Oil production growth poised to pick up this year. Output of the province’s primary export product rose was up by only about 1.5% y/y ytd as of October last year; we assume that it will rise more meaningfully in 2022. Provincial drilling data suggested significant increases versus year-earlier levels in late 2021, momentum that provides a strong handoff into this year.
Uranium production forecast to rise in 2022. We assume U3O8 output just north of 8,000 tonnes from the Cigar Lake mine this year following its mid-2021 restart (chart 1); that would represent an annual increase of more than 50%. While we do not anticipate that the McArthur River mine will restart until the middle of the decade, steady prices in the 40 USD/lb range—materially higher than in recent years—should support miners’ bottom lines.
First stage of Jansen potash mine to add handsomely to capital investment over forecast horizon, put Saskatchewan among top provincial performers this year. Construction is expected to take six years at a total cost of CAD 7.5 bn, with first ore in 2027. Absent a construction schedule, we have assumed that outlays are roughly evenly split over the six-year period, with some omicron variant-related delays this year.
As in Manitoba, we expect more normal weather to help the agricultural sector this year. Saskatchewan crop incomes similarly took a hit amid this year’s Prairie drought despite strong pricing for staples wheat and canola; that also had a significant adverse impact on FY22 provincial government finances.
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