Interesting things have happened 18 months after oil prices fell off a cliff to hover down around $35 per barrel, with the deflationary environment that now permeates the global economy just a microcosm of the overall problems that signal the world entering into a new Great Depression. And besides currency wars, trade wars, and escalating hot wars that are the norm across the world today, one economy may be the first domino to trigger the global collapse.
Canada.
Canada is expected to lose some 100,000 oil and gas sector jobs by the end of the year. As The Financial Post notes, Alberta’s troubles go beyond falling crude prices. “Apart from the protracted price declines, Alberta’s oil and gas sector has also had to contend with a 20 per cent hike in corporate taxes, a carbon tax and new regulatory policies to limit rein in carbon emissions,” the Post writes, adding that “a new provincial royalty regime is to be announced in January, leaving Alberta oil and gas producers under a cloud of uncertainty [while] the new federal government also plans to unveil new policies, including a review of the regulatory process, which the sector sees as more burden in an already difficult environment for the industry.”
As we pointed out three weeks ago, the real casualties in Canada are no longer metaphorical economic objects, but the very people who until recently enjoyed comfortable lives only to succumb to an unprecedented collapse in the local economy. According to the chief medical examiner’s office, 30% more Albertans took their lives in the first half of this year compared to the same period last year.
And crime are now soaring amid the protracted slide in crude. “Calgary’s unemployment rate rose to 6.9 percent in November from 4.6 percent a year earlier, Statistics Canada data show, as 21,100 more were put out of work,” Bloomberg writes. “Home sales have fallen 21 percent this year as the average price skidded 2.6 percent, according to the Calgary Real Estate Board.” Here’s more:
Brown Bagging for Calgary’s Kids is providing 16 percent more school lunches than in September — about 2,900 across 187 schools. The rise is unprecedented, said Tanya Koshowski, the group’s executive director. Food bank use jumped 23 percent in Alberta in the year ended March 2015, the country’s biggest increase, according to Food Banks Canada.
Police are pointing to economic decline and rising drug use to explain Calgary’s crime surge. In the first 10 months of 2015, commercial break-ins almost doubled from a year earlier, bank robberies were up 65 percent and home invasions increased 52 percent, Calgary Police Service data show. - Zerohedge
Before the collapse of their oil industry, Canada was already feeling the effects of a housing bubble that was left to them by former central bank chairman Mark Carney. And as if this were not enough, the bonds tied to oil production will be enough to crush the formerly fiscally responsible country and leave them a wasteland of debt and no markets to sell their resources.
Many other oil producing nations are just a step away from Canada’s fate, with Saudi Arabia holding on by a thread from their own economic collapse due to the decline in oil. And with the U.S. reversing its decade’s long trend of exporting oil coupled with Iran about to put a million barrels a day out onto the market, Canada has nowhere to turn to get out from under this, and too many debt instruments that have nowhere to go but down.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com, Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.
