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Canadians conflicted about 3 Es: Environment, energy and the economy

Canadians conflicted about 3 Es: Environment, energy and the economy

EKOS-CBC poll suggests 56% more worried about the economy than the environment

Alberta produces the most greenhouse gases of any province in the country, and has for more than a decade.

Alberta produces the most greenhouse gases of any province in the country, and has for more than a decade. (CBC)

Justin and Leanne Mills are in a situation familiar to many Albertans these days.

Justin is still working as an oil well cementer in Lloydminster, but his income is down by 50 per cent and the family is dealing with a painful readjustment of their future.

“For the first time in three years, I actually didn’t pay a bill,” said Leanne. “We didn’t have the money to pay it, so I pay a little on this one and all of that one, and the next month, I’ll pay the rest of that one and just try to keep up.”

Media placeholderJustin and Leanne Mills are struggling to pay their bills as work dries up in Alberta’s oilpatch

‘We don’t have a big truck, or a big house, or fancy things and we’re still having trouble getting by.’– Justin Mills, oilwell cementer

Their struggles are one side of the conflict gripping Canadians right now as tension grows between the importance of the environment and the economy. A new CBC EKOS Research poll suggests the country is conflicted between the two priorities, especially when discussing the future of the oil and gas industry.

Leanne has been trying to get pregnant for four years and after a string of miscarriages, she began fertility treatments that cost $600 a month. But, with their drop in income, they can no longer afford the treatments.

EKOS poll Canadians worried about economic issues

“I turned 40 last November and when we spoke to our doctor last, I said that we might not be able to do this for a while,” Leanne said.

…click on the above link to read the rest of the article…

Economics in one cheque

Economics in one cheque

checkOn December 1, 2005, Bill 43 “Alberta Resource Rebate Statutes Amendment Act” received Royal Assent in the Alberta Legislature enabling a one-time rebate to be paid to nearly all Albertans residents in Alberta on September 1, 2005 who had filed a 2004 tax return. The refunds were a product of a larger-than-expected surplus generated mostly by high energy revenues. Rebate cheques were sent out in late January 2006.

The $1.4 billion resource rebate program was controversial, with many people arguing that it would be better if government spent the surplus on other priorities: Health, education, post-secondary, infrastructure, social services, etc. Polls at the time revealed a similar number of people in favour of the prosperity cheques as the number opposed.

This program is sometimes used as an example of wasteful government spending. The assertion is that benefits would have been greater if the government had spent $1.4 billion on the priorities above compared to the benefits generated from the estimated 3.5 million cheque recipients each spending $400 as they each saw fit.

Above is the photocopied cheque I was issued. Emulating Bastiat and Hazlitt, this cheque can serve as a focal point economic analysis.

In Alberta, subterranean oil and gas deposits are not privately owned. The provincial government sets the terms and conditions to choreograph development and it fixes royalty rates. The oil sands royalty rate is equal to the greater of: (a) the gross revenue royalty (1% – 9%) for the period, and (b) the royalty percentage (25% – 40%) of net revenue for the period. The royalty percentage of net revenue is also indexed to the price of West Texas Intermediate (WTI). The royalty percentage is 25% when the WTI price is less than or equal to $55/bbl, rising linearly to a maximum of 40% when the price reaches $120/bbl.

…click on the above link to read the rest of the article…

Albertans have highest debt load in Canada, Equifax says

Albertans have highest debt load in Canada, Equifax says

Consumer debt delinquencies jump 25% in province, 17% in Calgary

Consumer debt in Alberta has jumped 17 per cent.

Consumer debt in Alberta has jumped 17 per cent. (Joe Raedle/Getty Images)

Albertans have the highest average debt load in the country at more than $27,000, says Equifax Canada.

A study released this morning says consumer debt delinquencies in the province jumped 25 per cent over the same quarter last year.

But the nationwide delinquency rate didn’t change, and Equifax Canada says rates remain at historic lows.

“Despite the ups and downs of today’s economy we’re seeing that Canadians are generally able to manage debt and rein in spending when they have to,” Regina Malina, the senior director of decision insights at Equifax Canada, said in a release.

“It may be a surprise to some, but the fact is delinquency rates in the oil-producing provinces are still relatively low. Most people are still finding a way to pay back what they owe.”

