Cover Story

The Future’s So Bright: Saskatchewan’s New Economic Drivers

As the province looks to the future, there are new economic drivers appearing on the horizon that offer new opportunities in established sectors—mining, agriculture and energy—and to our emerging tech sector. Saskatchewan is standing on the precipice of new economic growth that can change the future, but we have to act fast. These drivers are growing in other places around the world, and this is no time to let anyone else eat our proverbial lunch. Let’s take a look at four of these opportunities—plant protein, critical minerals, agtech and clean energy—and what they offer our humble province and what we need to do to make it all come together.

Plant a Seed

In April 2021, Protein Industries Canada (PIC) celebrated the two-year anniversary of its official launch, and in that time has worked to build a national plant protein industry to deliver what the world is demanding. Since PIC’s launch, it has approved 20 technology projects, five capacity building projects and committed nearly 90 per cent of its initial funding tranche.1 To date, PIC has been involved in the creation at least 800 new jobs, 200 new products, 77 new processes and 44 new pieces of intellectual property.2

However, PIC has also learned that this work is just the beginning—and there is so much more work ahead, especially if Canada (and Saskatchewan) want to fully embrace the opportunity plant protein is presenting. PIC commissioned a report from Ernst and Young to evaluate Canada’s potential in five key areas: market access; sustainable production practices; agricultural land base and crop production strength; food safety and quality; and research, talent and agri-food clusters. As details are released, the overall picture developing is astonishing. In short, Canada is on the verge of a once-in-a-generation economic opportunity that is also tailor-made for Saskatchewan’s agriculture sector.

Green Shoots

“We undertook the report to better understand the opportunities in plant protein, and how we can position Canada as a leader,” says Bill Greuel, CEO of PIC. The report looks ahead 15 years to 2035, and the first look shows that the opportunity in plant protein is impressive. “The market for plant-based foods is growing rapidly, and subsectors in plant protein are emerging, such as alternative seafood and milks. If we look at just alternative meats as a proxy, we’re seeing predictions of a global market worth $180 billion CDN by 2035. If we add in alternative eggs, dairy, beverages and fortification for the baking industry, that number easily grows to $250 billion CDN.” With Saskatchewan’s ability to grow plant proteins, the potential these numbers indicate is staggering.

Our largest protein crop is canola, which has excellent potential for use in many foods. “Canola has a good amino acid balance and offers significant opportunity for use in alternative meats and beverages as a part of new novel foods,” says Greuel. “We’re already seeing its use by Manitoba’s Merit Functional Foods, which at the moment is marketing canola-based high-protein ingredients for use in plant-based foods.” This indicates that Saskatchewan has major potential in this space. As well, it shows there is also considerable opportunity for lentils, chickpeas, yellow peas, and hemp, which today are seen as whole foods. With fractionation—processing to extract proteins, starches and fibres—these ingredients, like canola, offer unique applications in the emerging plant-based foods market.

Pass the Test

However, there are some things that need to be addressed before we can start cashing cheques. The first hurdle is the capital intensity of the industry, and the infrastructure required to handle the value-added processing needed to get plant proteins into patties, milks and more. Greuel points to what is needed to get facilities online to process a significant portion of the 90 million metric tons of crop produced annually in Canada. To build a processing facility, you need an appropriate greenfield location, good access to reliable utilities, regulatory approvals, and capital—lots of it. “We’re talking upwards of $10-12 billion of capital required for Canada to produce enough ingredients to become a major global player in plant-based foods, feeds and ingredients,” he says. “However, once facilities are built, they’re built for 50 years. We are finding that companies in this space have great intellectual property, but they need to construct a processing facility before they can generate significant revenue. That doesn’t fit the model for a lot of venture capital providers. We need to find new ways to support the capital requirements of this growing sector.”

