Business owners hoping for a reprieve from the economic downturn were disappointed to discover oil
prices had dropped below $40 a barrel for the first time since 2009.

Layoffs in the oil and gas industry have been commonplace in 2015 and the ripple effect has reached the retail and service sectors.

At Caesar’s Steakhouse on 4 Avenue Southwest, lunch business is down approximately 20 per cent.

Constantine Giannoulis, one of the owners of the restaurant that opened in1972, has been told by many of his regular customers that their companies are cutting back during these tough economic times and expensed lunches are a thing of the past.

Giannoulis says he’s been through economic downturns before and feels there’s no need to panic.

“We’re concerned,” admits Giannoulis, “but it’s like a storm that’s going to go through and then go back to normal again.”

“We don’t believe in cutting down prices or changing the menu because our menu has (been the same) since day 1 and the people they like it.”

According to ownership, the prices at Caesar’s have not increased alongside the recent jump in the cost of beef and they are eating the reduction in their profit margin.

Outside of downtown, the outlook isn’t much rosier and some restaurant owners are taking drastic measures to compete.

In an attempt to attract customers, Tony Nicastro has slashed menu prices at Nicastro’s Public House on Centre Street North in Tuxedo Park

“Since January, some of the beef prices have been up, upwards of 40 per cent increase,” said Nicastro.

Nicastro, who has been in the industry for 25 years, says his business is down approximately 15 per cent this year and this downturn feels different than those he’s previously encountered.

“In (2008), we felt it was a little bit easier to deal with,” said Nicastro. “This time around, there’s a lot of uncertainty with the new NDP government talking about a tax increase, talking about that minimum wage going up, food prices have gone up 40 per cent. We didn’t see that in ’08.”

The restaurateur sees opportunity in difficulty times and believes an aggressive approach will set him ahead of the competition.

“Typically, what recessions do is they clean out the system,”

Premier Notley says the plummeting price of oil will not change the government’s stance on corporate taxes.

“Alberta still has, by far, the most competitive tax regime in the country,” said Notley. “When times get tough, those who are profitable should be paying just a little bit more."

“The corporate tax is on profits, it’s not on losses. If company’s struggle, their corporate taxes will go down.”

Todd Hirsch, chief economist with ATB Financial, says Alberta business owner may need to come to terms with the new economic reality.

"These oil prices are not likely to recover anytime soon," said Hirsch. "That does put the province, and it puts Calgary, in a different situation, contending with lower oil prices for a prolonged period of time."

"I think we are looking at very, very weak growth, if not modest recession, in 2015 and probably only a modest recovery in 2016."