$12B in capital spending expected

Saskatchewan is poised to have its best year ever in capital spending, with more than $12 billion in private and public sector investment projected for 2008.

A Statistics Canada survey of capital spending intentions released Wednesday forecasts that the public and private sector investment in Saskatchewan at $12.3 billion in 2008, an 18-per-cent increase from 2007.

That's the second-highest percentage increase among the provinces, just slightly behind Manitoba at 18.8 per cent, and more than three times the national average of 5.2 per cent.

"It's the first time ever that capital spending in Saskatchewan will exceed the $12-billion mark,'' Enterprise and Innovation Minister Lyle Stewart said.

"We're pretty thrilled with that."

Stewart said the lion's share of the investment is coming from the private sector, with $10.1 billion in capital spending projected for 2008, up 20.4 per cent from 2007.

By contrast, public-sector investment is expected to increase 8.7 per cent to $2.3 billion.

Stewart said the Saskatchewan Party government is aware of the need to increase public-sector spending to keep pace with the province's economic growth.

"We're inheriting a bit of an infrastructure deficit,'' Stewart said. "It's across the board -- roads, highways, bridges, overpasses, that sort of thing.

"Those are the areas we're focused on for a start."

The survey, conducted from October 2007 to January 2008, indicated the resource extraction will account for $3.6 billion of capital spending in 2008.

Of that, the oil and gas capital spending will account for about $2 billion.

Housing-sector spending is expected to increase 11.4 per cent or $225.4 million to top $2 billion in 2008.

Transportation and warehousing capital spending is expected to hit $1.5 billion this year, up 110 per cent from about $703 million in 2007.

Manufacturing investment is also expected to double to $893 million this year from $447 million in 2007, while utilities spending is forecast to increase 40 per cent to $675.5 million.

Of the $12.3 billion in capital spending this year, construction spending is expected to reach $8.2 billion, while $4.1 billion will be spent on machinery and equipment.

While Manitoba and Saskatchewan led the country in terms of the percentage increase in projected capital spending, Alberta will also see a 3.8-per-cent increase to $83.8 billion, largely due to increased demand for office space.

In terms of absolute dollars, however, the largest increase will be in Quebec, where investment is anticipated to increase more than $4 billion, which represents 24 per cent of the increase in total investment nationally in 2008.

Growth in public investment is also driving increases in both Quebec and Ontario with an additional $1.7 billion and $1.1 billion respectively.

The oil-and-gas sector will be the largest contributor to the growth in capital investment in Newfoundland and Labrador, and British Columbia.

In absolute dollars, the oil-and-gas sector will generate an additional investment of about $508.7 million in Newfoundland and Labrador, and $1.3 billion in British Columbia.