There are four scenarios for Alberta's post-COVID-19 economic recovery.

The near empty parking lot at the Premium Outlet Centre shopping mall near the International Airport in Edmonton, April 17, 2020, is an indication of the economic impact of COVID-19 restrictions.Ed Kaiser / Postmedia

What’s going to happen?

After the pandemic, will recent graduates find decent jobs?

Will you have enough money to cover the mortgage and utilities? If not, will the banks/government cut you some slack?

Will seniors receive the same government pensions as in the past? Could private pension payments be slashed?

If I’m a businessperson, can I ride out the storm … or does all the blood, sweat and tears I’ve put into this enterprise end in bankruptcy … unless the government somehow bails me out?


Let’s not kid ourselves. The economy — thanks to COVID-19, rock-bottom oil prices and wanton over-spending by Ottawa and Alberta in the recent past — is in horrible shape.

It’s worse than 2008-09, when Canada was spared the brunt of the worldwide economic disaster caused by reckless lending in the USA.  It’s as bad as the ’80s in Alberta, the “decade of despair,” when so many lost their homes and dozens of mortgage lenders went under.

The Eighties weren’t as bad as the Dirty Thirties, the horrible recession in Alberta that started with the stock market crash of 1929, the dust-bowl drought of the ’30s and did not end until the Second World War.

Four possible Alberta outcomes are emerging.

No. 1 is nearly impossibly optimistic but still could happen. No. 4 is economic Armageddon, equally as unlikely. Numbers 2 and 3  are the most realistic.

Scenario 1: The Best Case, or the ‘V’ scenario. The post-pandemic recovery is swift. The economy recovers within a year. Hence the ‘V’ as might be drawn on an economic forecast chart.

Governments are still able to borrow or create money to pump back into the economy. Banks and lending institutions have enough government backing to favourably re-structure loan payments.

Companies, hospitals and school systems will still run the tightest of ships. A job, any job, will be precious. Pay cuts will be the norm. Walt Disney’s example of cutting executive pay by 25 per cent to 50 per cent will be the norm. The Canadian dollar will keep dropping in value. Even the best case will not be pretty.

In the oil and gas world, we get lucky for once. Global demand for transport fuels returns, the price of oil slowly recovers. Meanwhile, in Canada, an attitudinal change happens. Economic recovery takes priority over climate-change goals.

Scenario 2: The long recovery. A very slow but steady return to the pre-pandemic status quo. Employees are re-hired, but over years, not months. With so many unemployed, spending drops. Investment money slows to a trickle. Local real estate continues to drop in value, one per cent to two per cent every year.

The oil-and-gas scenario, however, remains the same as No. 1. No new projects, but pipelines get built, oil prices firm up. Natural gas export facilities actually get built.

Scenario 3: An economy under siege. Governments hit a spending wall. Lenders stop lending to governments with too much debt. Debt servicing sucks up most government revenue. Nobody can bail out businesses or individuals — capital has dried up.

Real estate values crater. With tenants unable to meet the rent, landlords go bankrupt left, right and centre.

Oil continues to be the cheapest commodity on earth. With the selling price below the cost of production, the oilsands shut down. Meanwhile, the Liberal government in Ottawa keeps ignoring oil and gas. Our kids leave the province to find work … if there’s work elsewhere.

Scenario 4: Armageddon. There’s no credit, no capital. Governments are flat broke. People lose confidence in the banking system, in all government, and especially in Canadian currency. The rich and the young flee the province, if there’s somewhere else to go. The oil and gas industry is reduced to a fraction of what it is today. Technology-as-economic-saviour turns out to be a sham. Albertans move into nightmare survival mode.  People fight tooth and nail to keep what they have.

Scenario No. 1 is unrealistic, as is the worst-case Scenario No. 4. If I’m a betting man, I’m putting my chips on Scenario No. 2 — a long, slow recovery.