FTLComm - Tisdale - October 3, 1999
Long term financial events and trends do not arrive or disappear quickly and this time last year we were seeing the affects of the Asian meltdown. Now a year later those effects are still with us as the Asian market for raw materials is still depressed and Japanese banks are being propped up by their government. This is the primary sourc

Government support /acre
US - $128
Europe - $75
Canada -$28
University of Guelph study

e of difficulty for the price of commodities like cereal grains. Though we know that both European and American governments support their grain producers, it is not their support which is causing the low demand and low prices that afflict the agricultural industry.

Agriculture in Canada is in serious trouble with the cost of production exceeding the return from sales. That spells doom in any business and during the next ten months we can expect significant numbers of grain produces North and South of the border to leave their farms and increased consolidation will take place.

The major concerns for this quarter revolve around two issues. The affects of Y2K and inflation in the heated American economy.

The Affects of Y2K

Though you have heard various scenarios of what might take place as the year 2000 occurs most of the serious affects have already taken place and they are huge. The banking and manufacturing sector has for the most part, already paid the price and that price has been enormous, as vast systems have been updated replaced and modified. Those cost are real and will fit into the general scheme of things without unduly taxing the economy, but they are real costs and will greatly exceed the immediate or disruptive problems that will result from some companies failing to get themselves ready for the change in date system. Financial markets are edgy over the end of this present financial quarter but they are far from panic and though there will be some vibrations, mostly the Y2K crisis is over.

As we are involved in the computer industry we have seen this sector extremely positive toward this last quarter and manufactures are assembling a huge inventory for expected sales in December. The industry expects the problems related to Y2K to linger into the third quarter of the year 2000. In an industry that lives on successive innovation there are a huge number of new technologies tumbling on to the market in November and many more in January among these Microsoft's Windows 2000 and IEEE technology products.



The American economy has been humming along at a breakneck speed for the past three and half years with the Dow steadily rising and investment growing in almost all sectors. This sort of thing produces inflation and the US financial gurus are looking at higher interest rates to cool things off a bit. This past week minimum wages rose in the United States and that might have some minor affect on the upper ward pressure on that economy.

The effects on our Canadian economy are side slap conditions where our dollar continues under pressure and even though our Canadian governmental spending is well under control, we are seeing the private sector making only minor gains and here in Saskatchewan things look to be at a standstill simply because the farm economy is experiencing reversals. The positive report on the prospects for the Saskatchewan Economy this past week by the Royal Bank reflected the general health of the Canadian economy as we continue to see manufacturing and mining recovering.


Local Economy

Tisdale, Melfort and Nipawin depend so heavily on the agricultural economy and the signs are everywhere of what people are doing.

Nipawin's set back during the past two years continues to see things in trouble. The closing of several popular businesses has seen shoppers from the North and East drive right on by to Prince Albert.

This has not been the case in Melfort and Tisdale as both communities have seen in the past twelve months a stabilisation in retail trade. Certainly, rural customers head off to Saskatoon and Prince Albert, but many still are doing their shopping locally. Best Value is not the draw that Zellers had been, but it is recovering a portion of the retail trade that Tisdale once enjoyed. In both Melfort and Tisdale the high volume of commercial trucking is producing some spin off trade and business.

Melfort's big ticket retail sales seems to be in decline with GM and Chrysler dealerships appear to be hurting while Ford continues to grind cheerfully along. Melfort's mall seems to be doing well and in general, Melfort's retail trade is positive, perhaps even slightly above past years, despite the decline in sales of in higher priced products.

Tisdale's manufacturing sector continues to grow and expand and this has a positive effect on local retail. Northern Steel Industries, Nuform Packaging are not the only two bright lights in Tisdale as other companies are also doing well but not with local sales. Farmers simply do not have disposable income or if they do, they are not spending it and the innovative industries developing in Tisdale are depending on markets elsewhere. GT Mechanical is presently building oil field service buildings.

Both Melfort and Tisdale have kept their construction workers busy this summer and with many projects underway both communities have been actually providing employment for people from Saskatoon. It is remarkable the amount of work that flows to Saskatoon contractors for services in both communities. Local plumbing and electrical contractors are working to capacity and new projects rely upon labour coming in from the cities.

As for local government, they also tend to patronise City companies to the extent that it often appears that the Town of Tisdale and Tisdale School Division actually boycott local businesses. Though this issue has come up many times in the past, the trend seems to be clear that if local government needs to purchase some product or service, they will always go to the city rather then shop at home. Local businesses find it galling for their tax money to be taken and spent to employ folks from Saskatoon rather then right here. (Case in point: there are two computer companies in Tisdale and two in Melfort yet when the Town of Tisdale bought new equipment this summer, it purchased the equipment from Saskatoon, did they get it cheaper, who knows, they never even asked the local businesses.) The message is loud and clear, if you want to do business with local government, move to the city and deal with them from there. It is a wonder that local government is so totally unaware of the benefits of having more local tax payers.

In the private sector, Tisdale's successful local larger businesses, Northern Steel, Bow Mar Sales LTD and John Bob buy locally, employ full time workers and support their community and community projects with sponsorships and donations.