Even if capital is in place, facilities still need a place to set up shop. Utilities and access to transportation are hurdles to overcome in many jurisdictions. For every Roquette—the world’s largest pea processing facility now operational at Portage La Prairie, Man.—there are other projects under development that are waiting on permits and utilities infrastructure. “While we have access to the raw materials, processors need a place to build. Appropriate greenfield siting, affordable access to energy and potable water, and links to reliable transportation remain issues,” says Greuel. Governments and municipalities need to do more to improve infrastructure links and construction approvals to attract processing facilities that will bring major economic activity. “Companies cannot wait for extended periods of time for approvals.” says Greuel. Instead, projects will move onto places that are wiling to do what it takes to get things moving.

The other issue holding back growth is the current regulatory environment when it comes to novel food products (novel foods are food products that are new or changed compared to existing foods, according to the Government of Canada). “Currently, it takes 410 days for the federal government to determine whether a proposed food product is novel or not. That is not finding if the food is safe, just whether it is novel or not. Compare that to 100 days in the United States. This process takes way too long,” says Greuel. The length of time for regulatory approvals hinders potential, especially when other jurisdictions are moving faster with products grown in Canada. “Canola protein grown and processed in Canada is now moving to the U.S. for use in finished food products, instead of it happening here,” says Greuel. “We’re not saying to eliminate regulations to keep people safe. We’re simply saying that agile regulations and appropriate staffing to speed approvals will help ensure we’re not seeing economic potential move elsewhere, like the U.S. Midwest.”

Rise to the Occasion

Despite the challenges in capital, infrastructure and regulatory processes, plant protein is offering the Saskatchewan agriculture sector a shot in the arm that can not only revolutionize what we grow, but how we use it. Instead of simply growing and shipping out, plant protein can also attract more of the lucrative value-added processing the province has been trying to cultivate for decades. “We need to address the industry’s challenges to fully realize the potential here,” says Greuel. “Building an environment that creates large-scale private sector buy-in is key to Saskatchewan’s long-term success in plant protein.”

Mission Critical

As technologies such as electric vehicles expand and the transition to low-carbon energy sources grows around the world, so does the demand for metal and minerals—especially those referred to as “critical minerals.” Critical minerals are vital to many industries, including telecommunications, computing and clean energy.3 While the mining and minerals industry already plays a major role in our economy, critical minerals represent a major new opportunity for Saskatchewan and Canada. Not only are critical minerals a valuable export commodity, but they are also integral to Canada’s own technology manufacturing industry and our supply chain.4 In fact, the demand for critical minerals is so essential to the world economy that access to their supply is considered a national security issue.5

On March 11, 2021, the federal government announced its list of 31 critical minerals6, established after work with the United States on the Canada-U.S. Joint Action Plan on Critical Minerals.7 Following that announcement, the 2021 Federal Budget included $9.6 million over three years to develop a Critical Battery Minerals Centre of Excellence to work on federal policies and programs for critical minerals, and implement Canada-U.S. Joint Action Plan, as well as $36.8 million for federal research into critical battery mineral processing and refining.8

Vital Statistics

While Canada is home to critical minerals, China leads the world in production for many of these “modern economy” minerals. For example, China produces 33.7 per cent of the world’s zinc and 60 per cent of the world’s rare earth elements.9 However, Canada has some of the largest reserves of rare earth elements in the world, estimated at over 15 million tonnes.10 Canada is also an important supplier for 13 of the 35 U.S critical minerals,11 and the only Western nation with abundant cobalt, graphite, lithum and nickel which are vital to the growing battery and electric vehicle sectors.12

Finding Our Place

As Canada asserts itself in the critical mineral marketplace and positions the country as a stable and secure source for these sought-after commodities, Saskatchewan finds itself in an exceptional position in the critical mineral industry. Not only did Saskatchewan have $7.4 billion CDN in mineral sales in 2019, but according to the Government of Saskatchewan, the province has occurrences of 22 of the 31 Canadian critical minerals: cobalt, copper, fluorspar, gallium, graphite (natural), helium, lithium, magnesium, manganese, molybdenum, nickel, niobium, platinum group metals, potash, rare earth elements, scandium, tantalum, titanium, tungsten, uranium, vanadium, and zinc. The Government of Saskatchewan’s Growth Plan not only set 2030 targets for $9 billion in potash sales and $2 billion in uranium sales, but it also makes mention of strategic metal as an opportunity for the mining sector.13

