In what’s become a theme, Canadian consumers almost everywhere are showing a surprising degree of confidence, driving impressive amounts of sales at stores, including those owned by Canadian Tire.
Everywhere, that is, except Alberta.
“It is clear that Alberta is going through hard times right now,” Michael Medline, chief executive of Canadian Tire, said on a conference call Thursday afternoon.
Dragged low by the crash in oil prices, the country’s heretofore economic workhorse is mired in a worsening slump that’s seen a chill creep into everything from truck sales to restaurant visits.
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The latest provincial outlook from BMO Capital Markets this week suggests Alberta’s economy will shrink 1 per cent this year in a sharp reversal from a growth rate of 4.8 per cent in 2014—head and shoulders above other provinces.
“The slide in oil prices is having a significant negative impact,” BMO economist Robert Kavcic said.
Booming elsewhere
Yet elsewhere, shoppers are as confident as ever—perhaps more than ever.
Auto sales are on pace to break records this year nationally, while retail sales in general are trending higher despite sluggish employment and mediocre economic growth.
‘The rest of Canada is more than making up for what’s going on in Alberta’
“What we’re seeing in the province of Ontario, through consumer behaviour … are extraordinary results that I have never seen. Quebec, which had been lagging, is doing very well. And B.C. is booming,” Medline said.
“I wish Alberta was doing better, but the rest of Canada is more than making up for what’s going on in Alberta.”
The comments help solidify a picture where British Columbia and Ontario— aided by soaring housing markets and the confidence boost that brings – are reemerging as the country’s economic leaders this year alongside Quebec.
Economic growth in Ontario is expected to outperform the national average this year for the first time in more than a decade, posting a gain of 2 per cent compared to the national average of 1.2 per cent (dented by Alberta’s drop and the mild recession through the first six months of the year). B.C. is expected to post growth of 2.3 per cent, BMO’s Kavcic said.
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Canadian Tire, one of the country’s largest retailers and owner of Mark’s Work Wearhouse, which caters to resource workers in Alberta and elsewhere, expects shoppers to continue dialing back in the near-term. But Medline said he is confident in the energy sector’s ability to bounce back.
“After different points in the cycle, different regions do better than others,” the Canadian Tire exec said.
WATCH: Many local companies are either cancelling holiday events or downsizing drastically, as businesses from restaurants to event planning companies feel the pinch. Reid Fiest reports.
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