The Alberta unemployment rate hit 7% last month – the worst rate since the recession of 2008. Low oil prices are to blame for the damage being done to the provincial economy, with the energy sector accounting for roughly 25% of Alberta’s GDP. According to the Calgary Herald, the drop in prices is expected to lower provincial growth this year by 3%. Alberta’s oil sands industry is facing one of the toughest markets in years, and the drop in global crude prices is producing a ripple effect across the province.
Staff Writer: Alexia Agouridis
Job cuts are one of the largest issues arising from the falling crude prices. According to Statistics Canada, more than 15,000 jobs were lost in November alone. The majority of these jobs were based in the energy sector and related areas. Fort McMurray residents are fleeing, leaving behind higher living costs of food, housing, and other necessities. Calgary, a city that once held some of the lowest unemployment rates in the country, is now facing massive cuts in spending and hence, rising unemployment.
Unemployment is steadily rising for Canadians in their prime working years of age 25 to 54, forcing many recent university graduates to switch career paths or seek employment outside of the province, especially those based in energy, oil & gas, and petroleum. Even unexpected areas of employment, such as the Calgary Stampede, are seeing cuts, leaving the city in a “funeral-like” atmosphere, according to Mayor Naheed Nenshi. The impacts of the energy crisis can be seen through closed restaurants, empty offices, and lessened traffic in the cities within the province.
A worrisome trend in Calgary that police are attributing to the economic slump is increased crime and drug use. 2015 saw doubled commercial break-ins compared to 2014, a 65% increase in bank robberies, and a 52% increase in home invasions, according to Calgary Police Service data. The Alberta housing market has also declined this year, and is expected to continue declining into 2016.
While the aforementioned factors are daunting, it is predicted that the province will begin recovery in the latter half of 2016 when job cuts slow. This crisis has many residents, especially recent grads, in tremendous panic, yet it is important to remember that crises like these have occurred in the past and have been recovered from. The province will eventually recuperate.