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Saskatchewan’s economy expected to take a hit as airlines leave the province

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Saskatchewan’s air transportation system is in turmoil and the province is predicting it will have a negative effect on the province’s visitor economy as 2023 begins.

“The visitor economy fuels all aspects of our economy,” said CEO of Discover Saskatoon Stephanie Clovechok. “That Calgary connectivity is significant.”

Fewer flights mean less business happening in Saskatchewan, and with Air Canada and Sunwing cancelling flights, the province will take a hit to certain industries.

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“Most of these decisions, particularly with Air Canada, are not made anywhere near Saskatchewan. They’re going to be made in Toronto, Ottawa and Montreal, those kinds of regions. And, you know, we’re not really on their radar,” said Jason Childs, associate professor of economics at the University of Regina.

Air Canada’s last flight between the province and Calgary will happen next week.

The cancellations came after decisions by Air Canada to focus on its main hubs of Vancouver, Montreal and Toronto.

“We are the food, fuel and fertilizer that the world needs. Our community and elective officials really have to take into consideration the impacts that the lack of connectivity is going to have on the continued strength and momentum of our economy,” said Clovechok.

Ken Coates, public policy professor, said Saskatchewan’s employment rates are in a great place right now with the mining industry bringing in workers from out of province.

Saskatchewan currently has a 4.1 per cent unemployment rate, according to Statistics Canada.

In 2023, Saskatchewan had two major business conventions planned with upwards of 400 people each that have been cancelled due to the lack of access to the province.

“These are the people that take commercial flights, that travel on a regular basis that are propping up our regular economy,” Coates said, adding that less visitation will affect the success of local restaurants, entertainment services and tourism attractions.

Coates said the airline cancellations are nothing short of neglect for the province.

“It really brings the idea of Canada being a national enterprise where our national institutions look at the country as a whole.

“This kind of stuff hurts your reputation, it hurts your confidence, and it hurts your sense of belonging.”

The loss of direct flights with Air Canada means passengers will have to start booking indirect flights and shelling out more money.

“Just because the economy as a whole is booming doesn’t mean that every industry is, and it doesn’t mean that specific industries aren’t facing really specific challenges,” said Childs.

One of the benefits of a more open airline market in the province is the opportunity for the entry of new lower-fare airlines.

In May, Flair Airlines will be coming to the province to pick up the Saskatoon-to-Calgary route in an attempt to fill the void left by Air Canada.

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The UK labor strikes are years in the making – Vox.com

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The UK labor strikes are years in the making  Vox.com

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Bond correction coming: What an economist and an investor say about inflation – Financial Post

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Bond correction coming: What an economist and an investor say about inflation  Financial Post

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Freeland meets with provincial, territorial finance ministers in Toronto

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TORONTO — Deputy Prime Minister and Finance Minister Chrystia Freeland is hosting an in-person meeting Friday with the provincial and territorial finance ministers in Toronto to discuss issues including the current economic environment and the transition to a clean economy.

The meeting will focus on the economic situation both domestically and globally, according to a federal source with knowledge of the gathering, including discussions on how to provide incentives and supports to be competitive with the U.S.’s Inflation Reduction Act.

U.S. President Joe Biden’s Inflation Reduction Act includes electric-vehicle incentives that favour manufacturers in Canada and Mexico, as well as the U.S.

The incentives, which were already revised to include Canada and Mexico after originally focusing on the U.S., are now facing criticism from Europe about North American protectionism.

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The source, who spoke on the condition they not be named to discuss matters not yet made public said the ongoing challenges with health care in Canada will also come up at the meeting. More substantive discussions on that will be held next week when the prime minister meets with premiers on Feb. 7.

In her opening remarks, Freeland said it’s essential for Canada to have its rightful place in the transition to a clean economy, calling it one of the biggest challenges of the moment.

We are in a situation with a lot of economic uncertainty globally, said Freeland, adding that later in the day, the ministers will have a discussion with Bank of Canada governor Tiff Macklem.

“I think that conversation with the governor will be useful and important for all of us,” she said.

Despite the need to address health care challenges, Canadian jobs and the transition to a clean economy, Freeland said the government recognizes it also has to contend with real fiscal constraints.

Freeland will hold a closing news conference at 3:30 p.m. local time.

The meeting comes at a tense time for many Canadian consumers, with inflation still running hot and interest rates much higher than they were a year ago.

The Bank of Canada raised its key interest rate again last week, bringing it to 4.5 per cent, but signalled it’s taking a pause to let the impact of its aggressive hiking cycle sink in.

The economy is showing signs of slowing, but inflation was still high at 6.3 per cent in December, with food prices in particular remaining elevated year over year.

Interest rates have put a damper on the housing market, sending prices and sales downward for months on end even as the cost of renting went up in 2022.

Meanwhile, the labour market has remained strong, with the unemployment rate nearing record lows in December at five per cent.

— With files from Nojoud Al Mallees in Ottawa and James McCarten in Washington

This report by The Canadian Press was first published Feb. 3, 2023.

 

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