Latest bad news for oil-rich Alberta: more getting unemployment aid

Thu May 21, 2015 5:39pm EDT
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By Scott Haggett

CALGARY, Alberta May 21 (Reuters) - The number of Alberta job seekers collecting unemployment benefits rose the most in March since the financial crisis, another sign last year's crude price plunge is still badly hurting the economy of the oil-exporting Canadian province.

Statistics Canada said on Thursday that the number of Albertans receiving unemployment insurance benefits rose for the fifth-straight month in March to 38,800, 8.9 percent more than in February.

It was the second-largest increase since June 2009, when the province was struggling with the fallout of the financial crisis.

The rise in insurance benefits - known colloquially in Canada as "pogey" - comes even though a separate report this month showed the province added jobs in April.

Some economists have predicted further weakness in coming months, as the 50 percent drop in oil prices between June and January has spurred energy companies to slash drilling and capital spending.

"After several years of stark outperformance, economic growth in Alberta is expected to slow to just 0.4 percent this year, effectively placing the province in recession," Robert Kavcic, senior economist at BMO Capital Markets, said in a research report.

Alberta became Canada's richest province on a per capita basis mainly because of its geology. Its oil sands, the world's third-largest crude reserve, helped make it the largest source of U.S. crude imports.

Albertans have traditionally enjoyed the country's lowest taxes, while labor shortages and fat profits for the energy industry during oil price spikes pushed up salaries province wide.   Continued...