Alberta Freezes Government Salaries As Canada's Oil Patch Enters Second Year Of Recession
On Wednesday, we documented the astonishing prices beleaguered Canadians are now forced to pay for groceries thanks to the plunging loonie.
Oil’s inexorable decline has the Canadian dollar in a veritable tailspin and because Canada imports the vast majority of its fresh food, prices on everything from cucumbers to cauliflower are on the rise, tightening the screws an already weary shoppers.
Soaring food prices are but the latest slap in the face for Canadians and especially for Albertans who have been hit the hardest by 13 months of crude carnage. Resources account for a third of provincial revenue and with oil and gas investment expected to have fallen over 30% in 2015, Alberta’s economy has is expected to contract for the foreseeable future.
The economic malaise has had a number of nasty side effects including soaring property crime in Calgary, rising food bank usage, and sharply higher suicide rates.
With the outlook for oil prices not expected to improve in the near-term, ATB now says the province faces two long years of recession. “The pain is going to be concentrated in the first half of the year. But we don’t really see any ending in sight to a downturn at least until the end of the year. So we are calling for another contraction,” ATB’s Chief Economist Todd Hirsch says in The Alberta Economic Outlook Q1 2016 report.
“This low price environment continues to discourage new investment and spending and has weighed down employment — not only in the oilpatch, but throughout most sectors of the province," Hirsch continues. "This downturn is longer in duration certainly than 2009 was which was a very quick downturn but very short-lived. This one is going to linger on longer."
Indeed. Here are some charts from the report which underscore the magnitude of the sharp reversal in fortunes.
It's against this backdrop that we get the latest sign of the times in Alberta where Finance Minister Joe Ceci has just announced a two-year wage freeze for non-union government employees.
"The move will freeze the salaries — and movement within salary grids — for roughly 7,000 senior officials, managers and other non-unionized government employees at 2015 levels until at least April 2018," As the Calgary Herald reports. "The freeze means senior government officials, including trade representatives, board chairs and deputy ministers, won’t get a scheduled 2.5-per-cent salary hike this April put in place by the former Progressive Conservative government."
“This is not a decision we made lightly," Ceci told the press. "The Alberta Public Service is made up of hard working and dedicated women and men who do valuable work each and every day in the service of Albertans. However, to maintain stability and protect jobs within the public service, we must deal with the economic realities we’re facing.”
As The Herald goes on to note, "the NDP government posted a record $6.1 -billion deficit in its fall budget released last October and, for the first time in two decades, is set to take on more debt to pay for operational spending."
"During a time of massive private sector job losses, Albertans want the government to reduce spending while protecting front-line services” Wildrose Leader Brian Jean said, praising the decision.
Right. But don't expect jobless Albertans to be overly sympathetic to the plight of the government employees subject to the salary freeze. The senior workers affected will all still make between $110,246 and $286,977.
Stay positive Canada...
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I'll have to head up there this summer. I have driven all over Alberta but never touched Saskatchewan. Thanks for the info.
It's probably still overpriced. Wait awhile until the depression sets in 1-2 years then you can buy at a reasonable land price there.
I see 1 and 2 bedroom condos in places like, for example, Canmore are still in the $400k to $600k range.
Crazy stuff.
Canmore is hardly a good example of common prices in Alberta. Canmore sits on the edge of Banff National Park, and development of any commercial or residential property in the park is very strictly limited. Canmore is therefore a go-to place for developers and for people from Calgary who want a weekend getaway place near great ski hills and fantastic outdoor settings in the Rocky Mountains. Buying pressure from Calgary and the limited number of spaces available leads to high prices for condos.
Brad Wall is good, and may possibly be the best hope for a "conservative" Prime Minister. However he too has his warts. Fortunately Lorne Calvert, and Romanow before him, did enough damage to cripple the socialists for a decade or two. In the end they all become crooks though.
Toonces, do not think i was belittling your country. fished upper Ontario many times and was always awed by Canada's VAST BEAUTY. You guys inhabit one of, if not the last, clean, wild, and great places left on this planet. KEEP FUCKIN LOVIN IT MAN!,,,,,,,AND WELCOME TO THE FIGHT CLUB.
sgorem, no worries. My post was not a retort to what you posted. I appreciate the link you posted and gave you a green ticky. I would not have found that nor thought to look for it had i not stumbled upon that post. Great site we have here. These sensationalist posts by a certain Tyler are starting to get on my nerves however. I'm not foolhardy enough to believe that things are all chips and gravy in Canada. But i live here, right next door to Alberta and know for a fact those grocery prices don't exist anywhere except for the most remote parts of Canada. And frankly i think it cheapens the value of this site because it propogates doom porn for ignorant click baiters who are truly ignorant of Canadas economy other than some fudged numbers they see on a screen and conclude its the gospel. This is by no means in reference to you and i appreciate your posts once again.
