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Has Alberta moved from recession to depression?
Published Friday, April 22, 2016 5:18PM MDT
Last Updated Friday, April 22, 2016 7:21PM MDT
For over a year people have been using the word recession to describe Alberta's oil industry but now a respected economist and analyst says it's worse than that.
ARC Financial’s Peter Tertzakian sat on the province’s Royalty Review Panel and says Alberta’s biggest industry has passed the recession stage and is now in a depression.
Tertzakian spoke to the Business News Network on Friday morning and said even if oil prices jump this year it won't change things anytime soon.
“There’s still very limited cash flow. It’s dried up for the producers, which means the service companies take it on the chin doubly hard. The price, even if it goes back to 50, 60, we’re still going to have to wait until the activity starts to kick in so unfortunately the service industry, not only here but globally, is really in a state of depression,” said Tertzakian.
He says 2016 will bring billions in spending cuts and countless other cost saving measures, which will mean more job losses in a province that's already seen 40,000 people, directly employed by the oil business, lose their employment.
Terrance Jerome has been going down to Calgary’s ‘Cash Corner’ for over three decades and has seen Alberta’s economy go through good times and bad.
“Right now it’s extreme and you’ve got to have lots of experience in basically whatever you do,” said Jerome. “When there was no recession, there was people making $30 to $35 an hour off this corner and it was just no problems. Just these last few years, it’s been, slowed right down. There’s just not enough work for everyone who comes here.”
Courtney Hare works for Momentum and helps people take control of their personal finances and secure employment. She says her organization has seen a steady increase for its services recently.
“We have seen an overall increase of about 35 percent in all of our programs overall and very specifically, we’ve seen an increase in our trades training program demand so for example, for 75 spots we had available for trades training, we had a thousand applicants. And for our self-employment programs, business development programs, we’ve seen about a 22 percent increase in participation,” said Hare.
Hare says the downturn in the economy is a good opportunity to retrain or enhance skills so that people are prepared when the economy recovers.
Alberta Premier Rachel Notley was in Calgary for a speaking engagement on Friday and ducked reporters when they tried to ask about the government’s plans to deal with a worsening situation in the oil patch.
(With files from Kevin Green)