In Canada's economy, the West is still the best even with cheap oil: Susan Bonner

Written By doni icha on Senin, 23 Februari 2015 | 22.40

Looking west has been the way to track the story of the Canadian economy for some time now. It was the west —specifically Alberta — that delivered most of the growth after the 2008-2009 Great Recession and led Canada's speedier than most recovery. While an oil boom cranked out wealth in the west, our politicians cooed that "Canada was the envy of the world" when it came to rebounding from those dark days.

Now, we are taking the World at Six west to witness the effects of the oil price collapse and to probe whether the negative momentum will drive the Canadian economy into full skid. From economic fuel injector to economic fault line?

West is best

What starts in the west washes across the county in one way or another. The value of the Canadian dollar, the cost of borrowing money, our balance of trade, the wealth of our banks, the national job picture — all tied to some extent to what's happening in the energy industry.

It is an anxious time. The governor of the Bank of Canada, Stephen Poloz, couldn't have been clearer when he said "the drop in oil prices is unambiguously negative for the Canadian economy."

But we can also look west for what's working well economically. And for that we'll leave the worst of winter and the oil woes on the eastern side of the Rockies and check in with vibrant Vancouver.

As a reporter, I've always experienced a sense of "otherness" when I visited B.C. Its geography, its politics, its culture make it a stand-out province. And now BC is a 'shout out' to economic success.

It is the only province in Canada that is expected to escape deficit this year.

B.C.s bountiful resources helped make the province what it is, but its diversified economy will help make it what it can be.

Sitting in hip Vancouver cafes and offices with the young wizards of the city's booming high tech industry, I feel a jolt of energy to counter all the negative jolts in Canada's economic story.

Tech boom

For years economists have warned about the loss of well paying middle class industrial jobs. But these guys (yep, it is a predominantly male industry) regale me with plans to re-industrialize the economy with knowledge-based jobs.

The revenue growth of these high tech start ups can be staggering and dozens of them land right up there on the fastest growing companies in Canada charts. We'll feature one with projected revenue growth over one thousand per cent over five years.

They see themselves as building Silicon North but this is a high risk (and potentially high reward) business facing huge competition for skilled workers that could make more money doing the same work in the U.S.

But this is Vancouver. People want to live here. On these warm sunny February days with those gorgeous vistas perfectly displayed, I wonder why I've never lived here. And then I look at housing prices (and remember I live in Toronto!) and give myself a shake.

Vancouver residents bear a heavier burden than the rest of us when it comes to housing costs and household debt, but that is another economic fault-line that is pan-Canadian.

The warnings about Canada's over-valued housing prices have been building.

And if what is beginning to happen with softening house prices in Alberta were to spread nationwide, many say Canada's economy could hit full skid.

The west offers warnings and lessons we can all learn from.


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