Average provincial debt (excluding mortgages)

  • Ontario: $21,072
  • Quebec: $18,070
  • Nova Scotia: $21,709
  • New Brunswick: $22,107
  • PEI: $21,483
  • Newfoundland: $22,766
  • Alberta: $27,576 25
  • Manitoba: $17,913
  • Saskatchewan: $23,941
  • British Columbia: $23,040
  • Canada: $21,458 

Average debt in Calgary is $28,421 excluding mortgages, while Edmonton’s average debt is $26,479 compared to average consumer debt nationwide of $21,458.

The only age category to experience an increase in delinquency rates in the last quarter of 2015 was the under-26 group. The rate for that category rose 2.9 per cent.

“Debt is often used as a tool for consumers to accomplish their objectives. However, as people get older, their income earning capabilities generally trend downward,” Equifax said in a release. “To increase their financial security, Canadians should develop a plan to pay off their debt within a set timeframe.”

…click on the above link to read the rest of the article…

“They Spent It All On Hookers, Blow And Fancy Toys” – Hedge Fund Manager Predicts Lower Oil For Longer, Quantitative Easing For The People, And A Gold Bull Market

“They Spent It All On Hookers, Blow And Fancy Toys” – Hedge Fund Manager Predicts Lower Oil For Longer, Quantitative Easing For The People, And A Gold Bull Market

wallstreet-party

In 2011, as gold prices rocketed to $1900 and oil was trading above $120 a barrel, there were few analysts who saw anything but further gains. But Marin Katusa of Katusa Research had a different opinion. At a major commodity conference Katusa, to boos and jeers from the audience, held strong to his analysis that an imminent deflationary collapse in commodity prices was on the horizon. And collapse they did.

According to Katusa, who is closely involved in the Canadian resource sector, most people simply assumed the good times would go on forever… because it was different this time. But like any uninhibited party fueled by unlimited cash, the hangover was sure to follow.

There’s no doubt you had massive high paying jobs. In Canada, the province that benefited the most is Alberta… In the last twelve months they’ve had 70,000 layoffs of jobs paying over a hundred grand a year.

…when I’d go to these oil towns you’d sit down at the casinos with them and these guys were all about the hookers and blow… they were all about their toys… big fancy trucks… snow mobiles… and they’re in the field for two weeks and they make $20,000 and blow it all at the casinos.

You knew it couldn’t last. 

As Katusa notes in his latest interview with Future Money Trends, though the crash has been brutal for the sector, it’s not over yet and it’s going lower for longer.

They [OPEC] can survive at $20 oil…

For two years everyone’s been saying, “OPEC’s going to cut back.”

They reality here is, why would OPEC cut production? That would only prop up the Russians and the shale sector.

…click on the above link to read the rest of the article…

Auto loan delinquency spikes in Alberta, Saskatchewan

Auto loan delinquency spikes in Alberta, Saskatchewan

Credit agency TransUnion points to non-mortgage debt defaults in oil-producing provinces

Pickup truck sales have grown rapidly in the past five years, but with job losses in Alberta and Saskatchewan, the debt from auto loans is hanging over some consumers.

Pickup truck sales have grown rapidly in the past five years, but with job losses in Alberta and Saskatchewan, the debt from auto loans is hanging over some consumers.

There has been enormous sales growth of pickup trucks and crossover SUVs  in the last five years, but the costs of these larger vehicles are weighing heavily on consumers in some oil-producing provinces.

Auto loan delinquency rates in Canada were at their highest level in four years in the fourth quarter of 2015, driven by spikes of 35 per cent in Alberta and 19 per cent in Saskatchewan.

According to the credit trends reporting agency TransUnion, Saskatchewan has the highest auto loan delinquency rate in the country, at 2.7  per cent, followed by Alberta at 2.4 per cent.

Delinquency on auto loans occurs when payments are 60 or more days past due.

“Falling oil prices have led to rising unemployment rates in oil-rich regions,” said Jason Wang, TransUnion’s director of research and analysis.

“We are now seeing the increase in unemployment in these areas manifest as rising delinquencies across the board, though the greatest impact has been on auto loans.”

For Canada as a whole, auto loan delinquencies rose to 1.3 per cent.

Moody’s has warned some Canadian banks over auto loans, which have been getting larger as buyers opt for large vehicles and is now spread over longer terms of up to seven years.

There were also shifts in delinquency rates on other non-mortgage debt, with more people in British Columbia and Ontario able to keep up with their bills, while delinquencies climbed in Quebec, Alberta and Saskatchewan.

TransUnion said Canadians’ average non-mortgage debt edged up slightly to $21,512 at the end of 2015, from $21,248 in 2014.

