Kelowna was also ok on the surface at 9.4% unemployment. My wife felt the wrath of that 9.4%.
Oh, for sure. Alberta is struggling, but things could be far worse. We didn't burn the civil service to the ground, meaning unemployment numbers are better than they would have been had we had both sectors murdered. Just because the oil business is struggling doesn't mean we have less demand for public services - in fact, in many cases, demand is higher. Heath care demands often rise during recessions, etc.
What we need to understand here is that we built an economy based on $100/bbl oil - and low/no taxes. By cutting tax rates during booms, it crippled the future as there was no buffer for when things would fall off. And people here honestly thought $100+ oil was the "reality forever." I was laughed at whenever I suggested that $40/bbl oil was not only possible, but probable given the goings-on in terms of the world market and lack of demand growth along with the push for growth in renewable energy. "Ya dunno what yer talkin' bout - China and India need oil at a rate that means $200/bbl oil is coming, not $40/bbl!"
The oil business is very important here - but it needs to built around a model of $40-50 oil, not $100-200 oil.
The conundrum now is how to recover both the private sector and public environment. Without the windfall taxes from those boom years, we are broke and can't repair the crumbling infrastructure or provide public services. But, if we don't keep rebuilding the infrastructure or keep our public services, we become a poor place to do business. Businesses look at WAY MORE than taxes (contrary to popular belief, and this has been studied) - they look HARD at quality of life, because high-quality employees are much more concerned with that then the income tax rate. Is there schools and roads and good health care and an arts community? Community recreation centers? A vibrant community is more important than a 1% difference in tax rates.
There's no obvious solution. Slashing government spending might balance the budget, but sacrifices the future of the province. Keeping spending high will increase the debt, but for now, Alberta still has the lowest debt load in Canada, but we can only do this for so long. We need the economy to bounce back enough that we can increase tax revenue to control deficit spending - but this is probably going to involve a combination of a PST and corporate taxes - dirty words in Alberta. Albertans want an awesome province with amazing infrastructure and modern education and health care, and on and on, but want to pay no taxes and have been brainwashed to believe that oil royalties and corporate taxes mean that the entire province becomes unemployed overnight. Ugh.
We saw this coming. A lot of economists did. Papers were published SCREAMING it. No one believed it. Trickle down BS.
