BCBusiness

34 BCBusiness May 2015 TOURisM caLgaRy (TOp LEfT) A lberta, you probably think this story is about you. And true, to an extent it is, but far be it from us to focus on another's misfortune. No, here in B.C. we're known for our mindfulness and empathy, so let's get it out there right now that we experienced exactly the same scenario three and a half decades ago, with our forest industry. But enough about us. Let's talk about you. In the bare few months since the price of oil was slashed in half, gosh have there been some things going down on your side of the Rockies. Like layoffs that already number in the tens of thou- sands, and which will be followed by tens of thousands more, all along the supply chain. Projects are being cancelled, delayed or scaled way back, and sup- pliers asked to slash costs. Worse, lots of projects become unprofitable if oil falls below about $40, so if prices drop a little further the hurt will intensify exponentially. In the face of this, your vaunted population growth has slowed significantly, and B.C. is currently enjoy- ing the biggest influx of Canadians in several years, largely due to the return of people working in the oilpatch. During February, for example, condo sales in Calgary dropped 40 per cent compared to a year earlier while active listings increased by 105 per cent—and this at a time when both Toronto and Vancouver continued to enjoy strong markets. An office space glut is also building, and projects are being can- celled, whereas in Vancouver developers are press- ing ahead with almost a dozen new towers. This sort of thing isn't good for the provincial bottom line, needless to say. Wrestling with a massive reduction in petroleum revenues, your government has warned that the budget defi- cit in 2015-16 (your eighth in a row) could reach as high as $5 billion. Meanwhile, there's this other province just a little west of you that expects to eke out another small surplus. Add it all up and, according to most eco- nomic forecasters, it's likely that you will enter into recession this year. The Conference Board of Canada, for example, predicts a contraction of 1.5 per cent compared to an expansion of three per cent for us. dear Alberta, As you mAy be AwAre, there's a province in our dominion whose reliance on a single resource industry has made it rich beyond measure. Thanks to this industry, which accounts for a huge proportion of the Gdp and workforce, the province has vacuumed residents from every other canadian locale while making its citizens much wealthier than other canadians and in fact among the wealthiest in the world. True, the industry has rendered the province a little too sensi- tive to economic cycles and has turned it into something of an environmental pariah, but those are trade-offs that almost everyone has been willing to make. indeed, this is a very happy place±except that, uh-oh, that industry has just fallen off a cliff and is about to take the province with it. we're known for our mindfulness and empathy, so let's get it out there right now that we experienced exactly the same scenario three and a half decades ago, with But enough about us. Let's talk about you. In the bare few months since the price of oil was slashed in half, gosh have there been some things going down on your side Like layoffs that already number in the tens of thou- sands, and which will be followed by tens of thousands more, all along the supply chain. Projects are being cancelled, delayed or scaled way back, and sup- pliers asked to slash costs. Worse, lots of projects become unprofitable if oil falls below about $40, so if prices drop a little further the hurt will intensify In the face of this, your vaunted population growth has slowed significantly, and B.C. is currently enjoy- has slowed significantly, and B.C. is currently enjoy- has slowed significantly, and B.C. is currently enjoy ing the biggest influx of Canadians in several years, listings increased by 105 per cent—and this at a time when both Toronto and Vancouver continued to enjoy strong markets. An office space glut is also building, and projects are being can celled, whereas in Vancouver developers are press ing ahead with almost a dozen new towers. This sort of thing isn't good for the provincial bottom line, needless to say. Wrestling with a massive reduction in petroleum revenues, your government has warned that the budget defi cit in 2015-16 (your eighth in a row) could reach as high as $5 billion. Meanwhile, there's this other province just a little west of you that expects to eke out another small surplus. Add it all up and, according to most eco nomic forecasters, it's likely that you will enter into recession this year. The Conference Board of Canada, for example, predicts a contraction of 1.5 per cent compared to an expansion of three per cent for us.

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