Canadians used their credit cards more heavily during holiday shopping in 2015, and there was 4.1 per cent more debt on credit cards, Wang said.

…click on the above link to read the rest of the article…

Jingle mail rears its ugly head in Alberta again

Jingle mail rears its ugly head in Alberta again

Federal government worried about Albertans making strategic defaults on their mortgages

This tiny hamlet south of Calgary has 27 homes for sale for more than $1 million.

This tiny hamlet south of Calgary has 27 homes for sale for more than $1 million. (Colin Hall/CBC)

One of the big bads from the 1980s is starting to emerge again in Alberta.

Jingle mail — the act of walking away from an underwater mortgage by mailing your keys back to the bank — is a peculiarity of the Alberta residential market and an act of desperation. However, a combination of high debt and lost jobs make it an option in a province going through a significant economic reckoning.

It’s enough of a concern that the federal government is watching the Alberta market closely. Jingle mail, or strategic defaults, weaken the housing market and increase loan losses among Canada’s banks.

‘People saying that we can’t make a go of it and mail the keys to the bank.’– Don Campbell, Real Estate Investment Network

“We’re slowly starting to see it in Grand Prairie and Fort Mac,” said Don Campbell, senior analyst with the Real Estate Investment Network.

“People saying that we can’t make a go of it and mail the keys to the bank. In the big cities, not so much because the average sale prices haven’t really dropped much, we haven’t seen the pain yet. But Calgary is getting pretty tight.”

Bruce Alger, an insolvency trustee at Grant Thornton in Calgary, said he is dealing with one such case and has heard of more.

“It’s when you see high-end home prices drop 20 per cent below the peak,” said Alger. “I think there are people considering walking away and I’ve talked to one or two myself.”

Why Alberta is different

Alberta is the only Canadian province to broadly offer non-recourse residential mortgages. Those loans with at least a 20 per cent down payment and thus are not insured by the Canada Mortgage and Housing Corporation (CMHC).

…click on the above link to read the rest of the article…

Once Unstoppable, Tar Sands Now Battered from All Sides

Once Unstoppable, Tar Sands Now Battered from All Sides

Canada’s tar sands industry is in crisis as oil prices plummet, pipeline projects are killed, and new governments in Alberta and Ottawa vow less reliance on this highly polluting energy source. Is this the beginning of the end for the tar sands juggernaut? 

In the summer of 2014, when oil was selling for $114 per barrel, Alberta’s tar sands industry was still confidently standing by earlier predictions that it would nearly triple production by 2035. Companies such as Suncor, Statoil, Syncrude, Royal Dutch Shell, and Imperial Oil Ltd. were investing hundreds of billions of dollars in new projects to mine the thick, highly polluting bitumen.

Eyeing this oil boom, Canadian Prime Minister Stephen Harper said he was certain that the Keystone XL pipeline — “a no-brainer” in his words — would be built, with or without President Barack Obama’s approval. Keystone, which would carry tar sands crude from Alberta to refineries along the Gulf of Mexico, was critical if bitumen from new tar sands projects was going to find a way to market.

What a difference 18 months makes. The price of oil today has plummeted to around $30 a barrel, well below the break-even point for tar sands producers, and the value of the Canadian dollar has fallen sharply. President Obama killed the Keystone XL project in November, and staunch

The industry is suddenly weathering a perfect storm that analysts say has significantly altered its prospects.

opposition has so far halted efforts to build pipelines that would carry tar sands crude to Canada’s Pacific and Atlantic coasts.

Equally as ominous for the tar sands industry are political developments in Alberta and Canada. In May, Alberta voters ousted the conservative premier and elected a left-of-center government. The new premier, Rachel Notley, is committed to doing something meaningful about climate change and reviewing oil and gas royalty payments to the province, which are among the lowest in the world.

…click on the above link to read the rest of the article…

Alberta Loses Most Jobs In 34 Years As Oil Crunch Cripples Labor Market

Alberta Loses Most Jobs In 34 Years As Oil Crunch Cripples Labor Market

Times are tough in Alberta and to be sure, we’ve piled it on heavy when it comes to cataloguing the long list of pitiable outcomes that have accompanied crude’s steep slide.

The province is at the center of Canada’s dying oil patch and as crude extended its seemingly endless decline last year, Alberta saw oil and gas investment plunge by a third. That’s bad news for authorities who count on resources for 30% of provincial revenues.

