22

The decline of the Alberta dream, in one chart

You have to go back nearly 30 years to find a time when the unemployment rate in Alberta was this close to the Canadian average


 
A work truck drive to the Syncrude plant in Fort McMurray Alberta, November 14, 2015. (Photograph by Jason Franson)

A work truck drive to the Syncrude plant in Fort McMurray Alberta, November 14, 2015. (Photograph by Jason Franson)

No jobs news is good news in Alberta these days. Large-scale layoffs at energy companies make for almost daily reading, and statistical releases related to the province are seldom any nicer. Friday’s job numbers from Statistics Canada were downright ugly. Nearly 15,000 jobs were lost in Alberta between October and November, the worst monthly performance since the end of last recession—and the numbers showed the contagion spreading well beyond oil and gas: transportation and warehousing, finance, and accommodation and food service were all down by thousands of jobs.

In November Alberta’s unemployment rate rose by 0.4 percentage points to 7.0 per cent, the highest it’s been since April 2010. As economist (and Maclean’s contributor) Trevor Tombe noted, after all the punishing months the Alberta rate is still above national rate of 7.1 per cent.

But let’s look back at that month of April 2010. A larger share of Albertans were looking for work then than now, but the province was doing relatively well in a country recovering from the Great Recession; unemployment averaged about a point higher nationally. What’s different in 2015 is that the petroleum province’s suffering is disproportionately bad—and it’s been a long time since the Alberta and Canadian numbers have come this close. After decades of labour migration to the prosperous land where the flats meet the mountains, it’s charts like this that potentially herald the end of an era.

A look in the StatsCan wayback machine shows that the province’s unemployment rate and Canada’s are the closest they’ve been since September 1989, when the national rate of 7.3 per cent was one tick ahead. Alberta joblessness was worse or nearly worse than the rest of the country throughout the 1980s. If there’s one thing Albertans dread hearing, it’s comparisons to the 1980s, when a toxic potion of low oil prices, lousy national policy and double-digit interest rates pounded Alberta.

“It’s a big shift from what we’ve seen recently, with Alberta in the leader’s seat, and other provinces being a bit more of laggards,” says Brian DePratto, a TD Bank economist. It used to be that gains in the oilpatch offset job cuts in eastern manufacturing and other sectors. Now, DePratto predicts the inverse will continue.

If the lead-up to Friday’s OPEC meeting in Vienna had given reason for optimism on crude prices, the oil cartel quickly snuffed those hopes, choosing to boost production rather than cut it.

This makes it more likely that the job losses in Calgary, Fort McMurray and many parts in between will continue into the new year. In an upcoming monthly report, expect to find Alberta in unfamiliar territory: as a below-average place to find a job.


 

The decline of the Alberta dream, in one chart

  1. “Let the Eastern bastards freeze in the dark”

    HEH HEH HEH

    • Yeah, that’s all well and good, dumb-ass, until your local government has to start cutting wages and services because that gravy train rain of equalization money is no longer flowing out of Alberta. Laugh all you want, but if a few hundred thousand Albertans, and the companies they work for, are no longer paying YOUR taxes because they have no incomes to be taxed, where’s all that tax money going to come from.
      Like it or not, our pain flows downhill. Enjoy the decline, dimbulb.

      • Sorry to burst your prairie bubble Bill, but contrary to popular Alberta wisdom (lol), you are not paying the rest of Canada’s taxes. We work hard, we pay our taxes, and at one time we paid equalization to you… so get over it bubba.

        • Beautiful,,,,,Agree TOTALLY, Bill and the rest of the Albertans have always lived in a fantasy world.

          • Again, you demonstrate how little you know, Emily and friend. For one thing, the last time any equalization money flowed into Alberta, Eisenhower was in the Oval Office. More than a third of the entire life span of Confederation has passed since then.
            Equalization has come to represent a deep flaw in our rules of governance. For several years now, regions home to a minority of Canadians have been the net contributors to equalization. Those regions pay more taxes than they consume in services. They are subsidizing the costs of government services in parts of the country that consume more in services than they can pay for with taxes. In some parts of Canada, that equalization amounts to $2-3000 dollars per capita per year. In Quebec, it’s about $800 per capita per year.
            If the people in those regions are happy to accept the responsibility of fully funding services formerly funded via equalization dollars going forward, because the the tits have been pulled off the cow called Alberta (current equalization contribution $5000 per capita per year), why weren’t they willing to pick up that tab in the past?
            More to the point, if the cost of services was too great for the various regions to sustain them in the past, how will they support the costs of those services without the subsidies from Alberta?
            Like I say, you can cheer all you want, but all you’re cheering for is your own economic misfortune. Given the quality of your posts in the past, it comes as no surprise that you are genuinely that stupid.

