Saskatoon Region: Q3 2023 Economic Update

The Saskatoon Region is seeing a deceleration in economic growth from 2022, shaped by economic factors and hurdles, including supply chain disruption, high-interest rates, global geopolitical uncertainties, reduced global demand, and mixed impacts on commodities.

Despite these economic headwinds, there are encouraging developments on the horizon. While mineral and crop prices have come down substantially from their 2022 highs, they continue to float above pre-pandemic levels, except for uranium, reaching a more than a decade-high. Moreover, inflation continues to ease, boding well for increased capital investments in housing, the mining industry and consumer spending.

Overall, the Saskatoon Region is forecasted to round out 2023, growing 2.8%.

Key Takeaways for Q3 2023

1. Inflationary Risk

The Bank of Canada has maintained the key rate at 5.0% and has signaled that it is likely to remain higher for longer if the economy is to have a chance to return to targeted levels. The Central Bank is projecting inflation to average 3.5% by mid-2024 before gradually easing to 2% in 2025. Inflation is expected to impact consumer spending, capital projects and business investments in the near term until late 2024.

2. Tight Housing and Real Estate

Saskatoon benchmark home prices reached a record high of $381,467 in Q3, propelled by strong demand and economic pressures in the housing market, including rapid population growth and low inventory.

High interest rates and the cost of materials have eroded the profitability of new developments, contributing to the tightest market conditions seen since 2007.

However, market conditions have improved as lumber prices have stabilized just above pre-pandemic levels at around USD 514.10, marking a 229.1% decrease from the peak of the pandemic-driven surge. Additionally, the Saskatchewan government announced bringing back a PST rebate for new home builds, boding well for the industry.

3. Mixed Commodities


Saskatchewan’s agriculture sector has faced various challenges due to persistent dry and hot weather conditions, a record number of wildfires, and a grasshopper infestation, all of which have significantly impacted crop yields.

Consequently, Saskatchewan recorded its second-lowest crop production level in over a decade. Current yield model estimates indicate a 26.9% decrease from 2022 and a 34.7% decrease from 2020. However, this year’s production is still 14.9% higher than in 2021, when production fell by 43.2% from 2020.


The impact of the Ukraine-Russia War has already influenced commodities, leading to higher prices for grains, uranium, potash, and oil. However, due to oversupply in the global oil market and dampened global demand, oil prices have decreased slightly but remain relatively high, which boasts well for government revenues.


Compared to the record levels of potash production and mineral sales in 2022, year-to-date August production has decreased by 10.3% to 8.9 million tonnes, and sales have declined by 35.2% to $7.70 billion. Potash prices have since fallen from their peak of $1,200 per tonne in April 2022 to $352. Consequently, Nutrien has decided to suspend its plans to increase potash production, reduce its capital expenditure, and revise its profit forecast.

Despite the extended downturn in the global fertilizer market, BHP Canada has announced a substantial $6.4 billion investment in the second stage of its Jansen potash mine project, highlighting the anticipation of long-term rising demand for potash.

Meanwhile, in the same period, uranium production has surged 51.1% to 7,615.9 tonnes and sales by 66.0% to $1.02 billion. Uranium spot prices have hit a decade-plus high of $74.38 as of October 31, driven by the growing global demand for clean, secure, and cost-effective nuclear energy. However, global geopolitical uncertainties from the Ukraine-Russia War and a coup in Niger have intensified supply concerns, posing production challenges for industry operators, making the market vulnerable to future disruptions and price volatility.

4. Supply Chain Disruption

As a landlocked province, Saskatchewan heavily relies on the St. Lawrence Seaway and the Vancouver Port for exporting goods and commodities. In July, the B.C Port Strike, lasting 13 days, disrupted supply chains, affecting potash production, grain shipments and overall exports.

The St. Lawrence Seaway Strike, which occurred from October 22 to October 30, further exacerbated the challenges faced by Saskatchewan producers, leading to delays in shipping and increased costs. With Saskatchewan’s economy closely tied to the global market, such disruptions hinder the province’s economic growth and the bottom lines of businesses.

This impact is evident in the latest earnings reports from CN Rail and CPKC, recording a decline in volume at the ports of Vancouver and Prince Rupert. And while the strike lasted 12 days, the repercussions rolled into August and September and may persist in the medium term.

Looking Ahead

The Saskatoon Region is navigating a more disruptive economy than ever, pinpointing the strengths and vulnerabilities in the economy. Addressing inflationary pressures, housing affordability and supply, supply chain resilience, and the shifting demands of consumers and businesses will be more prominent in the coming quarters.

The housing and real estate market has witnessed robust demand, and although it has slowed down, there are expectations for a resurgence in 2024.

Farm Credit Canada expects fertilizer prices to remain under pressure into next year but recover when seeding approaches, pointing to an improved market outlook for both potash and fertilizer. On the other hand, the uranium industry is experiencing high demand and prices as the world continues to support clean energy, further supporting future uranium supply.

On the oil front, global geopolitical factors have the potential to impact current prices, including the Israel-Hamas War, as any significant acceleration to the situation could disrupt global oil supplies. In addition, demand is waning in the U.S. and China; however, Russia and Saudia Arabia may voluntarily extend supply cuts into the new year, leading to lower and higher prices, respectively.

In 2024, the Saskatoon Region is forecasted to lead the province in economic growth, growing 1.9%.

Tyler Nguyen

Manager, Economic Intelligence
(306) 952-2400