A senior economist with ATB painted a fairly bright financial picture for Alberta to a crowd of about 100 people attending a presentation in Sylvan Lake, last Thursday.
“Alberta is all about oil and crude oil prices are pretty solid right now,” said Todd Hirsch, in his presentation sponsored by Sylvan Lake Chamber of Commerce and the local ATB branch. “Albertans are spending a lot and feeling very confident. They are secure in their jobs. Retail is robust and the population is growing.”
Hirsch said Albertans have a right to feel confident because they are situated well in Western Canada.
Alberta is all about oil, he noted, adding tension in the Middle East has moved prices up.
“The Middle East is a big supply for crude oil.”
While oil prices are not expected to fall, they are volatile.
“I would like to say oil prices would never tumble, but they could,” he added.
“One thing I know for sure, oil could be between zero and a million dollars a barrel,” he joked. “(It could become a) touch softer than it is now, but we will continue to see investment in oil sands and conventional drilling.”
The agriculture picture is looking brighter than it has in the past, he added.
“Things are looking a little brighter for agriculture. Prices are rising.”
He attributed the higher prices to a higher standard of living in China and India.
“They want more food and better quality of food,” he said. “Western Canada is situated well to take advantage of that.”
On the livestock front, Hirsch suggested the e coli situation is not a real cause for alarm economically.
“I don’t think there will be a real economic fallout because of e coli. At this point it is not a reason for concern.”
Mortgage rates in Canada should remain constant in 2013, he said.
“There is not a whiff of inflation in the Canadian economy. I can’t see much movement in mortgage rates for 12 to 15 months,” he said.
The U.S. economy is only okay, he noted.
“The best you can say for the U.S. economy is they are treading water. It is not operating where it should.”
The employment picture in the U.S. doesn’t seem to be particularly bright, he said.
“Jobs are not coming back to the U.S. and discouraged workers are dropping out of the work force.”
While Hirsch emphasized that locally, the economy is strong and stable, he said global economy might feel like a mess, and the traditional tools of monetary policy don’t appear to be working. Hirsch compared the global economy to eating in a restaurant where there were no utensils and no accommodating waiters or waitresses.
He said compromise and co-operation among the chiefs of global economy is the only way to prevent a major economic downturn.
Carlo Simonot, past president of Sylvan Lake Chamber of Commerce said Hirsch’s presentation was informative and interesting.
“We were fortunate to have a high level economist speak to us and it was nice to hear facts that weren’t all gloom and doom. It was nice to hear his opinions on local and global economy from someone with their feet on the ground; someone who is here in Alberta versus someone from Toronto.
Simonot said after listening to Hirsch he sees Alberta in a positive, economic cycle and the rest of Canada sitting on a nice, steady incline.