents $6.6 billion in new private-sector
investment and that is the second-highest growth rate in Canada for 2005. We are
behind only New Brunswick for growth in private-sector investment for this year.
We are ahead of Alberta. We are ahead of B.C. We are ahead of everybody else."

He added that the private-sector investment was $1.3 billion more than
Manitoba -- an economy of "comparable size" -- and up $2.5 billion over 10 years
ago in the province.

"For good measure our public-sector investment here in this province, even
though it is strong, is going to be a little less than Manitoba for 2005,"
Schneider continued. "So is there imbalance there? We would argue (no). . . .
You always want to see more private-sector investment, of course. And I think we
would not disagree with (the chamber's) central premise, that you need growth in
private sector to generate jobs and so on, but I guess our point would be: It is
growing."

Hillstead pointed to several things as limiting factors to growth in the
province, one of which was business taxation.

"With the release of the Vicq report the other day, it was quite clear that
we're not competitive in our taxing system across the country," Hillstead said.
"As Mr. Vicq put it, 'We're not even on anyone's radar screen.' We've known that
for quite a few years, so taxation's an issue."

But Schneider says a September tax competitiveness report published by the
C.D. Howe Institute put New
Brunswick, Nova Scotia and Newfoundland at the top of a list of provinces with
effective taxation -- the effect of taxation on capital investment.

"But if you look at Statistics Canada's figures on (private) investment,
those provinces will rank fifth, ninth and 10th respectively this year," he
said. "My point would be taxation is important, no question, but it's also
obviously not the only determinant in terms of what goes into a good business
environment."

Edition: Final
Story Type: Business
Length:
665 words