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For the first time since the early 1980s, Alberta is expected to have an economic slump that lasts for two years as low oil prices persist and the province’s Finance Minister warns of a “once-in-a-generation” challenge reflected in a provincial deficit that could top $10.4-billion next year.
After years of Alberta’s energy-fuelled economy leading Canada’s growth, the province’s challenges have become a national burden, with unemployment mounting, banks reporting losses on loans and the federal government sliding into a deeper deficit.
“There is no minimizing the impact that low oil prices are having on people’s jobs, on the economy and the government’s fiscal situation,” Finance Minister Joe Ceci said on Wednesday. “This is a once-in-a-generation challenge.”
As the Prairie provinces continue to bleed jobs, Doug Suttles, chief executive of oil and gas producer Encana Corp., on Wednesday called the situation “as severe as I’ve ever seen in 33 years.” The Canadian energy giant will cut its work force to half of what it was in 2013.
The troubles show no sign of abating. Saudi Arabia’s Petroleum Minister ruled out production cuts on Tuesday, dashing hopes that the Organization of the Petroleum Exporting Countries could begin to reverse a plunge in prices for a barrel of oil drop of more than 70 per cent in the past year, to slightly more than $30 (U.S.).
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