According to a recent statement from the Finance Minister of Alberta Joel Ceci had spelt out in no uncertain terms that the provincial government had been totally helpless in the face of unprecedented loss of employment where thousands of Albertans were out of job.
The dual threat of dwindling oil market and with the Fort Mcmurray wildfire earlier in May this year , the provincial government had been so puzzled, that they could not steer towards any hopeful direction where the economy could be saved from freefall.
The ongoing recession was going to hit third year and there was hardly any light to be seen at the end of the tunnel.
The reports of the financial update of first quarter this year for this rich province had already recorded a debt of 11 billion dollars which by the end of current fiscal year would be expected as high as 32 billion dollar.
Ceci, further added that the provincial government would try to create 10,000 jobs on sustained basis over next one year period of time, as against 50,000 jobloss over the past year, which considered by many as a futile effort, but was also viewed as an effort which was better than nothing.
There was no meaningful help trickled which had been promised by the federal government in the form of stimulus packages except an aid of 250 million
dollars came from Ottawa which in the current situation considered as titbits.
Even if the funds for infrastructure expansion was given and hardly there had been time to undertake the job since the construction season was on the verge of cessation.
The weeks of devastating fire in May at Fort Mcmurray cost Provincial government $495 million, pushing budget deficit to 10.9 billion dollars.
The situation went worse because during that time billions of dollar had been pumped out of the economy as a result of reduced investment in oil an Gas industry.
As a consequence not only the contingency fund created by the province during in its hey day would dry up by the end of this year, the government would start borrowing from market for its day to day financial transactions.
While the province had record of being debtfree until 2015, now it had to spend 1 billion dollar towards debt servicing costs by the end of 2016.
Under this circumstances the government could not foresee any balanced book until 2024.
While the plummetting oil price in international market attrubuted to the miserable economy of Alberta it had been further aggravated by the preposterous fiscal polices adopted by the provincial NDP Government, as alleged by the opposition parties.
According to them the economic situation would have been further worsened because of the imposition of carbon tax that would come onto effect from 1st of January 2017.
This new carbon tax in their view, would push price upward for all commodities from gasoline to electricity. In addition to that raising corporate tax from 10% to 12% and raising the slab of minimum wage to $15 an hour would act as a deterrant factor for economic growth.
Now, Statistics Canada's reports the investments in Alberta's housing sector had been declined by 30% since June 2015 to 641 million dollars.
It had so far been the lowest amount of money invested in housing sector since 2009.
Consequent upon these factors there had been a severe adverse impact on national economy too.
The report also pointed out this was the weakest quarter since the great recession.
The inflation adjusted real GDP had fallen at an annualised rate of 1.6% in the three months ended June 30, .the biggest decline since the second quarter of 2009.
Excluding the loss of crude oil output related to the fires, GDP throughout the rest of the economy grew a modest 0.4% annualised in the quarter, further deteriorated by broad based slump in goods exports as well as tepid consumer spending and continued weak business investments.
However, several economic factors needed to be included in the process such as ageing population, high household indebtedness and the ongoing economic rotation process, upon which reversal pace of acceleration would depend. Statistics Canada shellsout some hopes for Albertans in it's report
saying the economy was on the mend by end of the year.
This had to be watched with cautious optimism, and how fast Alberta could be back on reversal trend of third quater bounce back by averting the impact of
wild fires on oil production and could catch the pace of economic acceleration time has the best answer in store.
(Reported by Chandan Som)
Image: Wikipedia Commons
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