Rig activity fell by half in the first seven months of 2015 and as the job losses mounted, the sorrow deepened – literally. Suicide rates jumped by 30% and in Calgary commercial break-ins almost doubled from a year earlier, while bank robberies were up 65% and home invasions increased 52% (read more here).

Meanwhile, food bank usage spiked as those who used to be donors found themselves depending on the free meals for subsistence.

And speaking of food, prices for fresh fruit and vegetables are seeing double-digit inflation thanks to the plunging loonie.

All in all, a very bad situation indeed and on Tuesday we learned that the picture was actually materially worse than an initial round of statistics led us to believe.

“Statscan’s annual revisions of its national Labour Force Survey data ratcheted up Alberta’s net job losses last year to 19,600, from the 14,600 the statistical agency originally reported in its final 2015 survey released in early January,” The Globe And Mail reports, adding that the losses “exceed the 17,000 jobs Alberta shed in the Great Recession in 2009.”

In fact, 2015 was the worst year for job losses in the province since 1982.

By the end of last year, Alberta’s unemployment rate had risen to 7.1% from just 4.8% at the end of 2014. As The Globe And Mail goes on to note, that’s the highest level in two decades. And it’s projected to get worse. Alberta could see unemployment rise to 7.5% in H1.

…click on the above link to read the rest of the article…

EI claims rose 9.2% in the year to November with Alberta hardest hit

EI claims rose 9.2% in the year to November with Alberta hardest hit

More than 31,000 new jobless in Alberta as EI rolls climb to 544,200

There have been several rounds of layoffs in the oilpatch since 2014, with trades, transport, technical support, finance and management affected.

There have been several rounds of layoffs in the oilpatch since 2014, with trades, transport, technical support, finance and management affected. (Todd Korol/Reuters)

The number of Canadians receiving employment insurance benefits rose 9.2 per cent in the year ending in November 2015, according to new data from Statistics Canada, with most of the newly unemployed in Alberta.

There were sharp increases in new applicants from Saskatchewan, Alberta and Manitoba, bringing the total receiving EI to 544,200 people. The unemployment rate in Canada last November was 7.1 per cent.

About two-thirds of the increase in the past year has been in Alberta, with 31,030 people applying for benefits in the year to November.

The pain has been spread equally between Edmonton and Calgary, with just over 20,000 new people on the EI rolls in each city.

Alberta has suffered several rounds of layoffs related to the low price of oil, with companies cutting back first contract workers, then long-time employees as the world market price fails to cover the cost of crude production.

Job losses in Saskatchewan, Manitoba

There’s been a 16 per cent increase among workers in trades and transport or equipment operation and a 17 per cent increase in natural and applied sciences, a term Statistics Canada uses to apply to more skilled workers including geologists and mine technicians.

Alberta has also seen job losses in finance, administration and management categories.

Statistics Canada says the number of new claimants has levelled off in the past few months.

Despite that, Saskatchewan saw a 4.6 per cent rise in claimants in November, Alberta was up 2.7 per cent and Manitoba was up 1.9 per cent.

…click on the above link to read the rest of the article…

Come Listen to the Man Fracking Powers Tried to Silence

Come Listen to the Man Fracking Powers Tried to Silence

Why you should spend Thursday, Jan. 28, with Andrew Nikiforuk. A special Tyee event.

Andrew Nikiforuk

On Jan. 28, Andrew Nikiforuk has some knowledge to share.

On Jan. 28, in Vancouver, you have the opportunity to spend an evening with Andrew Nikiforuk, one the finest journalists, one of the finest minds, one the most courageous and public spirited people I have ever met.

If you are a regular reader of The Tyee you probably recognize Andrew’s byline. But you may not know of his new book on fracking in Canada with a fascinating, real-life hero at the centre of it.

You also may not know how hostile a place Canada can be for a journalist as effective as Andrew Nikiforuk.

And before you buy a ticket for the “Standing up to Fracking” Jan. 28 event, you’d probably like to know more about what will be discussed.

So I thought I’d quickly fill you in on all that here.

Andrew first met Alberta landowner and oil patch consultant Jessica Ernst in 2004 while reporting for the Globe and Mail’s Report on Business on “unconventional” energy sources — like fracked gas. It wasn’t until the next year that the harm fracking can do became personal for Ernst. She’d discovered groundwater contamination on her own land 113 kilometres northeast of Calgary, and Andrew returned to write about that for Canadian Business.

He couldn’t believe the level of fraud she had documented or how the Alberta Energy Regulator had banished all communication from her to thwart her efforts. In fact her story about pollution eerily previewed the trouble and controversy fracking would later cause across the continent.