Buried Treasure

Our mineral-rich geography is opening new doors for our already well-established mining industry, and there are many moves being made to capitalize on what else lies beneath the surface of our province. Lithium production began in July 2020 with a joint-venture pilot project between Prairie Lithium Corp. and LiEP Energy Ltd. in southern Saskatchewan.14 The Saskatchewan Research Council announced plans for a Saskatoon-based rare earths processing facility—a first-of-its-kind in North America—in August 2020, with plans to come online in Fall 2022.15

In September 2020, Appia Energy Corp. released news that their Alces Lake project near Uranium City, Sask., had confirmed deposits of rare earth elements,16 and in March 2021 confirmed high-grade gallium in all zones of the Alces Lake property.17 Rockridge Resources expanded their drilling program in March at their Knife Lake Copper project, which is an advanced-stage copper, silver, zinc and cobalt exploration property northwest of Flin Flon.18

Royal Helium Ltd. holds more than 400,000 hectares of helium lands in the province and is currently focused on drilling projects at Climax and Bengough, Sask.19 In January 2021, the company announced it had commenced drilling at Climax, and confirmed economic helium concentrations at the site on April 6, 2021.20 “We are pleased with these initial results on our Climax helium project,” said Andrew Davidson, president and CEO at Royal. “The fact that we have identified elevated and economic helium concentrations across significant pay zones as large as 30 meters speaks to the potential of the Climax Project.”

On April 22, 2021, Foran Mining Corporation announced that its McIlvenna Bay deposit near Flin Flon will become the world’s first carbon neutral copper development project.21 McIlvenna Bay is a copper-zinc-gold-silver Volcanogenic Massive Sulphide (VMS) deposit, and VMS deposits are among the richest sources for copper, zinc and lead in the world. “Copper and zinc are essential products that are needed for building a sustainable future such as solar and wind technologies, and electric vehicles,” said Dan Myerson, executive chair at Foran, about the project. “It is imperative we find a way of producing them in a responsible way that lowers social and environmental impact while also creating greater and more sustainable returns, building value for our shareholders, stakeholders and society.”

As the need for critical minerals around the world grows, so do the opportunities for new mining in Saskatchewan. Ranked first in Canada for mining investment attractiveness by the Fraser Institute’s Annual Survey of Mining Companies in 2019, the province’s critical mineral mining sector is on the cusp of incredible opportunity and intense economic growth.22

A Sign of Things to Come

As the province’s tech sector comes into its own, attracting more venture capital and watching our first tech IPO take shape with Vendasta, agtech is showing its promise as a subsector to watch. Agtech is leading a fourth revolution in farming, transforming how we grow and produce food. Where better to embrace agtech than in one of the world’s most prolific agriculture jurisdictions?

As the world’s population grows, so does the need for food. While Canada is ranked as the fifth largest agriculture exporter on the planet, our share of global exports has dropped from 4.9 per cent in 2005 to 3.9 per cent today.23 More countries are growing more food and increasing the competition within the agriculture market. To get and stay ahead, Canada needs to embrace agtech now.

According to the RBC Economics report Farmer 4.0: How the Coming Skills Revolution can Transform Agriculture, if the country moves ahead with the adoption of new technology and skills to improve our productivity to the 10-year average of 3 per cent, we can see an another $11 billion of output bringing the country’s agricultural GDP to $51 billion by 2030.24 That is a lot of money to leave on the table. If Canada seizes innovative technology and skills, that number leaps even higher.

