Dire start to 2016 for Albertans, Crown-owned bank predicts

EDMONTON -- Alberta's Crown-owned bank is predicting the first six months of this year will be the roughest yet in the current economic downturn.

See Full Article

ATB Financial is forecasting the petroleum industry will continue to shed jobs due to the unrelenting drop in the price of oil, with Fort McMurray and Calgary taking the hardest hit.

"We do see the first half of 2016 probably being the toughest months of this recession for Albertans," ATB chief economist Todd Hirsch said Thursday.

"We will see more contractions in the economy, we will see more layoffs and that will add to a heightened unemployment rate."

Hirsch said the provincial unemployment rate could climb to eight per cent from seven per cent by the middle of the year.

Alberta's unemployment rate in January 2015 was 4.7 per cent.

The ATB report forecasts weaker consumer demand for housing and retail products. It also says it is possible that more people will leave Alberta than move to the province.

Hirsch said the economy is expected to start turning around by the end of the year.

"By the end of 2016 we do see some of these heavy clouds of pessimism start to lift off the province, but the first half of the year will be tough for a lot of people."

The ATB report comes a day after Alberta's NDP government announced a freeze on the salaries 7,000 public sector managers for two years in the face of dropping oil and natural gas revenues.

The salary freeze is expected to save the province $57 million.

Opposition critics have called the measure a drop in the bucket when Alberta is forecasting this year's budget deficit to be $6.1 billion.

Hirsch declined to answer questions about the government's handling of the economy.

He said any jurisdiction that depends on petroleum revenues right now is suffering, including Saskatchewan and Newfoundland and Labrador.

Despite the gloomy forecast there are some pockets of optimism in ATB's economic outlook.

The report says other sectors of Alberta's economy, such as agriculture, forestry and tourism, are doing well, due in part to the weak Canadian dollar.

But Hirsch said even when measured together, their effect on the economy will not offset the steep drop in the price of oil.

"It is important to remind ourselves that there is more to Alberta's economy than petroleum, but we do have to bear in mind that the petroleum sector is the dog that wags an awful lot of tails in this province."



Advertisements

Latest Economic News

  • TransCanada: Over 24K gallons of oil recovered from spill

    Economic CTV News
    AMHERST, S.D. -- TransCanada Corp. says it has recovered more than 24,000 gallons of oil from the site of a pipeline leak discovered last week in South Dakota. The company said 24,450 gallons of oil had been recovered as of Wednesday. Source
  • Aurora Cannabis buying greenhouse designer Larssen to push pot partnership plans

    Economic CBC News
    Aurora Cannabis Inc. says it intends to use its ownership of greenhouse design firm Larssen Ltd. to pressure other cannabis producers to enter partnerships that will further its aggressive growth plans. In a news release, the Alberta-based cannabis producer said Larssen is involved with more than 15 cannabis industry clients globally, including five Canadian licensed producers, but the Canadian deals will be reassessed once the buyout announced Thursday is completed. Source
  • Canadian house prices 50% overvalued compared to rents: OECD

    Economic CBC News
    Canada leads the world in terms of household debt levels, and it's a major risk to the country's economy, the OECD says in a new report. In a chapter of a report set to come out next month that has been released in advance, the Organization for Economic Co-operation and Development says that while virtually all countries saw their debt loads increase in the years leading up to the credit crisis of 2007, most have seen their indebtedness decrease over time. Source
  • Uber hack latest example of why vigilance required to keep your wallet safe

    Economic CBC News
    When Doug Hoyes had his credit card information stolen, fraudsters used it to pay for three taxi rides in Toronto. He wasn't in that city, but discovered the charges while routinely checking his card transactions online and notified his bank, which cancelled the card. Source
  • Security alert: How vigilance can keep contents of your wallet safe

    Economic CTV News
    OTTAWA -- When Doug Hoyes had his credit card information stolen, fraudsters used it to pay for three taxi rides in Toronto. He wasn't in that city, but discovered the charges while routinely checking his card transactions online and notified his bank, which cancelled the card. Source
  • Canadian drug-maker accused of abusing market dominance

    Economic CTV News
    OAKVILLE, Ont. -- Britain's competition regulator is accusing Canadian specialty drug company Concordia International Corp. of overcharging for a thyroid drug after raising the price by nearly 6,000 per cent between 2007 and 2017. In a statement of objections, the Competition and Markets Authority is alleging Concordia abused its market dominance in the supply of liothyronine tablets. Source
  • Regulator investigating Sears Canada liquidation sale prices: monitor

    Economic CTV News
    TORONTO -- The Competition Bureau is investigating allegations that prices on some merchandise were marked up ahead of the liquidation sales at Sears Canada that began last month, the court-appointed monitor overseeing the retailer says. Source
  • Retail sales inched up in September, but only because of higher gas prices

    Economic CBC News
    Retail sales inched up 0.1 per cent to $49.1 billion in September largely because of higher prices at gas stations. Statistics Canada reported Thursday that retail sales were up in five of 11 sectors of the economy that the agency tracks. Source
  • Aurora Cannabis to buy greenhouse design firm Larssen, terms not disclosed

    Economic CTV News
    VANCOUVER -- Aurora Cannabis Inc. has signed a deal to acquire greenhouse design firm Larssen Ltd. Financial terms of the deal were not disclosed, but Aurora says it includes performance-based milestone payments. Aurora (TSX:ACB) chose Larssen to design, engineer and oversee construction of its Aurora Sky facility. Source
  • 'Nobody ever showed up': $35K spent on renovations that never began

    Economic CTV News
    An Ontario couple is trying to get their money back after they paid $35,000 in upfront costs for a home renovation that never even started because the owner of the business hired to complete the work sold it to another buyer. Source