    • I see Emily’s definition of the “Canadian values” she is so fond of writing about is making her laugh.

      Unfortunately, with an NDP Government in charge provincially, and a Liberal Government in charge federally……..Alberta will soon be back on the dole of equalization payments. Of course, Quebec will be screaming bloody murder if they see their “pay” cuts, just as Ontario will complain as well. With Harper gone though….I don’t expect too much blame to be placed on Trudeau.

      Poor Brad Wall….as the last standing conservative, the media and the whiners will surely find some way to blame Saskatchewan….

      So glad the pain that is about to come in the next 4 years won’t really affect my bottom line.

      I’m just hoping that those Liberal and NDP voters remember that when they are lining up at the food bank.

      Reap. Meet Sow.

    • The CBC has an article on this that finds less humour in Alberta’s situation.
      Since posts with URLs seem to end up in moderation purgatory for all eternity, google “Suicide rate in Alberta up 30% in wake of mass oilpatch layoffs” (with the quotes).

    • []
      The CBC has an article on this that finds less humour in Alberta’s situation.
      Since posts with URLs seem to end up in moderation purgatory for all eternity, google “Suicide rate in Alberta up 30% in wake of mass oilpatch layoffs” (with the quotes).

  2. There is so much more to this story. Expecting a resurrection of Ontario/Quebec manufacturing to offset the downturn in Alberta oil and gas is a dream. The move to Asia pacific trading will overwhelm anything Ontario and Quebec will try to offset the trade. Unfortunately the USA doesn’t need Canada manufacturing, and the push toward Asia and India are on the agenda. The world order is changing and Canada is being marginalized by its neighbour. Alberta and particularly our reliance on raw materials is going to be our only major source of income. It is simple economic reality as China, India, and the rest of the pacific community moves closer due to the economic interaction between these countries and the USA. To salvage the Canadian economy for 33 million Canadians will not be a manufacturing renaissance, but a reality that we are the materials supplier to the larger world. Watching Ontario’s electricity fiasco brings home the reality that inputs will marginalize any gains. As for political intervention, good luck with that. The Alberta dream is not dead. Just paused. The reality is that Western Canada needs Ontario and Quebec even less today than ever. Toronto will be marginalized by the lack of need as the internet unseats the financial world.

  3. It’s time for regional differences to be dropped. The Ontario – Alberta – Quebec tugs of war regarding economic supremacy need to be buried. It’s counter productive and divisive. Canada’s provinces have all had cycles of ups and downs. No province has been overlooked in the economic roulette of modern business cycles.

    World oil prices tanked in the 80’s regardless of Marc Lalonde. He merely became a convenient lightning rod for AB anger. Now the OPEC oligopoly is once again teaching us who sets oil prices. There’s not much Canada, the US or even Norway can do except tough it out.

    The conflation of historic national employment figures in the chart comparing AB employment data is misleading. The chart would be better aligning AB employment with world oil prices.

    Meantime AB is cranky but very rich, ON is licking wounds and will probably continue to do so for another 10 years no matter what political party has the reins. Manufacturing will continue to suffer due to NAFTA’s incentive to move manufacturing to Mexico or see massive state intervention by provincial and federal agencies giving tax incentives (read “no taxes”) or even outright grants to private sector shareholders / companies from the pockets of Canadian taxpayers.

    We’re all Canadians and we’re all in this together because one day the sun won’t be shining on our particular backyard and that’s when Canadians and the Nation pick up the slack.

    What the Corporations want is powerless nations. If they succeed their responsibility is to shareholders never citizens of Canada or even the US. Never forget that.

