2017 Year of the Crocus

Severely Normal Albertans are optimistic by nature.  As the recession dissipates we watch for clues that happier times are returning.  Our Finance Minister, Joe Ceci is fond of using the term ‘green shoots’ as analogy of early signs of good times ahead.

So how are those ‘green shoots’ doing?  Well when you review the list below you won’t be reminded of a field of green oats where you can almost hear the stalks growing.  Nope, think of a crocus on the hillside just beginning to emerge.

But the political rhetoric is ramping up with a leadership contest for the United Conservative Party underway.  The rationale for unification on the right was driven by an urgent desire to get rid of the NDs because their economic and environmental policies were leading to ruination.  So expect the UPC narrative to tell you winter isn’t over.

The NDs though will keep pointing to the story of the “green shoots”.  And shoot back at the UPC that winter would have been much colder except for the warm chinooks of government spending. The data and forecasts shows much more mixed results. 

There are facts to fit both storylines.   Normal Albertans should keep a BS detector handy!

Let’s check it out some data: 

  • Drilling activity is up from last year but the numbers are still low.
  • Western Canada Select crude oil price stuck in  $35 range.
  • Alberta natural gas in 2015 averaged $2.05 per GJ and will end up about $3.00 on average for 2017, Remember 2008 when it was $8.00?
  • Conventional oil and gas extraction increased by over 3%.
  • Oilsands leases are being abandoned. The land leased for oilsands declined for 9.0 million hectares in 2014 to 8.1 million in 2016.
  • Multinational oil companies have been exiting Alberta for better opportunities elsewhere.
  • 2017 crop conditions are not stellar. The crop reporting index rates the province at 60% overall (the 5 year avg is 75%)  Too dry and hot in the south and too much rain north of Edmonton. 
  • Cattle prices in Alberta increased 11.1% in May 2017 compared to May 2016.
  • First quarter 2017 farm cash receipts are up 3.8% compared to 2016.
  • Trump era duties hit Alberta’s forestry sector with increases of 6 – 7%. The total duties in this softwood trade barrier skirmish are 27% to 31%. 
  • Exports of machinery and equipment are improving.
  • For the first time since 2015 wages of employed Albertans rose in May to $1,120. In 2014 average weekly earning were around $1,170.
  • Retail sales in the province have increased in nine out of the last ten months.
  • Vehicle sales were up about 3500 units over last year.
  • Calgary and Edmonton food banks user statistics for 2017 are even higher than 2016 which was a record year.
  • Building permits for non-residential construction will be weak in 2017 
  • Business investment forecast to be flat throughout 2017