Current Status

According to a recent study by Calgary Economic Development, the global market size for agtech was $494.9 million U.S in 2018 and expected to become $729.5 billion by 2023.25 The same report also identified to major growth areas in agtech: smart agriculture/Internet of Things and precision farming. Both are expected to experience massive growth by 2025, with smart agriculture’s global market value hitting $15 billion US and precision agriculture reaching $12.8 billion US.26

Agtech is booming around the world, with global investment hitting $16.9 billion US in 2018.27 While Canada was in the top five for investment, our share was only 3.4 per cent—less than Brazil and India that are emerging economies grabbing more market share every year.28 Canada also lags in private investment in the sector, with just 11 per cent of agriculture R&D spending coming from private sources—compare that to 73 per cent in the United States.29 We have major room to grow when it comes capital in agtech.

To capitalize on the possibilities that agtech offers, there are challenges that must be addressed. According to Calgary Economic Development’s June 2020 Agribusiness Market Study, access to customers, early-stage funding, business supports, networks, talent and major players are critical for building momentum in the agtech sector.30 Looking around Saskatchewan, it is safe to say we have plenty of customers. The other ingredients for success—funding, supports, talent and existing ventures—are growing. However, there is plenty of room for more. Lots more.

Levelling Up

There are bright spots in the Saskatchewan agtech sector and there is much more room to grow. On April 21, 2021, the provincial government announced legislation to allow Innovation Saskatchewan to make investments in agtech startups through a new venture capital fund. Totalling $15 million over five years, the fund will also leverage private investment to scale agtech startups.31 Conexus Venture Capital Inc. will see the launch of its second venture capital fund—Emmertech—in 2021, focused on the Canadian agtech sector.

Locally, there are several agtech companies positioned for growth. Precision.AI is developing new technology to improve spraying, using drones and artificial intelligence and is now part of a $26.2 million project to develop its technology in partnership with Sure Growth Solutions Inc., Exceed Grain Marketing and the Global Institute for Food Security (GIFS) at the University of Saskatchewan.32 Acquired by Ottawa tech behemoth Calian Group in 2018, Regina’s IntraGrain Technologies offers grain monitoring and fuel storage management solutions. Founded in 2012, Saskatoon-based Agrimatics provides mobile-based technology for grain cart weighing and cloud-based software for harvest data management.

The next chapter of agtech in Saskatchewan is just beginning, and there are major plot developments coming fast. With the right mix of capital, talent, commitment and sheer will, the province can take its place as a world leader in agtech and realize the massive economic gains that come with it.

A Clean Break

If you have any doubt that clean energy is the future, consider this number—$17.6 billion.

That’s how much money the federal government committed to spending on clean energy and climate initiatives in the new 2021 federal budget. It’s all part of a plan to drastically reduce the amount of greenhouse gas pollution Canada produces every year and speed up the shift to a low-carbon economy to spur the private sector towards net-zero emissions by 2050.

Closer to home, SaskPower’s goal is to reduce the province’s greenhouse gas emissions from 2005 levels by 40 per cent by 2030. That’s just nine years from now.

The action plan is to double the percentage of renewable energy from 25 per cent of overall capacity up to 50 per cent. Wind is widely expected to play a major role. In fact, that’s where perhaps the biggest opportunity lies.
According to SaskPower, just five per cent of its generating capacity can also help fly a kite. The bulk of it is in natural gas (40 per cent), coal (34 per cent) and hydro (20 per cent).

It’s important to note that Saskatchewan will never by powered entirely by green technologies. Because wind and the sun come and go and aren’t available 24/7, natural gas will always be required as a back-up. (Coal, however, will eventually be phased out.)

All in a Day’s Work

While the pandemic hammered many Canadian industries last year—causing the total workforce to shrink—the number of people working in the environmental sector rose by five per cent. In fact, about one in every 26 Canadian workers are present in every province, industry and practically every occupation and that figure is expected to continue to grow.

Canada isn’t blazing a new clean energy trail all on its own. The European Green Deal of 2019, which focuses on reducing the carbon footprint of industries such as steel, cement and chemicals, and the U.K.’s Ten Point Plan for a Green Industrial Revolution, were first out of the gate.