Too much scotch. It was Fuku Ben with the link. i'm sure you're a good fella too. Gnight folks. Thud!
+100 Excellent golf too. Elk Ridge. Dakota Dunes. Warman. Moon Lake. Love the province. Love the people.
More homework. You know I'm going to research trade ideas for good friends.
Do you want the numbers pre earnings, NON-GAAP? Would you like the EBITA numbers going back 4 quarters?
I live for this stuff. I'll do a nice anal rince on both of those companies.
You know NoDebt mentioned "free cash flow" yesterday. GMT -12 1'13
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Would it kill you to put a link up for this?
I'd love to see the doc.
It looks like it's good stuff, if it was tabbed.
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V-V
Better get ready Wynne, your provice is going down next. Should be Quebec, but they're too corrupt to fail.
You know, freezing government salaries is not good enough. They always go up, and get locked in. They should follow what happens to the taxpayers, or the market. After all, they are the decision makers that brought the ruin. Why should their salaries never take a loss when the SHTF?
" The senior workers affected will all still make between $110,246 and $286,977. "
'workers' ...LOL
90+% of the public sector would LOVE to have THEIR wages frozen @ $110K -let alone $287K !- annual WITH full medical & a fat guaranteed pension.
A large part of the problem with .GOV everywhere is the inability of the ciizenry who are on tap to pay for everything to trim the bureaucracy or curb their ever-inflating salaries and bennies...
See above...
More than likely this should be viewed as a good faith effort on "the managers" part, to be rewarded handsomely in their retirement, six months from now ;-)
Another reason to vote for Trump.
Every time I hear Hillary talk about expanding the gubmint and increasing the FSA, or raising taxes to pay for it, it makes my ass twitch!
Want to know what those workers are really worth? Every three years they should put the jobs out to bid to prequalified bidders based on the job requirements. The present job holder can bid on his/her own job also. AND, no government job should last more than ten years. You get turned back out to the private sector. And your pension is 401K, not a government pork pension.
I think it's only the non-union guys.
http://www.cbc.ca/news/canada/edmonton/alberta-freezes-wages-of-non-unio...
The term Public Service Unions is an oxymoron! (emphasis on the moron)
Tyler's! Where's ma link to the GOP Debates!?!?
On Fox Business for free's like:
http://www.foxbusiness.com/
Jeebus, what is Kasich doing?
Will need to ditch all overpaid govt workers at some point
https://www.youtube.com/watch?v=VKVjMbGfirs
Recession is coming to the rest of the world as well. Believe it or not... even to those people on ZH that are relishing with delight, at our demise.
We've had a good twenty years in Alberta. Been lucky to have had a business here and I remain thankful for that. (We mostly escaped the theatre of 2008.)
But as all good things do, it has come to an end.
To my friends and customers, I've been saying and will continue to repeat. 'Keep your money close.' You're gunna need it.
And may I say that to all of you as well!
+1 for the Red Green 'reference' & username - need a zinger avatar! : )
no talk of course of making Albertan government payrolls correspond to barrels produced or anything like that.
I see. Stimulus for Bay Street and Ottawa, courtesy of Steve Poloz and the Young Tapette.
Austerity for Socred country, courtesy of Alberta's new socialist overlords, who have an extra incentive to encourage Tories in high places in Edmonton to move on.
At least our masters didn't waste any time rewarding their friends and punishing their enemies. If Harper had moved that fast there might not be a Liberal Party today.
No wonder Justin moved fast on the Saudi arms contract. He owes the House of Saud big.
How will a family of two government workers survive on $180K?
They'll need to divest themselves of certain toys like, RV's, lakeside cabins, jet skis, snowmobiles, tropical time shares, Harley's, second home, atvs, etc etc etc
$180? More like $300.
Ho hum! Simply more phony delusional bloated central government posturing & rhetoric! The progressive marxist visionaries should take a page from the 'REAL' economy & private sector play book that is brutally slashing jobs & wages across the board to deal with the realities of Western Select Crude trading in the mid-teens. But that's the typical socialist bull shit nonsense we get fed in today's enlightened society ... 'temporary public wage freeze' ... 'reduce the pace of public service hiring' ... 'reduce the rate of bureaucratic spending' ... 'call upon the tax payer to shoulder more of the social burden' ... and all the while wringing their hands over climate change nonsense, decrying the ill effects of carbon, demonizing extractive industry, prohibiting or over-regulating pipeline development, & vilifying wealth creation! Serves the retarded voted and tax payer right for electing this parade of misfit incompetent losers!
Hey, Canadians were willing to give up their guns like the European sheeples so just suck it up and live with it. Perhaps those government workers will drop a few alms into your tin cups.
