By Bruce Johnstone
For Economic Development Regina
There’s no question that water is a critical component to developing a global food production and processing industry on the Prairies.
In 1967, Saskatchewan took a major step forward in water security with the completion of the first phase of the South Saskatchewan River Project (SSRP) – Gardiner Dam and the province’s largest lake, the 225-km long Lake Diefenbaker. Today, the project supplies water to more than 60 per cent of the province’s population and generates 186 megawatts of electricity from Coteau Creek Generating Station – enough to power 100,000 homes.
But, from the standpoint of adding value and diversifying Saskatchewan’s agricultural production, the project never achieved its full potential.
“We are utilizing only a tiny fraction of the project’s potential – more water evaporates from Diefenbaker Lake than we actually use,’’ then-Public Safety Minister and Regina Wascana MP Ralph Goodale told the Prairie Water Summit in June 2019.
But, with climate change and the increasing frequency and intensity of extreme weather events, like droughts and flooding, as well as concerns about the quality and quantity of water supply for Regina and Moose Jaw, the 50-year-old plan to achieve the original vision of the SSRP – now known as the Diefenbaker Water Project -- has been given new life.
The first step in its revival was the allocation of $1 million in the 2019 federal budget for Western Economic Diversification Canada (WD) to take another look at linking the South Saskatchewan River system to the Qu’Appelle River system.
In late August, WD released its report and recommended that the federal and provincial governments proceed with development of the Upper Qu’Appelle and Westside irrigation projects, at an estimated cost of $3.27 billion. The report estimates the total economic value at $83 billion and total job creation at 22,700 over the lifetime of the projects.
“After extensive analysis, WD has arrived at the conclusion that these infrastructure projects are valuable and necessary, and should be pursued with ambition,” the report said. The federal government also “endorses the recommendation of this report,” indicating that federal funding would be available.
This spring, the provincial government got on board with a $5-million contribution in the 2020-21 budget for SaskBuilds, the province’s agency responsible for infrastructure and procurement, to further study the project.
Then in July, the Province announced that $22.5 million would be invested in the first phase of a 10-year, $4-billion irrigation project at Lake Diefenbaker.
The first phase of the project is expected to cost $500 million and will expand on the existing Westside irrigation canal system with the addition of 80,000 acres of irrigable land.
Phase Two will see further build-out of the Westside Irrigation project, adding another 260,000 acres of irrigable land, at a cost of $3.5 billion.
Phase Three would see the build-out of the Qu’Appelle South irrigation project, providing an additional 110,000 to 175,000 acres for irrigation and ensuring a safe, secure water supply to Moose Jaw, Regina and many other communities in southeastern Saskatchewan.
In total, the province estimates the project would increase the number of irrigable acres in Saskatchewan from 500,000 to one million, stimulating an investment of $40 billion to $80 billion over the next 50 years.
“The announcement of this generational project will see the vision of Lake Diefenbaker completed over the course of the next decade,’’ said Premier Scott Moe. “By doubling the amount of irrigable land in our province, this project will be a massive step in completing the goals our government has set out in our 2030 Growth Plan.”
Among those goals is the doubling of revenues from value-added food processing from $5 billion to $10 billion by 2030, including increasing the percentage of canola crop crushed in the province from 40-45 per cent to 75 per cent (for a gain of $2 billion annually) and increasing the percentage of pulse crops processed in the province from 10 per cent to 50 per cent (for a gain of $1 billion annually).
Another development that added impetus to the province’s plan to double value-added food processing revenues by 2030 was the federal government’s announcement in February 2018 to name Protein Industries Canada (PIC) as one of five ‘superclusters’ under the $950-million Innovation Superclusters Initiative.
The federal government is committing $153 million over 15 years to PIC, which will be matched dollar for dollar by PIC’s 200 or so partners. The Diefenbaker Water Project will provide the guaranteed source of water for plant-protein production and processing that producers and industry need to make those multi-billion-dollar investments.
All of these developments – the plant-protein supercluster, the province’s Growth Plan, the Diefenbaker Water Project – have provided more momentum to Economic Development Regina’s global food processing hub strategy.
The Diefenbaker Water Project promises to provide a sustainable resource to build a stronger economy in Regina, particularly in our agricultural and food sector, where Regina has amazing room for growth," said Frank Hart, chair of EDR’s board of directors.
As can be expected, any project of this scale requires a great deal of upfront thought. For example, we need to understand impacts and the opportunities the project presents for our environment, for Indigenous peoples and for other sectors of the economy such as tourism.
Wayne Clifton, president of Clifton Engineering Group of Regina, agreed that the Diefenbaker Water Project has been studied by various agencies and levels of government for more than 50 years.
“It’s been through numerous public discussions of water policy,” said Clifton, whose consulting arm, Clifton Associates, was contracted by WD in May 2019 to review the economics of project. “It’s been around for a long time.’’
In fact, Clifton says the Diefenbaker Water Project was part of the original vision of the South Saskatchewan River Project. And it was in the process of being completed in the early 1970s when it was shelved by the government of the day.
“That’s now 50 years ago. Most of the modern generation has no knowledge of any of the history and what the original vision and commitments were,’’ Clifton added.
Of course, that was then and this is today. Environmental regulations are more stringent and public consultations, particularly with First Nations, are mandated by law. And environmental groups are better organized and informed than they were 50 years ago.
“The reason we’ve got approval processes, like the Environmental Assessment Act, both provincially and federally, is to bring folks to the table and identify whether or not the project is a good idea,” Clifton said. “If it’s a good idea, how does it proceed and get consensus among the parties?’’
That said, Clifton feels confident that the project will pass muster when all of the feasibility studies, environmental impact statements and consultations are complete.
“The work that has been done to date is largely to assess whether or not it’s economically viable. And the cost-benefit ratios are very positive. They indicate a very strong investment case (for the project).’’
But Clifton believes the Diefenbaker project is more than just an irrigation project. It will provide flood and drought-proofing and water security to the southeastern part of the province.
“It’s being discussed as in irrigation project, but it really isn’t. It’s a water security project for a good chunk of the Palliser Triangle, for southeast Saskatchewan in particular.’’
Clifton also noted that the project comes at a good time for the construction and construction- engineering sectors, which are in a major slump due to the Covid-19 pandemic.
But biggest economic impact comes from the use of water in the production and processing of high-quality food for the global market. “The economic benefits really come in the associated industrial development,’’ Clifton said.
He cited the area around Medicine Hat, Lethbridge, Taber and Brooks, AB, as a textbook example of how irrigation can lead to large-scale industrial development. “They’ve got equipment manufacturing, protein production in that region… Not only that, you’ve got the transportation, you’ve got finance and insurance.”
Clifton said the project will help put Saskatchewan on the map for major companies looking for places to build large-scale food production and processing plants.
“Primary production is just the first step. You’ve got all the secondary industry. We call them economic building blocks. The primary producer is the initial building block, then everybody else builds on that production -- the vendors, the processors, the transporters, all the value-added operations.’’
Clifton said the project could take 10 to 20 years to reach its full potential. And the investment potential is in the tens of billions of dollars.
“It’s the largest undeveloped agricultural production area, certainly in North America and one of the largest ones globally. It’s a very significant undertaking with long-term effects,’’ Clifton said.
“It’s a big deal.’’
A project as transformative to Saskatchewan’s economy as the Diefenbaker Water Project will require transformative thinking. And conventional wisdom suggests we won’t get there by doing what we’ve always done. What better opportunity to re-think the way we do things?