We’re also not the first to get out its chequebook either. Bloomberg projects USD $9.5 trillion USD will be spent globally on wind and solar energy between 2018 and 2050 and nearly $1 trillion USD more in batteries for energy storage.

This kind of revolutionary change isn’t exactly new, either. Let’s not forget that energy of the late 19th century and early 20th century came from steam and horses and they replaced by internal combustion engines.
Just how many clean energy jobs will be created in Saskatchewan remains to be seen but the initial indications are all positive. For example, last year, the province announced more than $650,000 in funding for three energy innovators through the Saskatchewan Advantage Innovation Fund, which supports game-changing innovations in core economic sectors.

With Canadian firms leading the way in the development of the clean technologies and climate solutions that the world is demanding, the national forecast for job openings is expected to approach 250,000 by 2029.

Sound as a Dollar

As move to clean energy takes hold, public and private investment dollars are flowing into the sector. On March 31, 2021, the federal and provincial governments announced more than $53 million in joint funding for infrastructure in Saskatchewan, including the Cowessess First Nation Awasis Solar Project that will supply clean energy to the SaskPower grid.33 A new report by the Canada Energy Regulator, Canada’s Renewable Power, released in March 2021 shows that Saskatchewan (and Alberta) are primed to lead the country in renewables growth by 2023—ironic, given our region’s significant oil and gas sector.34

Among the many clean energy projects under development in the province, the Golden West Wind Project will add 200 megawatts (MW) to the grid in 2021, and DEEP Energy Corp’s southeast Saskatchewan-based geothermal project is expected to add 5MW of clean energy to Saskatchewan in 2022.35

It’s Go Time

As the world moves toward clean energy technology, there is more opportunity available than simply building energy producing projects for our grid. Geothermal plants, like DEEP, can offer energy sources for greenhouse-based agricultural production, and our critical minerals are highly sought-after for rechargeable lithium-ion battery development, for electric vehicles and portable electronic devices. Plus, lithium extraction works together with our established oil and gas sector as another economic engine.

What Comes Next

Plant protein, critical minerals, agtech and clean energy can hand Saskatchewan a bounty of riches if we recognize what is in front of us and grab it. Now is the time, as my late father would say, to make hay while the sun shines.

