Boom or Bust?

Alberta boom will bust unless energy cash saved

Alberta's boom will soon go bust unless the government starts saving more of its oil and gas cash, says a new report released Wednesday. The Parkland Institute, a left-of-centre think-tank based at the University of Alberta, says the government's failure to slow the boom has exacerbated an already overheated economy. "The Alberta government's mishandling of this boom has resulted in growing homelessness, skyrocketing inflation and an economy that is entirely vulnerable to the whims of the international energy markets," Diana Gibson, the study's author, said in a news release. Service Alberta Minister Lloyd Snelgrove said he has no intention of dampening the province's growth. "With the growth that we're facing, that's impossible at this time," he said. Snelgrove says he hasn't read the report and doesn't intend to. He said the government is moving to diversify the economy, including building a nano-technology sector.
(Calgary Herald 070510)

Report raises labour shortage fears

With Alberta's economy expected to lead Canada for years, the province's small and medium-sized business sectors have huge opportunities, if they can deal with growing and significant challenges that have national implications, according to a report released Wednesday. "The shortage of skilled and unskilled labour, particularly in the high-growth western provinces, poses a fundamental problem for competitiveness and Canada's longer-term prospects," said Aron Gampel, deputy chief economist with the Bank of Nova Scotia Wednesday. Gampel and the bank's head of small business, Kyle McNamara were in Calgary on Wednesday for the release of a report on the challenges facing small and medium sized businesses in Canada. Gampel noted the growing energy appetites of developing countries such as India and China mean heightened demand for Alberta's energy is not likely to abate anytime soon, and at the same time rising environmental consciousness is boosting demand for agricultural products used in biofuels production and the land crops are grown on. "The prices are up, not only for the commodities, the price of land, farm land has gone up," Gampel said. "Canada is going to do well and the resource-rich regions will continue to lead."

The result is that both Alberta's energy and agricultural industries can look forward to a rosy future, with the attendant effects on the Alberta economy. However, booming business is creating headaches for small and medium sized enterprises that are being limited in their ability to grow due to a shortage of skilled and non-skilled workers. Dan Kelly, vp for the prairies of the Canadian Federation of Independent Business, said there's no question small business operators are feeling pressures. "The boom really has been a mixed blessing for small and medium-sized firms," said Kelly. "Demand has really never been greater for almost any product or service. There's no problem finding customers . . . but our members are telling us often that the rising cost of wages and real estate have eclipsed their ability to take advantage of business growth." Alberta's jobless rate hit a historic low of 3.4% in 2006.
(Calgary Herald 070510)

Hmmm...I guess if the useless Stelmach government won't do anything to control this overheated economy, then standard market factors (inflation, lack of skilled workers, housing prices, you name it) will. And the provincial government will be left with nothing to show for it. Good for them!