It’s been almost impossible to keep up with the news of the past few days, from the oil-price crash of last weekend to the COVID-19 pandemic that is escalating at breakneck pace.
And it’s been equally impossible to assess, precisely, what any of this means for Alberta’s already fragile economy. The province has been on an economic roller coaster over the past decade, with each of its ups and downs defined by oil prices, but this latest plunge feels like something altogether different.
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First, there was the 2008 financial crisis that battered the global economy. As the province was shaking off the effects of that, oil prices took another steep dive in 2014, setting off a two-year recession that caused unemployment to spike and provincial revenues to dry up.
And now, as Alberta continues to crawl out of that downturn, the province has been hit by a double-whammy of COVID-19 and a Russia-Saudi price war that caused oil prices to crash.
I teamed up with my colleagues in Calgary, Jeff Jones and Emma Graney, to take stock of where Alberta was at before the events of the past few weeks. It’s a grim starting point that has left many Albertans exhausted and wondering if things will ever turn around, And more important, we look at happens now as we enter a period of enormous uncertainty (and, as Premier Jason Kenney warns, a potential global recession).
The novel coronavirus outbreak has depressed oil demand, as international travel grinds to a halt. The dispute between Russia and Saudi Arabia has meant that prices are now well below what many producers in Alberta need to break even. Further downsizing will put more pressure on real estate, tourism and overall economic growth.
And all of that will place significant strain on the province’s budget, which is already projecting multibillion-dollar deficits.
As Martin Pelletier, portfolio manager at Trivest Wealth Counsel in Calgary, put it: “This is the worst I’ve seen in energy in my 20-year career. And it’s getting worse, so buckle up.”
Across Western Canada, the public-health situation has been changing rapidly. As of Friday afternoon, Alberta had 29 confirmed cases (all added in a little over a week) and B.C. had 64, including one death. Saskatchewan had two confirmed cases and Manitoba had four.
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Only B.C. has had a confirmed case of community transmission.
At the same time, governments in this region and across the country are imposing restrictions to curb the spread of COVID-19, such as banning mass gatherings. The federal government is banning large cruise ships from docking at Canadian ports.
Manitoba plans to cancel public schools on March 23, joining Ontario and New Brunswick. So far officials in B.C., Alberta and Saskatchewan haven’t gone that far.
Health officials are now recommending Canadians don’t travel outside the country and, if they do, to isolate themselves for 14 days upon their return.
For more on the outbreak, sign up for our new Coronavirus Update newsletter with the day’s most essential coronavirus news, features and explainers written by Globe reporters. In addition, we’ve has dropped the paywall on our coronavirus news stories. We have a large team of journalists working to bring readers the most up-to-date information and applying high standards to make sure each story is factual and does not feed in to panic.
This is the weekly Western Canada newsletter written by B.C. Editor Wendy Cox and Alberta Bureau Chief James Keller. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here. This is a new project and we’ll be experimenting as we go, so let us know what you think.
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Around the West:
SURREY POLICE: This week, the province released a heavily redacted report on issues around replacing the RCMP in Surrey with a new municipal police force by April, 2021. It flagged financial risks and whether officers could be trained quickly enough. The report, prepared by a municipal-provincial committee chaired by former B.C. attorney-general Wally Oppal, says the police board for the new force will also have to reach agreements with other agencies, including the province and an expected police union.
GRETA STICKER: Amnesty International says it’s not enough for political leaders to condemn a sexually suggestive decal appearing to show teenage climate campaigner Greta Thunberg and they should do more to protect human-rights activists. ”While there have been many expressions of dismay and disgust about this particular sticker … it is imperative to recognize and acknowledge that this is not a unique or singular incident,” Alex Neve wrote in the letter dated March 5. “It is reflective of a wider concern for which much more serious and concerted action is urgently needed.”
CONSTRUCTION COSTS: Construction costs rose more in Vancouver than in any other city in Canada during the past two years and were predicted to go up about 4 per cent this year, says a national tracking study. The costs are increasing at a time when the province is on a massive drive to deliver big infrastructure projects, including two SkyTrain lines and a new Pattullo Bridge, along with thousands of units of low-cost housing. Vancouver’s costs increased by 5.19 per cent in 2018 and 6.39 per cent in 2019, with slightly more than 4 per cent anticipated for 2020.
ALBERTA PUBLIC-SECTOR COURT CASE: The Supreme Court won’t hear a case involving the rights of public-sector workers in Alberta in a labour dispute with that province’s government. The union was challenging legislation passed last summer by Premier Jason Kenney’s government to delay binding arbitration in collective agreements affecting thousands of workers. The province passed the law in June, saying it needed the delay to gain a better understanding of the province’s finances.
CALGARY’S PLUS-15: Calgary wants to expand the system of elevated walkways that links many of its downtown buildings and make it easier to navigate the much-loved network, despite a continuing economic downturn that has stalled most new construction in the city. Calgary’s officials are nearing the end of a study that is looking at making the system larger, with a proposal to broaden it north toward the Bow River and an expected station on a new light-rail line being planned. Officials are also looking at changing the rules for the Plus-15s for the first time in 36 years, with a focus on improving navigation and increasing the hours the network is open to pedestrians.
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Opinion:
Annalise Klingbeilon cuts to Alberta parks: “Whether it’s a family vacation, a junior high school field trip or a first date, we have fond and formative memories in our parks – and so these cuts hit at the heart of who we are as Albertans and Canadians. We are deeply proud and protective of our world-renowned natural spaces, these threads that tie us together.”
Thomas Kerron blood-borne infections in Canadian prisons: “A critical step to eliminating HCV and HIV as public health threats is to prioritize the health of prisoners. Most people in prison do not stay there forever; they return to their communities after serving their sentence. And all too often, they return carrying the burden of HCV, HIV or another needless infections acquired behind bars.”
Kelly Cryderman on hoarding during the coronavirus pandemic: “Hoarding is despicable, and especially so in the midst of a global pandemic that threatens lives, social stability and the economy. News reports of stores being sold out of basic cold and flu medications are worrying. Stores will need to implement more limits on certain key products to keep some online hustlers-cum-vultures from swooping in. “Don’t be a jerk” needs to be a guiding mantra.”
Alexandra Gillon Richmond’s Dolar Shop: “More importantly, the Dolar Shop broths are amazing. Don’t bother with the standard pork leg, tomato-oxtail or spicy Sichuan. Go straight for the “exquisite” golden or silver soups. The golden is dark yellow and thickly gelatinous from slow-simmered rooster comb, chicken feet and pork-neck bone. The silver, although less of an edible emollient, is more balanced with the subtle burn of white pepper, sweetness of Chinese dates and umami depth of Jinhua ham. Seriously, these two milky broths rank above and beyond any other hot-pot soup in Metro Vancouver.”
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.