Alberta’s economic contraction this year will be the most severe the province has ever experienced in a single year and the largest in Canada, says a report by RBC Economics.
The report said that contraction will be a whopping 5.6 per cent.
“The collapse in oil prices will be another massive blow to oil-producing regions of the country—most of which had not fully recovered from the previous collapse in 2014-2016. It will drastically reduce cash flows in the energy sector and slice government royalty revenues,” said RBC. “Oil producers are responding by slashing their capital spending plans for the year (by more than 50 per cent in some cases) and trimming their production levels. The slump will spill over to other sectors of the economy, further weakening consumer spending and business investment . . . Saskatchewan and Newfoundland and Labrador won’t fare much better with contractions of -4.0 per cent and -3.2 per cent, respectively.”