I am, sadly, deeply pessimistic about Alberta’s future.
It’s not about the COVID-19 virus. Public health measures backed by massive emergency government spending will hopefully spare us from the worst of the global pandemic.
The fear is how much the virus will cost – i.e. the consequences of the grinding of the provincial, national and global economy to a near-halt.
In Alberta, those costs are layered on top of the existing five-year collapse in the price of oil and gas prices, from $100 US a barrel to $50 US, and now a collapse of the collapse to $20 US.
These body blows are on top of the relentless pressure to kill the oil and gas industry entirely. Alberta is Canada’s sacrificial lamb on the global warming altar. The priest doing the killing is none other than Prime Minister Justin Trudeau himself.
I am no economist. But I have spent my journalistic career listening to experts, more-or-less understanding them, then putting their thoughts into language that readers can understand.
We’ve been here before. Life-long Albertans in their 60s remember the “Dismal Eighties”, Ralph Klein’s government cuts of the mid-’90s, the global 2008-09 recession, the ongoing oil crash since 2015 and now the relentless pressure to end all fossil-fuel production.
What we’re facing now is worse. Both the federal and provincial governments are looking at 20% more spending in 2020 than was budgeted, with a 20% loss in tax revenue due to virus-induced unemployment and the economic malaise.
Before the virus, the financial pounding was really just Alberta’s problem. The rest of Canada didn’t care about the loss of 200,000 oil & gas sector jobs, the pipeline bottleneck or the skyrocketing provincial debt under the NDP government. Fighting global warming with Justin and Greta was so much sexier.
The virus has, in just one month, doubled the federal government’s anticipated annual deficit, from $27 billion to $54 billion. Every province is plunging into further debt to fight the virus.
How governments borrow money is a topic beyond the scope of this column. Let’s leave it at this. If the Canadian economy shrinks by 2% in 2020, as is now expected, and government spending still exponentially increases, all hell is going to break loose.
Then there’s Alberta. Despite the UCP government’s fiscal conservatism, Alberta has long been saddled with over-spending governments.
Plummeting oil and gas prices mean at least a 50% drop in expected oil royalty revenues. The emergency spending to control the COVID-19 outbreak wipes out any gains made from minor reductions in government spending.
The consequences of low oil prices, the stock market crash, government debt, COVID-19 spending, the major rise in unemployment and drying up of jobs, the deliberate devastation of our oil and gas industry and the nation-wide indifference to Alberta’s problems is nothing less than catastrophic.
I have never seen it so bad. I am at least grateful that the province is in capable, fiscally conservative hands. But this is a war that will not be won without a decade of sacrifice.
We are starting to see another exodus of young people to B.C., Ontario and even Quebec, where jobs can still be had, where the future, however taxed, looks brighter than here.
I can see Alberta slowly drifting, point by point, down to Manitoba or even Maritime levels, where household incomes have traditionally been 20% lower than here.
The good times are over. Hope for the best, but prepare for the worse.
Many among us have long decried the consumerism and materialism of contemporary Canada.
Well here we are. By staying at home, we have stopped all discretionary/leisure spending. The economy has slowed by some 20%.
How do you like it so far?