The loss of almost 45,000 jobs over the first three months of this year has put to rest the notion, still widely held by those who haven’t yet lost a colleague or two, that Alberta would somehow sidestep this recession. In fact, this recession is looking increasingly like past worldwide contractions, in which commodity-based economies such as Alberta’s suffer the deepest and longest declines.
Other governments’ responses are to prime the pump in Keynesian fashion. Faced with a precipitous drop in the resources revenues Alberta uses for basic government services, the province has gone gently in the other direction, even deferring a number of “shovel-ready” health facilities it had announced in its $20-billion-plus capital plan. And Alberta will still probably have a record-breaking deficit — in the $5-billion neighbourhood — for 2009-10.
Fortunately, on the employment front, things aren’t as bad as they seem. The astonishing job losses may make their way into a surge in employment insurance applications (up by 62% in Calgary in January compared with a year earlier), but their numbers will be diminished by the time they join the welfare rolls. Alberta has a time-tested strategy for dealing with the unemployed: it gives them a nudge to, um, go home.
Alberta’s Minister of Employment and Immigration, Hector Goudreau, said as much in the legislature on March 16, referring to 57,000 foreign workers: “We need to recognize that the word ‘temporary’ is exactly what it says, and if it’s impossible for them to move into other occupations, then there’s an expectation that they should go home.”
Tory politicians have so far held their tongues from saying similar things about the much larger number of interprovincial migrants. Let’s just say they aren’t pleading with the Newfie-accented residents of Fort McMurray to stick around.
The same strategy has worked in the past. All through the 1990s, when energy prices were low, Alberta’s unemployment rate never surpassed 9%. If people were going to be unemployed, they might as well be so with family and friends around.
But there is a downside to shunning outsiders in tough times. In the short term, it exacerbates the swings in the housing market. The last time Edmonton home prices crashed, they took 25 years to recover. The strategy also goes a long way in explaining why, during the boom years, the Alberta capital was a hotbed of antisocial behaviour, from littering to violent crime. A larger than normal portion of its population consisted of the young and minimally skilled, with no social network to fall back on.
Alberta has to drop this work-camp mentality if it truly wants to move beyond the economics of resources extraction. Diversification tends to happen in the presence of labour and skill surpluses and proximity to markets, as well as when there is a surplus of capital and education infrastructure. Some of the biggest layoffs have come from engineering and construction companies; the laid-off engineer or skilled tradesperson is an ideal candidate to start up a non-traditional business unaffected by commodity cycles. But if Alberta doesn’t work harder to make such people feel welcome when jobless, they’re likely to go “home” to do it.
Alberta not only needs to attract people during the boom times (ideally, for more reasons than job opportunities), but to hold onto them in the busts if its economy is to mature. To take the edge off this and future downturns, Alberta needs to feel more like home to newcomers. IE
A real home on the range
Alberta needs to work harder at retaining laid-off workers
- By: Michael McCullough
- May 5, 2009 October 29, 2019
- 09:12
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