Governments like to brag about their role in creating economic growth.
They all do it, regardless of which political party or what level of government — municipal, provincial or national — they belong to.
Since the Second World War ended in 1945, governments have taken on responsibility for the economy — jobs, growth and managing inflation. Before that, the economy was a free-for-all.
The Saskatchewan Party boasts about its so-called achievements on the economy (as do all the rest of the reigning provincial governments and so does the federal government).
Government can set the attitude of welcoming business, even offering incentive subsidies to locate, but government has little sway in developing business unless it uses massive subsidies.
Even subsidies fail. Several years ago, the province set a goal of developing a helium gas industry, offering exploration subsidies.
Numerous companies took advantage of the subsidies.
None seem to have done well. One of the most promising just filed for creditor protection. Stock prices of others are in the pennies, reflecting financing issues.
Business prefers to locate in friendly jurisdictions. But the bottom line is the viability of location, skilled labour supply and return on investment.
Companies do invest in politically risky jurisdictions. The risk is high, offsetting the returns and outweighing risk.
The recent announcement by Federated Co-ops and AGT Foods cancelling a $2.5 billion canola-crushing renewable diesel operation in Regina seems to show just how little influence government has on business decisions.
The plant would have employed 2,500 in construction over two years with 300 full-time jobs plus indirect jobs in transportation and retail among others.
The Sask. Party balloon-boast in investment seemed to have burst.
Pure economics caused the cancellation. Seems to have burst.
The project was cancelled just days after the federal government approved takeover of Viterra's grain operations by Dutch-based Bunge. Bunge is a world leader in grain commodities.
The deal breaker here was the new field in canola crushing with the takeover of Viterra, the former Saskatchewan Wheat Pool.
Bunge has just expanded a canola crushing plant in Altona, Man. near the U.S. border.
Viterra has half completed a huge canola-crushing plant in Regina. Richardson recently built the world's largest canola-crushing plant in Yorkton.
Adding that to Cargill's plant and others creates a possibility of some smaller older crushers closing.
The west has 11.5 million tonnes of annual crushing with an 18 million tonne harvest every year. That set the stage for higher prices to the FCL/AGT plant.
Cancelling another plant competing with many existing operations was a no-brainer.
The Saskatchewan government is notable for not opposing, even not commenting, on the Bunge takeover of Viterra.
The government had nothing to say even though a study by some of the most respected ag economists at the University of Saskatchewan showed less competition from the deal would cost farmers $800 million a year.
That $800 million isn't exactly chicken feed amounting to about $35,000 for every Saskatchewan canola farmer. Opposing the takeover is one action the province could have taken to reduce harm to the farmers.
