Generates $1.51 in economic activity for every dollar spent
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FOR IMMEDIATE RELEASE:
Saskatoon, SK, September 12, 2019 – A new study reveals that in-province procurement purchases by Saskatchewan resource companies would deliver nearly four times more economic benefit to the province than purchases made from non-Saskatchewan suppliers.
According to the study, each dollar spent exclusively with local suppliers would generate $1.51 in total economic output for the province, compared to the $0.39 that would be generated by purchases from out of province suppliers.
“We always knew that purchasing from local suppliers benefitted the province,” says Rob Tebb, Chairman of the Board for the Saskatchewan Industrial and Mining Suppliers Association (SIMSA), “but now we have a more concrete idea how much more impact local spending can have on our local economy.”
Commissioned by SIMSA and performed by PricewaterhouseCoopers, the study used data from current spending patterns plus interviews with SIMSA members to compare the theoretical impact of one dollar spent by a resource company in three ways: 100 percent in-province, 100 percent out of province, and the current 63/37 (excluding utilities) local to out of province spending split.
In addition to overall economic output, the impact of spending on GDP, Jobs (FTE), Labour Income, and Total Taxes was assessed. A dollar spent with local suppliers would generate $0.86, in GDP, $0.34 in labour income, and $0.18 in tax revenue. That same dollar spent with suppliers outside Saskatchewan would return only $0.25 in GDP, $0.13 in labour income and $0.05 in tax revenue to the province.
The study also tracked the economic impact of spending for out of province resource companies on Saskatchewan suppliers, noting that every dollar spent in Saskatchewan generates $1.12 in economic impact for the province.
SIMSA economic footprint also measured
Concurrent with its study on the total impact of local spending on the province, PWC also assessed the total economic footprint1 of SIMSA’s 207 current suppliermembers based on their global and local sales.
According to the study, SIMSA members in 2018 generated:
- $15.1 billion in revenue
- $8.263 bilion in GDP
- 33,363 FTE1 jobs
- $2.1 billion in labour income
- $2.0 billion in total tax contribution
- $4.2 million in charitable giving
- $20.4 million in SaskPower purchases
Based on their sales to their Saskatchewan clients alone, SIMSA members generated a total of $3.9 billion in output, $2.1 billion in GDP, $870 million in labour income, and $529 million in total tax contribution.
“We’ve grown from 74 to 207 members over the past 3 years, thanks in large part to in-person events with Saskatchewan resource sector companies like Nutrien, BHP, Cameco, K+S, Mosaic, and Federated Co-op, plus ongoing support from Western Economic Diversification Canada, SaskBuilds, and the Ministry of Trade and Export Development,” says Eric Anderson, SIMSA’s Executive Director. “As more suppliers join us, we can contribute even more to the Saskatchewan economy.”
(1) Total economic footprint includes direct, indirect (supply chain), and induced (employee spending) impacts
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