The state of Alberta’s economy during COVID19

The Calgary Chamber has been at the center of every transition Calgary has gone through for almost 130 years. As we move through the uncertainty around COVID-19 the Chamber is hosting a daily webinar series, providing your business with resources and support to navigate our current situation.

On Thursday, April 2, 2020 the Calgary Chamber hosted Todd Hirsch, Chief Economist, ATB Financial for a webinar focusing on Alberta’s economy. As an inherent optimist, Todd Hirsch addressed Alberta’s economy outlining how COVID-19 could impact our economy.

Todd started off the webinar laying out five things we know, five things we don’t know, and five opportunities.

Five things we know

COVID-19 is unprecedented. The Spanish Flu of 1918 is possibly the most comparable, however technology and health care advancements make it hard to compare.

Canada’s energy sector is being hit extra hard with a double hit on two fronts. As the global population is staying home and reducing travel, demand for crude oil has dropped significantly. The second hit is the current situation between Saudi Arabi and Russia, with a global price war. This price war is having a ripple effect across the industry.

Governments continue to spend money at an unprecedented rate to keep markets liquid. Governments at all levels are working together saying ‘every option is on the table’ to combat the virus and the impact in our economy.

Markets are very volatile. As the market adjusts to unemployment rates, supply and demand challenges, and significant closures across many industries, large swings in both directions continue to happen.

This epidemic is affecting everyone on the planet. No one is immune and we are seeing countries collaborate and share information like never before. As COVID-19 continues to impact everyone, the most vulnerable population are those with lower incomes. They tend to work in food and beverage, hospitality, and businesses service, and traditionally these role are not able to be preformed remotely. Because they need to work to receive an income and cannot work from home they are more susceptible to the virus.

Five things we don’t know

We don’t know how long physical distancing directives will last. As the virus is so new we continue to learn more about how it spreads, this will impact the length of physical distancing measures.

We don’t know if there will be a second wave of COVID-19, and if there is when it will hit or how long it will last.

We don’t know the ultimate impact on our energy sector. Until physical distancing measures are lifted, it will be hard to predict when global demand for crude will rise. Governments have recognized the energy industry as a vital industry that needs support, however they have yet to share details on what assistance, if any, they will provide.

We don’t know what the larger macro-economic impact will be. We don’t know how high unemployment will go, and how long it will last. The level of contraction could be on par or greater then in the 1930’s.

How will this impact long term consumer behaviours? On the other side of COVID-19 will consumers change habits? Will we think about vacations, consumer goods, and social interaction in a different way?

Five potential opportunities

Internet communication technology (ICT) has increased, and will keep increasing. This has always been around us, however COVID-19 has rapidly increase people’s comfort with video conferencing and remote communication tools. The increase in ICT could also change the way work is performed and shift organizations perspectives on how workplaces function.

More demand for locally sourced and produced products. Locally sourced items have seen an increase in popularity over recent years and are often sold at a premium. In particular, Agri-foods in Alberta will could benefit with increased demand.

We are going into a new era where healthcare technology will be in demand. Consumers will demand better technology to diagnose viruses and other bio-hazards. Industry will also move to develop quick, accurate, low-cost tests for use in the general population.

More at home entertainment and services and home delivery services will become available. Video streaming things such as Netflix, and Crave have already become staples in popular culture. Moving forward more creative ways to deliver goods and services and entertainment will become available increasing accessibility for the general population.

Consulting services to epidemic proof your business/life will rise in popularity. COVID-19 has created more awareness around business continuity and planning. Going forward there will be a demand for services to help protect your business and home from future pandemics.

Watch the full webinar.