The Alberta economy is reeling but we in BC shouldn’t be secretly happy that the province is getting its comeuppance. When they hurt, we will too.
I don’t want to seem gleeful, which would definitely be schadenfreude, but oil-rich Alberta’s self-described exalted place at the head of the Canadian economy is fading.
Oil, the very thing that shot Alberta to the top and made it the template for the Conservative-led federal government economic policy, is no longer the gusher of money that it once was.
You see, as hope for a pipeline to the BC coast for resultant shipping to Asia grows ever smaller or far off in the future, Alberta is stuck with selling its oil at a huge discount to the U.S., or at best Eastern Canada.
Also, the U.S. is moving very rapidly toward energy independence. New fracking technology promises to make the U.S. less dependent on “foreign” oil, and will lower the price all around.
We’re already seeing the signs in Alberta of the fracking phenomenon which devastated BC’s natural gas industry by lowering prices to where it’s almost non-economic to capture gas.
Alberta’s recent deficit ballooned from an expected $900 million to $4 billion. Deficits in Alberta being as rare as socialists, one that hits $4 billion is a very loud wake-up call that the boom days may be over.
So, while it is difficult to shed a tear for a neighbour who has been continuously arrogant in its success, we should be empathetic and sympathetic.
Albertans see BC as their playground, the place many of them would really like to live. They spread quite a bit of cash here.
We’re joined at the hip in many ways. In particular, we too understand boom and bust economics.