"Its insane, no one on the Moose List should be allowed to buy a gun! Its just crazy!" Barack Trudeau ;-)
Canada ranks 12th on the world list of guns per capita. at 30 per 100 residents, putting us well ahead of most of Europe's 51 countries.
Anyone who bet on a career in the oil patch/fracking, deserves to reap the consequences of thier short sightedness.
Oil & Natural Gas fracking is more of an American mal-investment
(as usual) phenomenon! Very little exposure in Canada!
Does ZH think this something new in Canada? Salary freezes affecting different groups over different periods of time in different jurisdictions, as well as freezes in hiring, occur pretty often in Canada (and I imagine elsewhere too). It's not wonderful for those affected but it's pretty manageable. It certainly not the apocalypse or a depression or cause for panic. Did ZH recently discover Canada and is making up for lost time? Sheesh
The 'not so wonderful effect' of 'freezing non-union public salaries' pales a tad in the face of beleagured corporations who are crashing & burning while slashing capex, investment & employment roles! I can only assume you are on the public dole in one form or another because the extorted bloated 'public trough' never contracts, downsizes, fires, implodes, recedes or depresses! However, this time it may be different and perhaps long overdue! We will then see how 'manageable' it will be for the public service deluded who will go through the same pain & suffering the private sector is currently enduring! There will be lots of 'Sheeshing' goin' on!
ZH had better pull that pic of the three hotties quick before a shitload of Muslims try to move to Canada. Oh wait
Decent size piece of land, check, log house and a barn, check, 4 acres of garden and grain, check, deer, moose, elk, grouse, bear, and geese on the land, check, rifles, shotguns, rimfires and a loading press, check... I'm ready to wait out the rough times ahead.
Salary freezes on 100K-200K salaries? My god, how will they live??
No pity for the Canada. They got fat by selling overpriced oil to the world.
And you got thin by not buying any and walking to school or work!
UNFUCK CANADA !!!!!!!!!!!
Only non-union salaries were frozen. Calgary had net job growth in 2015. Cauliflower is expensive everywhere thanks to Cali drought.
First of all the government isn't going to get too worried until the Trillion Dollar Handout from the US starts to run a little low. Might take a while here in Canada. Government salaries have been out of touch for years but then again they do help to produce inflationary effects by the disconnect. We are still paying top Dollar at the pump (as if crude were still 100 a barrel) so that rape hasn't changed. We are still taxed on everything we enjoy at close to 50%, like for example the LCBO (Liquor Control Board or should I say tax board). Making over 100K still makes very little sense unless you pay a very shrewd accountant to find write offs and then you are still llikely to be audited. You need to keep all those high paying governemt audit jobs for Revenue Canada so that you pay your fair share whether you think it is fair or not. By the way did the politicians vote to freeze their wages? What about their rosy pensions? What about high paying Not for profit jobs of executives? No? I am surprised. What about the housing bubble that our very own Politz says doesn't exist even though the IMF has homes overvalued by as high as 70% in some areas. What about the high levels of debt now that Carney (who ran off to the UK to solve their problems after creating ours) lowered interest rates to 0.50%. Infrastructure problems and a VERY painful crash. Hell no, its all normal. We'll just spend our way right out of it. Who said that?
If Revenue Canada were serious, they would tax some if not all the foreign money flooding into Canada buying multi-million houses with little examination as well as avoiding taxes ... the overpriced houses also price the locals out of the market at the same time.
You forgot to discount weather.
Kanukistan is beautiful, for an certain segment of Homo Sapiens [Warm blooded monkeys, with less hair]
I like the brazilian pics best.
The wage freeze will save Alberta $28.5 million over 2 years, what a fucking joke especially when you consider the deficit is over $6 billion.
This same government reversed $780 million in cuts and increase spend by $110 million last year to appease the civil servants that voted her into power.
The premier is union labour lawyer and a communist fucking bitch who has her head shoved up the unions asses! Alberta is financially fucked for the next 3 plus years under this government.
Need more Ralph bucks!
Open the borders, let the country flood with one million migrants per year. Their luxury problems will disappear.
canada needs to go on strike! get some of that internet money that obama is keeping for herself! eh! walk off! we are not your fwend bubby/girl.!
Okay, I agree there are too many government employees, they are overpaid for what they do, and they are untouchable mostly...but.
Are the same people union-bashing here also bashing the 1% for fucking over the country and world? Or have you achieved some sort of cognitive dissonance by which you can hate unions for no rational reason yet hate our Overlords for oppressing and exploiting us? Do you believe in the American Dream and therefore think unions are communist and a hindrance to progress and growth? Or do you believe the 1% will rape, pillage and shit on workers as much as they can?
But hey, don't let logic, compassion, and reality get in the way of a good vitriolic bashing of that good old commie in the White House, right?
Expat, I agree. Would you please skim my post above?