Economy

Deep cuts will smother Alberta’s fragile economic recovery

If you want to really know what impact $2 billion in cuts will have on Alberta, you have to look at those cuts in the context of the overall provincial economy and labour market. When you do that, it becomes clear that now is not the time for the government to even contemplate deep cuts and lay-offs because they would only serve to make a bad situation worse.

In early January, Statistics Canada released year-end employment figures for 2009 – and they paint a picture of an Alberta labour force that is still hurting even as the provincial economy begins to show signs of recovery from the recession.

“The recovery seems to be coming, but Albertans are still hurting and the provincial labour market is still very fragile,” says Gil McGowan, president of the Alberta Federation of Labour.

“The positive news in this report is enough to suggest that the Alberta economy - and along with it, provincial government revenue - will likely return to health sometime this year. But the negative news is enough to suggest that the government should think long and hard before introducing budget cuts that will throw thousands of nurses, teachers and other public sector workers out of work. “

78,000 full-time jobs lost since end of the boom

The latest statistics show that Alberta’s unemployment rate was 6.7 per cent in December, 2009, down from 7.4 per cent a month earlier. Although small month-over-month improvements are always welcome, comparison over the year, and with October 2008 – the peak in Alberta’s boom – are quite sobering.

Just how bad have things been in the Alberta labour market since the boom went bust? Consider the following figures:

• Since December 2008, Alberta's population has grown by 71,600, but the number of people with jobs has dropped by 28,600. The number of Albertans with jobs has fallen even more dramatically when you use October 2008 as your point of comparison (-44,700)
• The number of Albertans with full-time jobs has fallen even more precipitously. There are 52,400 fewer Albertans with full-time jobs today than there were in December 2008 - and 78,100 fewer than there were in October 2008
• The hardest hit sectors include forestry, mining and oil and gas (down 29,000 jobs compared to December 2008); manufacturing (down 38,600 jobs since October 2008); professional, scientific and technical services (down 24,800 jobs since October 2008); and construction (down 17,100 jobs since October 2008)
• Over the course of the past year, Alberta is second only to B.C. in the number of jobs lost as a proportion of its provincial labour force

Don’t make a bad situation worse

“What all of these numbers tell us is that we are still a long way from a full recovery,” says McGowan. “The last thing we need now is for the provincial government to smother the beginnings of the recovery with massive job and spending cuts before it even has a chance to take hold.”