References

1A Message from Bill Greuel, CEO; Protein Industries Canada, proteinindustriescanada.ca/news/a-message-from-bill-greuel-ceo
2Claiming Canada’s Global Plant-based Protein Opportunity, Protein Industries Canada, proteinindustriescanada.ca/opportunity
3,4,Critical Minerals, The Mining Association of Canada, mining.ca/our-focus/critical-minerals/
5Action Plan 2020: Introducing the Pan-Canadian Initiatives, March 2020 Preliminary Version, The Canadian Minerals and Metals Plan, minescanada.ca/sites/default/files/
cmmp-actionplan2020_rev52_feb_29_2020-a_en.pdf
6Canada Announces Critical Minerals List, Natural Resources Canada, canada.ca/en/natural-resources-canada/news/2021/03/canada-announces-critical-minerals-list.html
7Canada and U.S. Finalize Joint Action Plan on Critical Minerals Collaboration, Natural Resources Canada, canada.ca/en/natural-resources-canada/news/2020/01/canada-and-us-finalize-joint-action-plan-on-critical-minerals-collaboration.html
8Enhancing Canada’s Supply of Critical Minerals, Budget 2021, budget.gc.ca/2021/report-rapport/p2-en.html
9,10Minerals and Metals Facts, Natural Resources Canada, nrcan.gc.ca/our-natural-resources/minerals-mining/minerals-metals-facts/rare-earth-elements-facts/20522
11Canada-US Joint Action Plan on Critical Minerals Collaboration, Natural Resources Canada, saskmining.ca/ckfinder/userfiles/files/Plenary%20Session%201%20Update%20on%20 Canada-US%20Action%20Plan%20(Hilary%20Morgan).pdf
12Canada Announces Critical Minerals List, Natural Resources Canada, canada.ca/en/natural-resources-canada/news/2021/03/canada-announces-critical-minerals-list.html
13Saskatchewan Growth Plan, Government of Saskatchewan, saskatchewan.ca/government/budget-planning-and-reporting/plan-for-growth
14New Lithium Production Project In Saskatchewan, Government of Saskatchewan, saskatchewan.ca/government/news-and-media/2020/june/03/lithium-production
15Saskatchewan To Create Canada’s First Rare Earth Processing Facility At SRC, Government of Saskatchewan, saskatchewan.ca/government/news-and-media/2020/august/27/ree-facility
16Appia Confirms High-Grade REE, Uranium and Gallium Mineralization, Appia Energy Corp., appiaenergy.ca/_resources/news/nr_20200903.pdf
17Appia Confirms High-Grade Gallium Mineralization in all zones of Alces Lake Property, Appia Energy Corp., appiaenergy.ca/_resources/news/nr_20210325.pdf
18Saskatchewan Helium Play, Royal Helium Ltd., royalheliumltd.ca/projects/saskatchewan-helium-play/
19Rockridge Expands Drilling Program at Knife Lake Copper Project, Saskatchewan, Rockridge Resources Ltd., newswire.ca/news-releases/rockridge-expands-drilling-program-at-knife-lake-copper-project-saskatchewan-811497661.html
20Royal Helium Announces That Initial Testing Confirms Economic Helium Concentrations at Climax, Royal Helium Ltd., newswire.ca/news-releases/royal-helium-announces-that-initial-testing-confirms-economic-helium-concentrations-at-climax-827640822.html
21McIlvenna Bay Set to Become the World’s First Carbon Neutral Copper Development Project, Foran Mining Corp., newswire.ca/news-releases/mcilvenna-bay-set-to-become-the-world-s-first-carbon-neutral-copper-development-project-895936922.html
22Minerals, Government of Saskatchewan, saskatchewan.ca/business/investment-and-economic-development/key-economic-sectors/minerals
23,24Farmer 4.0: How the coming skills revolution can transform agriculture, RBC Economics, rbc. com/economics/economic-reports/pdf/other-reports/Farmer4_aug2019.pdf
25,26Agribusiness Market Study, Calgary Economic Development, calgaryeconomicdevelopment.com/assets/Agribusiness-2020-Market-Study/CED-Agribusiness-Market-Study-June-2020-PMMH-Redact-Final.pdf
27,28,29Farmer 4.0: How the coming skills revolution can transform agriculture, RBC Economics, rbc.com/economics/economic-reports/pdf/other-reports/Farmer4_aug2019.pdf
30Agribusiness Market Study, Calgary Economic Development, calgaryeconomicdevelopment.com/assets/Agribusiness-2020-Market-Study/CED-Agribusiness-Market-Study-June-2020-PMMH-Redact-Final.pdf
31Innovation Saskatchewan Supporting the Growth of Agricultural Technology, Innovation Saskatchewan, innovationsask.ca/news/innovation-saskatchewan-supporting-the-growth-of-agricultural-technology
32Investment into development of artificial intelligence spraying technology, Protein Industries Canada, newswire.ca/news-releases/investment-into-development-of-artificial-intelligence-spraying-technology-824492128.html
33Residents of Saskatchewan to benefit from recreational facility upgrades, improved water and wastewater infrastructure, and clean energy projects, Infrastructure Canada, newswire.ca/news-releases/residents-of-saskatchewan-to-benefit-from-recreational-facility-upgrades-improved-water-and-wastewater-infrastructure-and-clean-energy-projects-815509790.html
34, 35Canada’s Renewable Power, Canada Energy Regulator, cer-rec.gc.ca/en/data-analysis/energy-commodities/electricity/report/canadas-renewable-power/canadas-renewable-power/index.html