…click on the above link to read the rest of the article…

World’s Climate Threatened by Greed and Militarism, Official Canada Remains Part of the Problem, Not Solution

World’s Climate Threatened by Greed and Militarism, Official Canada Remains Part of the Problem, Not Solution

shutterstock_80847415

A leading columnist in Canada’s Globe and Mail daily newspaper known in the past to voice concern about the global warming emergency has penned two columns recently in support of Alberta tar sands pipelines, including praising the efforts of the premier of Alberta to sell the construction of these project to an increasingly sceptical and wary public in Canada

Jeffrey Simpson has argued for years for a more rational capitalist approach to energy production in which some account would be made for the global warming emergency. He co-authored a book in 2007 with several climate scientists titled Hot Air: Meeting Canada’s Climate Change Challenge.[1] But his columns in the January 14 and 15 editions of the Globe reveal him as just a born again shill for the Alberta tar sands industry.

Simpson begins his Jan 14 column (accessible online to Globesubscribers only) with, “Alberta Premier Rachel Notley, to her government’s great credit, has tried for the first time to outline a comprehensive and serious plan for the province to curb greenhouse gas emissions that cause climate change.”

Simpson is referring to Premier Notley’s fanfare announcement on November 22, 2015 purporting to be an energy “plan” with greenhouse gas reduction components. The “plan” includes a few piecemeal promises such as reducing coal-fired electricity production in Alberta over the next few decades (presently, the province generates 50 per cent of its electricity from coal). But the centrepiece of her “plan” is to green light an increase in tar sands production in the coming years by as much as 43 per cent, most of which would be sold in foreign markets. A plan to “curb greenhouse gas emissions”, indeed.

Edmonton writer Gordon Laxer explained in a commentary published in the Edmonton Journal on December 3:

…click on the above link to read the rest of the article…

Alberta Freezes Government Salaries As Canada’s Oil Patch Enters Second Year Of Recession

Alberta Freezes Government Salaries As Canada’s Oil Patch Enters Second Year Of Recession

On Wednesday, we documented the astonishing prices beleaguered Canadians are now forced to pay for groceries thanks to the plunging loonie.

Oil’s inexorable decline has the Canadian dollar in a veritable tailspin and because Canada imports the vast majority of its fresh food, prices on everything from cucumbers to cauliflower are on the rise, tightening the screws an already weary shoppers.

Soaring food prices are but the latest slap in the face for Canadians and especially for Albertans who have been hit the hardest by 13 months of crude carnage. Resources account for a third of provincial revenue and with oil and gas investment expected to have fallen over 30% in 2015, Alberta’s economy has is expected to contract  for the foreseeable future.

The economic malaise has had a number of nasty side effects including soaring property crime in Calgary, rising food bank usage, and sharply higher suicide rates.

With the outlook for oil prices not expected to improve in the near-term, ATB now says the province faces two long years of recession. “The pain is going to be concentrated in the first half of the year. But we don’t really see any ending in sight to a downturn at least until the end of the year. So we are calling for another contraction,” ATB’s Chief Economist Todd Hirsch says in The Alberta Economic Outlook Q1 2016 report.

“This low price environment continues to discourage new investment and spending and has weighed down employment — not only in the oilpatch, but throughout most sectors of the province,” Hirsch continues. “This downturn is longer in duration certainly than 2009 was which was a very quick downturn but very short-lived. This one is going to linger on longer.

Indeed. Here are some charts from the report which underscore the magnitude of the sharp reversal in fortunes.

…click on the above link to read the rest of the article…

In Supreme Court, a Battle Over Fracking and Citizens’ Rights

In Supreme Court, a Battle Over Fracking and Citizens’ Rights

Jessica Ernst’s long fight to challenge legislation putting energy regulator above the law reaches top court.

JessicaErnstWater_600px.jpg

Jessica Ernst on her land in Alberta. Photo: Colin Smith.

After years of legal wrangling, Jessica Ernst and Alberta’s powerful energy regulator finally squared off in the Supreme Court of Canada yesterday.

For almost two hours, all nine justices questioned lawyers from both sides in a case that will determine if legislation can grant government agencies blanket immunity from lawsuits based on the Charter of Rights and Freedoms.

At times the debate was so bogged down in legal jargon and little known cases that it felt as though the participants were holding a conversation in a foreign language.


