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Monday Morning Commentary

Rick Swenson

As we all know, spring is a time of hope, renewal and new growth. These are all things we look forward to after a long, cold winter in Saskatchewan. This also brings an event which is very unique to Saskatchewan – an event that tells us a lot about what is going on in our province. No I am not talking about a new crop or a new way of doing things – I am talking about the release of the annual reports of all of our Crown Corporations.

There is no where in Canada or even North America where you have so much of our economy and our basic services controlled by government in our case called Crown Corporations. How these Crowns fair financially has a lot to do with our cost of living and indeed how large parts of our economy either succeed or fail. They have always been a contentious issue since their creation many years ago.

This spring we have seen all of them asking for heavy rate increases not over just one year but in most cases, for many years to come. That means the cost of lighting and heating our homes and businesses will be going up. Our automobile and home insurance will be going up and that means that as consumers, we will be making choices about how we spend our money in the future. It also tells us if we look past the initial government spin, how our government will be spending our money in the future and how the government of Saskatchewan will be planning to balance its books.

Obviously there is much to comment on but today I would like to single out SaskPower because I think this crown corporation’s annual report is the one that shows a couple of things about the Sask Party government, its performance and its failed industrial strategy. SaskPower is asking for 5% increases in the rates that it charges its customers for at least the next three years. This is a pretty dramatic set of increases for a company that is a monopoly in the entire province and does not have the disciplines that are enforced by a competitive marketplace.

It is a company that has also been one of the largest providers of dividends to the Sask Party government as they were trying to maintain the façade of balanced budgets. SaskPower’s annual report points out to us that this has resulted in their debt-to-equity ratio climbing very dramatically and that there will be no dividends in the near future because of the liabilities they have undertaken. In other words, SaskPower has not been putting aside enough of its earnings to maintain and grow its infrastructure because government has been taking too much of their earnings. A private sector company would not survive for very long running its business like this.

This way of doing business points out to me two things about the Sask Party government and it to a certain degree the NDP ones before it. Number one – the elephant in the room for the Sask Party is the Premier’s obsession with clean coal technology and the huge money-guzzling project at the Boundary Power station at Estevan. SaskPower is caught between a rock and a hard place on this one where they are into the glue for over $1.2 billion and counting on only one unit of Saskatchewan’s largest power plant. SaskPower’s annual report tells me that there will be very hard choices made internally in that crown corporation which will negate many other initiatives in order to fund one of the Premier’s legacy projects.

Number two was a decision by the Calvert government to not go along with the proposed co-generation plant which would have been attached to Weyerhaeuser’s pulp and paper operation at Prince Albert. The combining of large co-generation plants with large industrial enterprises is something I believe is a natural fit for Saskatchewan. There is a good chance that by having electricity to sell into the Saskatchewan grid that Weyerhaeuser’s paper plant would have been profitable enough to keep its doors open. The huge amounts of natural gas that is available in the Western Canadian Sedimentary Basin means that the options for providing clean and efficient energy are way greater than anyone thought was previously available.

It has been shown in Saskatchewan that we can manufacture fertilizer on a profitable basis. It has been shown that we can upgrade and refine oil on a profitable basis. The market is telling us that we are short of both of these products and others and that Saskatchewan is often a price taker not a price setter in commodities that are crucial to our economic well being.

These types of industrial enterprises provide large numbers of high-paying stable jobs over generations. This type of enterprise is also a large producer and user of steam. Steam is what drives turbines in power plants. It doesn’t matter what methods you use to heat the water whether it be coal, natural gas or atomic power. The end result is that they all produce large quantities of high-pressure steam that drives turbines - turbines that produce electricity for all of us.

The NDP obviously had a philosophical opposition to allowing private sector providers of electricity into the SaskPower grid unless the government had total control of it. The Sask Party government seems to be going down the same route with its obsession with Saskatchewan’s dirty coal reserves. It is time for a totally different look at Saskatchewan’s power generation requirements and the opportunities that could come out of that for a different industrial strategy. I believe Saskatchewan can be the place to manufacture, to value-add our resources and to protect our environment with cleaner energy but it will require a totally different focus from the politicians. I think now more than ever this calls for the PC Party of Saskatchewan to be part of the options for how we govern ourselves and provide the basis of our energy needs.
Your feedback is welcome on anything you see in the Monday Morning Commentary. Please send your comments to contact @pcsask.ca. If you know of anyone that would be interested in receiving this by email, please forward me their email address. Also – don’t forget to check out our website at pcsask.ca.

These issues must be debated for “The Right Reasons”.

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