Premier Notley and her government walked into a very difficult situation when they assumed government. Oil had dropped to a near decade low and unemployment was rising substantially. The drop in the international price of oil has been the primary talking point for Alberta’s NDP. 2015 saw a poor performance for the price of oil, but fortunately, the price rose substantially in 2016 – from as low as $26/bbl in January to $53/bbl in December. Furthermore, natural gas pricing also rose – nearly $1/MMbtu at Henry Hub to $3.42.
So how did Alberta’s economy perform with the price appreciation? Poorly. Which raises questions about if NDP policies have been working against an improving oil and gas pricing environment. Virtually every leading indicator worsened in 2016. To be fair, rig activity did pick up substantially in January, so there will likely be improvement in the first month of 2017. However, oil and gas bounced back to the level it was when the NDP first assumed office and the leading indicators continue to worsen. If the price of oil stays in a $40 to $60 per barrel range, there must be major improvement in Alberta’s economy, otherwise NDP policies will become a guide for how not to run a province.
Have a look at the charts below:
Oil Price
Natural Gas Price
TSX Energy Index
Employment Rate
Unemployment Rate
Employment Insurance
Weekly Earnings
Data from Alberta Economic Dashboard.