STANDING UP TO FRACKING: A TYEE EVENT

Join The Tyee and acclaimed energy journalist and author Andrew Nikiforuk for a special evening on fracking. Nikiforuk will survey the latest energy battleground and discuss his new book, Slick Water, which centres around Jessica Ernst’s landmark case. The event takes place Jan. 28 in Vancouver. Find further details and ticket information here.


But the heart of the matter remained simple: Can a regulator prevent a citizen from suing it for damages when the citizen feels their charter rights have been violated?

Ernst alleges the Alberta Energy Regulator violated her rights by characterizing her as a “criminal threat” and barring all communication with her.

The claims are part of her multipronged lawsuit related to the regulation of fracking. She says fracking contaminated aquifers near her homestead near Rosebud, about 110 kilometres east of Calgary, and is seeking $33 million in damages.

…click on the above link to read the rest of the article…

Canadian Stocks in Bear Market, Loonie Swoons, Crude Crashes to $16, Consumer & Business Confidence Dives…

Canadian Stocks in Bear Market, Loonie Swoons, Crude Crashes to $16, Consumer & Business Confidence Dives…

“Investment and hiring intentions lowest since 2009”: Bank of Canada

Since Christmas Eve, the Toronto Stock Exchange index has dropped every single day, 10 trading days in a row, including so far today as I’m writing this, the longest losing streak since 2002. Now at 12,210, it’s down 21% from its 52-week high, set on April 17, and thus in bear market purgatory.

Beaten down energy producers, at about 20% of the index, have had a big impact. But the problems are broader. Among the standouts is the must-own, super-growth, TSX mega-cap Valeant, whose shares have plunged 65% from their 52-week high.

The Canadian dollar just dropped below US$0.70 for the first time since spring 2003, to US$0.6996. It now takes C$1.43 to buy a US dollar, up from about parity in 2011, 2012, and much of 2013. That year, Stephen Poloz became governor of the Bank of Canada. His solution was to demolish the currency. So he took it down 28% against the US dollar, with a big supporting hand from the collapsing prices of the commodities that Canada exports. Oil joined them in mid-2014.

The US benchmark WTI is trading just above $30 a barrel. Pundits at major investment banks have their eyes set on $20. Doom-and-gloomers see $10.

Canadian producers aren’t so lucky. Alberta’s heavy crude blend, Western Canada Select, plunged 30% so far this year, and on Monday hit US$16.51 a barrel, according to PSAC. “Lowest close on record,” according to the Globe and Mail.

Canadian producers are already experiencing what doom-and-gloomers are predicting for WTI. The swoon of the Canadian dollar is in part a reflection of this. Poloz is patting himself on the back. He sees benefits for big exporters outside the resource sector, such as auto manufacturing plants and component suppliers to the US auto industry that compete with Mexico.

…click on the above link to read the rest of the article…

This Is Canada’s Depression: Surging Crime, Soaring Suicides, Overwhelmed Food Banks “And The Worst Is Yet To Come”

This Is Canada’s Depression: Surging Crime, Soaring Suicides, Overwhelmed Food Banks “And The Worst Is Yet To Come”

Back in March, we brought you “Drugs, Prostitution, Violence Plague Oil Boom Towns Gone Bust,” in which we detailed the plight of towns like Sidney and Bainville, Montana, where the slump in oil revenue has made it all but impossible for local authorities to cope with surging crime rates that some attribute to the influx of oil workers the communities experienced in the good old days of high crude prices.

The problem, apparently, was that despite the dramatic slump in oil, companies hadn’t yet begun to cut jobs or slash capex and so, officials were left with less money to put towards policing their growing populations.

As dangerous as it may be for small towns to experience exponential growth in what The Washington Post describedas “highly paid oil workers living in sprawling ‘man camps’ with limited spending opportunities,” what’s even more dangerous is the prospect that suddenly, the majority of those workers will be jobless. That is, if there’s anything that’s more conducive to raising the crime rate than legions of highly paid young men living in small towns with “limited spending opportunities,” it’s legions of formerly highly paid young men stuck in small towns with limited job opportunities.

With that in mind, America can look north to Calgary for a preview of what’s in store for America’s oil boom towns.

Although Alberta’s largest city bares little resemblance to Sidney and Bainville, the three do have one thing in common: oil. “Calgary boasted one of the lowest jobless rates in Canada as crude prices rose over $100 a barrel [but] it’s now reeling after a global glut pushed prices down by two-thirds,” Bloomberg notes.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
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Olduvai II: Exodus
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