    • If you want the tug-of-war to stop, we have to revamp equalization, and reduce the barriers to interprovincial trade. There needs to be incentives that force provinces to adopt economic policies that are designed to reduce their reliance on equalization funding. When provinces go for decades without contributing economically to Confederation, while being treated as equals when it comes to setting national social and economic goals and frameworks, it belittles the efforts of those regions, right down to individual taxpayers, who have made the choices to be net contributors.
      A simple addendum is all that is required. Maybe provinces that receive equalization funding should be required to take steps to reduce public expenditures after five years. Spending and tax reductions can go a long ways towards attracting and keeping businesses in any region. Further to that, only those provinces that are putting money into the equalization pool should have a say as to the funding formula. That’s basic fairness at work.
      As it stands, by giving the takers a place at the table, we ensure that no one has any incentives to get off the equalization gravy train. Instead, we perpetuate a bizarre situation whereby provinces that have pursued winning economic policies inevitably sentence their own citizens to a second-class status by dint of the ability of so-called have-not provinces to impose onerous taxes on those who have no electoral recourse against them.
      It will take an act of courage by a premier of a have-not province to stand up and put the national interest ahead of regional by declaring the current equalization sufficiently damaged as to require a serious overhaul that quits being punitive to those regions that pursue stronger economic policies.
      I suspect that is only a pipe dream, as the new wave of Liberal governments across the land appears dead set on maintaining the current course heading with even more steam in the boilers.

      • Bill,

        If you want to improve the country, one action more than any other would see to it that governments finally stop spending our money on pandering. here is what you do:

        No one who has not paid income taxes; or who has not graduated from at least High School is allowed to vote. (exceptions of course, for stay at home parents with a working spouse)

        If we get rid of the franchise for parasites that only vote out of selfishness…..the country would be much better run.

        Of course, that pretty much guarantees the demise of the NDP.

          • Tresus,

            I see you are one of those folks who mistake education, for intelligence.

            As someone with multiple degrees, I can tell you my experience at University pretty much proved the opposite of what you believe. I met all sorts of folks who were getting a degree, or already had a PHD. Many of them were simpletons who believed what they were told, or what they were reading. The majority of them were incapable of coherent, critical thinking skills. (granted, these were mainly in the “elective” classes I was forced to take to be “well rounded”).

            A great many of the biggest fools I met, were the professors.

            so we could paraphrase your link thusly:

            The more USELESS education you have, the more likely you are to vote Liberal. The more worthless your degree….the more likley you are to vote Liberal. If you wasted your time getting a degree in Science, math, business, Accounting, etc…..the more likely you are to vote Conservative.

            there…thought I’d clear it up for you.

          • “I see you are one of those folks who mistake education, for intelligence. ”

            Ah, no. “who has not graduated from at least High School”

            http://www.livescience.com/18132-intelligence-social-conservatism-racism.html

            “The more USELESS education you have, the more likely …..etc., etc,”

            You appear to be making the best of a creative writing degree, but sadly you just made that all up.
            However we do know that the more religious you are, the more likely you are to vote Conservative and conversely the more religious you are the less likely you have a STEM degree.

          • tresus,

            I am an athiest. My degree(s) are in Accounting/Economics and Finance.

            Some of my electives included Poly-Sci, English, and Anthropology. The “non-math” classes seemed to be the ones that dimwitted folks choose as their major.

            I never took the “womyn’s studies” classes, but I did have to walk by the lounge area where these students waited prior to their education in victimhood. Never seen so many birkenstocks or underarm hair in my life. The sterotypes really fit to a T there.

          • Sadly, making claims about yourself and your experience on the internet doesn’t change the fact that the less educated you are the more likely you are to vote Conservative. Or the fact the more religious you are the more likely you are to vote Conservative and the less likely you are to have a STEM degree.

        • I would go a step further, Jim, and not allow the public sector to vote based upon conflict of interest guidelines.
          Municipal employees would not be able to vote in muni elections, provincial employees would not be able to vote in provincial elections, and federal employees would not be allowed to vote federally.
          I would also enact legislation that bars public sector unions from any activities not directly related to their workplace. The money that unions spend on political activism is originally confiscated from taxpayers, then confiscated from union members. Those public unions also enjoy financial supports for their management in the form of automatic check-off of dues, and the retention of pay for union members doing union duties while on the taxpayers time card.
          Given that the majority of union activism is directly opposed to the best interests of their customers (taxpayers), then there is no reason that it should be subsidized by private sector workers and taxpayers.
          The only expenses that a public union should have is their own administration. Any politically driven activism funded by union dues is nothing less than outright theft.

          • Now there’s a guy with contempt for democracy who’s at least smart enough to ban other’s supporters (though that’s an admittedly low bar to get over).

  4. Ever get the feeling we’re actually living in a cartoon and Mickey and Minnie turn on their TV every Saturday morning and laugh at us ? It’s going to get funnier……..

Sign in to comment.