Directwest May 2021 LB
Features

Transportation Hubs Critical to Saskatchewan’s Export Success

Saskatchewan used to be known as the wheat province, then more recently the POW (potash, oil and wheat) province. Now you can add another moniker to that list: Saskatchewan is Canada’s export province.

To wit:

  • Saskatchewan is the world’s largest exporter of pulse crops, like dry peas and lentils. The province is also the leading exporter of durum, mustard seed, canary seed and oats.
  • Saskatchewan is the world’s leading exporter of potash, accounting for nearly half of global exports.
  • Canada is the leading exporter of canola in the world, with nearly half of global exports. Saskatchewan accounts for more than half of the country’s canola exports.
  • Saskatchewan is the world’s second-leading producer and exporter of uranium.
  • In 2020, Saskatchewan exports totalled roughly $30.3 billion, roughly 40 per cent of the province’s GDP of $77 billion.
  • On average, Saskatchewan exports about 65 to 70 per cent of everything it produces. Of all the provinces that are net exporters (Ontario, Alberta and Saskatchewan), Saskatchewan regularly exports more than 50 per cent of its total production, making it the most export-oriented province in Canada.

You get the idea. Export trade is the lifeblood of the Saskatchewan economy, and the province is punching well above its weight as the world’s leading exporter of many commodities and products.

Historically, we’ve done well exporting our products to the world and we continue to lead the pack, but what about the future?

In its Growth Plan for 2020-2030, the Saskatchewan Party government sets out some ambitious targets for our export sector:

  • Increase the value of exports by 50 per cent to $45 billion.
  • Grow the number of international markets to which Saskatchewan exports more than $1 billion.
  • Grow Saskatchewan’s agri-food exports to $20 billion.

So how do we get there? How can our export sector achieve these admittedly lofty goals?

Inland ports

Increasingly, transportation hubs or inland ports are seen as a means of boosting our exports. By having access to warehousing, power and water, logistics services and transportation infrastructure in one area, companies can gain a strategic advantage over their competitors in the global marketplace.

Last year, Colliers International, a real estate and investment management firm, issued a report on transportation hubs and inland ports in Saskatchewan, called the Spark Report. The report looked specifically at the Global Transportation Hub (GTH) and Chuka Creek Business Park (CCBP), near Regina, and the Saskatoon Transportation Link (STL), southeast of Saskatoon.

Of the three, the GTH is largest and most well-established, with 50per cent of its 1,870 acres of developable land sold and a dozen businesses occupying 1.5 million square feet, including Loblaw’s Western Canadian distribution centre and Canadian Pacific’s intermodal facility.

STL is in the early stage of development, with a canola processing facility on the 750-acre site, while the 168-acre CCBP is operational with world-class container loading equipment in place, according to the report.

The three transportation hubs will allow “Saskatchewan to capitalize on its advantageous position as a major east-west axis for highways, as well as the transcontinental railway routes,” the report said.

Richard Jankowski, managing director of Colliers in Saskatchewan and principal author of the report, said all three transportation parks will help create the “critical mass” needed to attract more export-oriented
businesses and value-added processing to the province.

“Critical mass becomes a catalyst for growth,” Jankowski said. With transportation infrastructure, utilities and logistics facilities in one location, more and more export businesses will be attracted to those hubs.

He cited Cargill’s recent announcement in August to locate its $350-million canola crushing plant at the GTH as the kind of manufacturing or processing facility that transportation hubs can attract.

“The Regina region and the Saskatoon region, and Saskatchewan in general, can become the food and energy capital of Canada,” Jankowski added. “That’s why we’re so excited about it.’’

Of course, Colliers has also been managing the GTH on behalf of its owners, the Government of Saskatchewan, since December 2019, so it has a big stake in the success of the GTH.

But Jankowski said all three transportation hubs could have similar success in attracting large-scale plants, like the Cargill canola crushing facility.

“The overall impact is staggering,” the report said, referring to the projected $4.5 billion investment and estimated 7,700 jobs to be created at the GTH over the life of the project.

“Saskatchewan inland ports and industrial parks provide a key economic opportunity that enables us to share our abundant resources beyond our borders and to realize the maximum benefit for the people of our province.”

Tina Beaudry-Mellor, chief economic growth officer with Economic Development Regina, agrees that the province has a “moral imperative” to help feed the global population of eight billion people and growing.

“Saskatchewan plays a critical role in feeding the world,” Beaudry-Mellor said. “The global population is going to exceed the availability of arable land over the next couple of decades. The more we can extract value from the existing arable land the more likely we are to be able to feed growing and hungry populations.’’

And transportation hubs, like the GTH and CCBP, are “absolutely critical” for the city and province to achieve its economic goals, as well as help feed the world, she added.

