As the NDP enters the midway point of its first term in government, there are signs the economy is starting to turn around, and a hope it will lead to a rebound for Alberta’s bottom line.
The party took power just as the province was heading into an economic storm not seen in decades. Due to a supply glut, the price of oil was in free fall, and thousands of Albertans were laid off as oil companies looked for ways to cut spending.
In 2015, Alberta’s GDP retracted 3.5 per cent, and fell a further 2.8 per cent in 2016. This was the first time since the early 1980s that Alberta saw two straight years of recession.
This economic free fall also opened up a giant hole in the government’s revenue stream. Finance Minister Joe Ceci’s first budget had a deficit of $6.4 billion, and last year’s budget deficit sits at $10.8 billion.
In an effort to stabilise the economy, the government has borrowed billions of dollars to invest in infrastructure projects like new schools, and has increased funding in areas like health and education to maintain public services.
All this spending is sending Alberta’s debt soaring. At the end of this fiscal year, Alberta will be around $32 billion in debt, reaching nearly $60 billion by the time the next election rolls around in 2019.
The finance minister admits his 2017 budget will once again be in deficit, but he has repeatedly said there are positive signs in the economy.
Most economists agree Alberta will see economic growth this year, the government is forecasting that growth to be around 2.4 per cent. While the price of oil has dropped back below $50 per barrel this week, it has for the most part remained steady since falling below $30 per barrel in early 2016.
After bottoming out last summer, employment numbers are on the way back up, albeit slightly. In the past three months, the province has added 8,500 jobs, including a solid gain in full time employment in February.