Alberta One Of Hardest Hit By Lower Oil Prices
The week ending Jan. 17 was a bad one for Alberta, the Canadian province that once was enjoying an oil boom.
Schlumberger, the oil services giant in Canada’s west, cut spending dramatically, postponed projects in the region and announced 9,000 layoffs for its worldwide operations. Suncor Energy announced it will cut 1,000 jobs and reduce its budget by $1 billion, and uncertainty in oil markets will delay Canada’s federal budget until at least April. Even Target and Sony were closing stores in Canada.
The effect on the country’s financial sector also was profound. The Toronto Stock exchange plunged, and the Canadian dollar dropped to a six-year low against its US counterpart. As a result, Alberta’s premier, Jim Prentice, conceded that the plunge in oil prices will cut provincial revenues by $7 billion in 2015, meaning his government will be operating at a deficit.
In fact Glen Hodgson, the chief economist of the Conference Board of Canada, warned that Alberta may face a recession this year.
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