“We can reach 60 million consumers within a day’s drive and over 270 million within two. We’re also surrounded by 70 to 80 per cent of Canada’s farmland. Both the GTH and Chuka Creek play an important role in reducing those supply chain costs that are so important to producers.”

Coming soon

One company that was attracted by the GTH’s combination of access to raw materials, proximity to a large, skilled workforce and well-developed transportation and logistics infrastructure is Red Leaf Pulp, a wheat straw-based pulp producer.

On June 1, Kelowna-based Red Leaf announced it was locating its first pulp facility in Regina at the GTH. The plant, the first non-wood pulp mill in Canada, will cost $350 million to construct, create 110 full-time jobs and 250 construction jobs by completion in early 2022.

“We’re bringing innovation to the province and Canada that’s never been done before successfully on the scale that we’re contemplating,” said Lauren Nottebrock, director of sustainability for Red Leaf.

“We see the opportunity to utilize an existing agricultural residue (wheat straw) that’s been underutilized and create a higher-value use for it.”

Nottebrock said access to feedstock and a large, skilled labour force was critical in its decision to locate in Regina, as were the transportation infrastructure and utilities, like power and water, provided by the GTH.

“Regina had a lot of infrastructure—CN-CP, major highways, the Regina Bypass, and airport, utilities. Another important thing was to tie into the city’s wastewater treatment facility.”

Small but mighty

Even small exporters can find efficiencies and opportunities by locating at the GTH or other transportation hubs.

Sunhua Natural Foods Company is a small, two-year-old company that specializes in exporting mainly organically grown, non-GMO canola oil, flax oil, roasted flaxseed and quick oats produced and processed in Saskatchewan.

“Basically, we do private label (sales) from the plant for companies based in Saskatchewan,’’ said Connie Zhang, assistant manager of Sunhua.

Sunhua is focused on exporting to Asian markets, including South Korea, Vietnam, Japan and especially China, which makes close proximity to transportation and logistics critical for the fledgling exporter.

“We chose the GTH so we can be near railways and highways (and) also container loading facilities. In addition, here we have access to warehousing facilities. All those things are very important for us as exporters. It can reduce transportation costs and transportation time.”

Looking next door

Groupe Touchette, CentrePort.

As the largest multi-modal inland port in North America, with 20,000 acres of industrial land, access to three major railways (CN, CP and BNSF), James Armstrong Richardson Airport and major highways running east and west, north and south, Winnipeg’s CentrePort Canada is the “gold standard” of Canadian transportation hubs.

Since being created by provincial legislation in 2008, CentrePort has attracted more than 100 companies thanks to its combination of central location, access to a large, skilled workforce, low-cost, high-voltage energy from Manitoba Hydro and “fast tracked” zoning approval by the Inland Port Special Planning Area.

Diane Gray, president and CEO of CentrePort Canada, said the success of CentrePort is largely due to having all of the things that exporters need to be successful. “Obviously, (one advantage is) our transportation assets.”

“The area designated for CentrePort was strategically selected to bring in the cargo operations of our 24-hour-a-day, seven-day-a-week airport. Winnipeg has the most cargo-dedicated, freighter flights of any airport in Canada.”

“We have the CP mainline. We also have a CN stub line… and Burlington Northern Santa Fe accesses Winnipeg through federally regulated inter-switching rules. So, projects located at CentrePort can be served by three Class 1 rail carriers.”

“We are a major trucking hub. Over 70 per cent of Manitoba’s trucking industry is headquartered at CentrePort, including several of Canada’s largest, like Bison Transport, TransX and many others.”

“Having that proximity to all of these transportation assets is a benefit to companies.”

Another big factor is access to skilled workers. “We planned a 500-acre residential community as part of CentrePort,” Gray said. Several educational institutions, like Red River College and the Manitoba Institute of Trades and Technology, are also located at CentrePort.

Major Drilling, CentrePort.

The third thing companies are looking for is “certainty and time to get to market,” she said. “It’s great if you have land, but if you can’t get timely development approval, building permit approval, occupancy permits, servicing, power, all of that means nothing.’’

“We worked with the province and Rural Municipality of Rosser to create the first Inland Port Special Planning Area. What that does is, it takes the decision-making around development out of the hands of the municipality and into the hands of a dedicated planner, who provides recommendations to a board comprised of municipal, provincial, airport authority and CentrePort representatives.”

“What we found is that they can get concurrent subdivision and rezoning approval within three months and building permits within about two weeks. So, we’re offering the market the knowledge that they can get projects developed and built on time.”

“Companies, developers, big projects, they’re all looking for that certainty of market experience because it impacts their bottom line. So, we’re able to provide that at CentrePort.”