The oil crisis in Alberta is taking its toll on other sectors in the provincial economy and with 2018 coming to an end, there is some mixed messaging surrounding economic recovery.
Confidence in Alberta business is tanking, according to the Canadian Federation of Independent Business (CFIB).
“I don’t think that level of optimism is there. We have a lot of angst and frustration among the business community,” said CFIB Alberta director Amber Ruddy.
The latest monthly survey by the CFIB found small business confidence had a steep fall with Alberta entrepreneurs feeling the least optimistic in the country.
The survey is based on findings from 709 responses from a random sample of CFIB members. Confidence is measured on a scale between zero and 100, with an index level between 65 and 75 considered normal. In Alberta, the index fell to 45.1.
“Small business confidence is taking a steep tumble at the moment,” Ruddy said. “I think until we see some of these positive policy measures that a government can bring forward, we’re not going to see that uptick in confidence, especially as the oil and gas sector is very fragile right now.”
The concern is being felt by business owners like Nicholas Russo.
Russo has owned and operated Per Noi Strength and Conditioning on Edmonton Trail for the past three years, and said he’s seeing an increase in businesses shutting down not only in the area, but in the strip mall he operates out of too.
“Places are just leaving. You see them one day then the next day they’re gone,” Russo said. “It’s kind of scary because when you think about it, I’m a new business. I’m trying to help people. What’s going to happen to me?”
Meanwhile, the Alberta government is painting a different picture.
According to the province, Alberta saw strong recovery in 2018 — the second straight year leading the country in economic growth.
“Alberta’s economy is creating good jobs across sectors and we’ve seen new opportunities for entrepreneurs,” said Deron Bilous, Alberta trade and economic development minister, in a statement. “We’ll continue to support diversification through targeted investments that support businesses and communities across the province.”
The provincial government pointed to the more than 58,900 jobs created in 2018, as well as the unemployment rate dropping a full percentage point to 6.3 per cent.
The mixed messaging is creating some confusion in the business community, but one expert believes the disconnect stems from the fact that recovery has been sporadic.
“What we’re seeing is that social assistance case loads are at all time highs, and the duration of unemployment is much higher than it used to be,” said Robert Kneebone, an economics professor at the University of Calgary. “So this is indicating that although there is recovery going on, for some people there is no recovery at all.”
Kneebone said the provincial government is now facing the challenge of trying to sell Alberta as a great place to invest while balancing the message nationally that Alberta is hurting and a pipeline is the necessary fix.
“They’re trying to balance these two stories,” Kneebone said. “The only thing a government can do is to provide good government services and keep taxes as low as possible, given the need to finance those government services.”
Back at Per Noi Strength and Conditioning, Russo is staying optimistic. He said he’s keeping his costs low so he can keep doing what he loves.
“I’m trying to stay positive and I will stay positive, but you never know.”