While the rest of Canada basks in relative economic bliss, Alberta is miserable. A recession in 2015-16 followed by a painfully slow recovery has created much economic hardship. Job losses, business closures, out-migration and political unrest are some of the consequences of difficult times. Here are some graphics that describe the gloom in the province that once led the nation’s economy.
And GDP hasn’t been great either….. The economy grew at only 0.4% – the lowest rate in any province. Overall business investment declined for the 5th straight year. Unemployment, at 7.0%, has increased and it’s the highest outside of Atlantic Canada.
Retail sales are sagging….
Manufacturing jobs are in decline…… Although manufacturing output is steady
And as the Coronavirus’ impact on economic activity began to be felt….January saw oil prices slide – West Texas Intermediate (WTI) crude dropped $10 in January by almost 16% … the worst January price slide since 1991. Alberta’s heavy crude, Western Canadian Select (WCS) fell even more sharply 18.5 per cent, down to $31/ barrel.
The agriculture sector suffered tough times too. Poor harvest weather might have cost farmers $700 million. And border closures to canola in China, pulse crops in India, durum wheat in Italy and barley in Saudi Arabia saw prices for commodities fall. Prices are expected to remain low for most crops into 2020. Canola prices recovered to some extent but the , the Coronavirus has spooked the marketplace again.
The City of Edmonton had a tough year in 2019. Growth was only 0.5% and unemployment averaged 7.7%. The prospects for GDP growth in 2020 are also weak. Perhaps only 1.4% and 2.5% in 2021.
Calgary economic situation is difficult too. In Calgary office towers the vacancy rate is over 25% Calgary unemployment rates are slowly declining, as are labour participation rates..
Severely Normal Albertans can clearly see the links between ‘alienation’ frustration and a weak economy. The prospects of continued tough times and a propensity by provincial politicians to blame the federal government or the situation, makes matters worse.
And at the strategic level, the provincial government has placed its bet on the conservative orthodoxy that Alberta will grow again by reducing corporate taxes, building pipelines and one more oilsands mine. The idea of diversifying the economic base has fallen by the wayside once again.