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Varcoe: Alberta's economy brightens, but 'very few opportunities' for Calgary's jobless


Another day, another positive prediction comes for the recovering economy of Alberta.

It looks mostly sunny, with only a few clouds – hello pipeline delays – spotted on the horizon.

But when do the jobs come back in a deluge?

I do not want to be the man who always looks at the glass that is half empty, but this remains a crucial question for thousands of Albertans, with disturbing pockets of higher unemployment occurring among younger men and in places like Calgary.

"It does not get any worse, but it does not get any better," said Parth Ramanuj, a 28-year-old electronic and communications technician who moved from Toronto to Calgary four years ago and has been unemployed since June.

" When I came here in 2014, it was not so bad, there were a lot of jobs and you could apply, interview and get one according to your qualifications. Nowadays there are very few possibilities." [19659002] One anecdote does not make a trend.

But it does not detract from the harsh reality of 167,000 unemployed Albertans such as Ramanuj who need a payment check and problems to secure the work.

To be honest, Alberta's employment schedule has improved considerably since the recession ended.

During the recession, the unemployment rate rose from 4.4 percent in November 2014 to nine percent two years later. In August, the province's unemployment rate was 6.7 percent and in that month 16,000 jobs were created.

Employment in Alberta grew by 53,000 per year, mainly in full-time work, Statistics Canada

noted. Nothing to smell.

However, Calgary's unemployment rate increased to 8.2 percent in August – 73,000 were unemployed – the second highest in Canadian cities, lagging behind only with St. John's, NL

and Alberta's youth unemployment rate was 11.8 percent, almost a full point above the national average.

During a speech in Calgary on Thursday the deputy chief economist of TD Bank Group said that the economy of the province & # 39; home & # 39; will return to a fully recovered position next year, after the two-year recession caused by the collapse of oil prices in 2014.

The bank expects gross domestic product to grow by 2.4 percent this year and by about 2 percent in 2019.

(On Wednesday, a report from Royal Bank with the forecasted economy of Alberta will increase by 2.5 percent this year and next year, with stronger oil prices "to keep the recovery on course." Recently, BMO predicted comparable rates.)


Derek Burleton, vice president and deputy chief economist at TD Bank.

Chris Young /

THE CANADIAN PRESS

In his speech, TD & # 39; s Derek Burleton mentioned eight reasons why he is optimistic about the economic future of the province.

On the energy side, strong global demand for oil and declining operating costs for petroleum producers are helping to improve profits, while the US Gulf Coast is hungry for heavy Canadian crude oil as Venezuelan production craters.

Alberta sees more energy diversification with new petrochemical projects and the potential green light from Shell's $ 40 billion LNG Canada project from the BC coast would provide a much needed injection to the ailing natural gas producers.

Outside the oil painting, & # 39; nascent power & # 39; seen in industries such as tourism, food production and technology. The population of the province continues to expand and remains relatively young and well educated.

Finally, Alberta has a favorable tax situation compared to other provinces, although large budget deficits remove part of the benefit.

That's the glass half-full viewpoint.

Despite these positive forces, Burleton does not expect a sudden increase in the number of employees, with reference to lagging capital investments such as Achilles' heels & # 39; from the province.

Upstream capital expenditures for oil and gas are projected to be around $ 24 billion this year, far from the $ 60 billion witness during the high flying days of US $ 100-a-barrel oil earlier this decade.

He sees Alberta's unemployment not dropping below six percent until 2020

" It does not appear to be a heroic recovery," Burleton said in an interview.

"It is volatile, we see unemployment still falling as the recovery gradually increases, but it does not go back to where it was in 2014.

" And we see it Do not even go back to, in our view, a sustainable (level) in the longer term until 2020 – a and that will be four years after the start of the recovery. "

It will be difficult to see a significant increase in the consumption of the oil population in 2019 in view of the headwind for the sector, from a sharp discount on Western Canadian heavy oil prices to the persistent delays in the Trans Mountain and Keystone XL pipeline projects.

The discount for Canadian heavy oil passed US $ 30 a barrel earlier this week, before closing Thursday at US $ 29.04.


The central processing facility at the Long Lake Nexen oil sanding facility

Nexen

Big-ticket oilsands projects that have invested largely in this decade, although Nexen began working this week on an expansion of $ 400 million in the development of Long Lake.

Tim McMillan, head of the Canadian Petroleum Producers Association, pointed out that spending on oil spares has dropped in 2018, even with stronger oil prices.

" is remarkable that we have $ 70 oil and a Canadian dollar that is in the 70 cent range … and we're still not seeing a rebound in Canadian investment, "said McMillan, who attended Thursday's lunch.

"So much of the jobs we have lost here is about the growth (side), the development teams and technical teams to develop new projects, which we have swept from the board because we have no new projects in the future. "

The bottom line is that the province is in the growth mode again, but it is at a moderate pace. Many sectors are marching ahead, although challenges in the short and medium term such as pipelines can not be ignored.

We must also remember that the economy is in transition and that there are still too many Albertans who do not expect work, even with sunny days.

Chris Varcoe is a columnist from Calgary Herald.

cvarcoe@postmedia.com



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