At the Business Support Network(BSN) meeting on April 16th, Town of Fox Creek Assistant Chief Administrative Officer, Kristen Milne updated the crowd on what is new in Fox Creek. Developers broke ground on the new Duvrenay Apartments, located off of Kaybob Drive and adjacent to the RV campground.
Within the next couple weeks, the town is expecting to start selling the 22 lot residential area, located behind Third Street and the Condos. In addition, they are hoping to start drilling wells soon and the water treatment plant is still set to be on line in November.
The town is currently focusing on water meters and tax assessments. Water levels are now at where they should be and the Town of Fox Creek is working with AER (Alberta Energy Regulators) on moving some of the pumps. Currently the water ban has been lifted temporarily.
Milne also explained that the Fox Creek Employment Centre was closed for financial reasons and all services have been relocated to the Community Resource Centre (CRC). The same services that were offered at the Employment Centre are now offered at the CRC. Milne also explained that it was important to note the Employment Centre services were originally at the CRC and that the Employment Centre was opened as a pilot project.
Cathy Wiltse, Fox Creek Chamber of Commerce President talked about Canada Day coming up, explaining that it is free to everyone due to donations from businesses and the Festival of Trees fundraiser.
Todd Hirsch, ATB Economist was invited to be the guest speaker at this month’s BSN meeting. Hirsch spoke about Alberta’s Economy for 2015, proposing the question of who should worry and who shouldn’t. Hirsch began by explaining that due to fairly recent events, the economic situation in 2015 has changed since 2014, but there isn’t a sense of panic like there was back in 2009. There appears to be more apprehension about what’s next.
Alberta is very much influenced by the global economy, explained Hirsch. He added that Alberta needs to watch what happens globally to predict what will happen locally. In Russia, the predictions are that it is going to get worse and that the effects of what happens with Russia will spill over to the USA and other countries.
In Europe, financial turbulence was seen in 2013, followed by a year of calm. Then in January of this year, elections in Greece were held, electing an austerity government. The definition of austerity is a state of reduced spending and increased frugality in the financial sector. Austerity measures generally refer to the measures taken by governments to reduce expenditures in an attempt to shrink their growing budget deficits.
Greece is trying to break free from the Euro and if that happens, then Spain and Italy are expected to follow. “If you think we are having a hard time in Alberta, it’s nothing like what they are facing in Greece” stated Hirsch.
In China they have lots of fiscal and monetary tools that they are willing to use. Although China has lots of imbalances, they have the tools to deal with it.
In Canada, there are record levels of debt but Hirsch was quick to state that people should not hit the panic button over this as household debt levels are growing at the lowest levels possible. Canada did see a record high of debt in the fourth quarter of 2014. Although debt is a concern in Canada, debt servicing is low and most households can handle their debt.
The other part of the equation that Hirsch says people need to watch is the price of the Canadian and USA dollars. The Canadian dollar has fallen over 20%, but it is important to note that it is rare that the Canadian dollar has been on par with the US dollar. Hirsch stated that if the Canadian dollar was at par with the US dollar, then things would feel worse than they are, when it comes to exports. The Canadian dollar isn’t in free fall like we currently see the Russian Ruble doing.
The USA dollar has appreciated overall and the USA is talking about a rise while the rest of the world is talking about falls. Interest rates in the USA are expected to go up sometime in 2015.
The Bank of Canada is not one to surprise the markets but in January they cut the basis points by 25 which is bad for savers and investors, but good for mortgages and loans.
What is happening in Alberta right now, is not anything that Alberta hasn’t seen or dealt with before.
The big question in Alberta; and what the people what to talk about is oil. Why did oil prices fall so dramatically? The simple answer is; too much supply on the global market.
In the 1970’s, OPEC was in control of about 70% of the market, but today they maybe control about 35%. So where can the price of oil go now? The simple answer is no one knows; it’s all a guess. Hirsch explained that as long as there is volatility in the price of oil, Alberta isn’t over the effects of the fall yet. Hirsch also added that the bottom may hit by late summer or early fall, but this is only a guess.
In 2004, $50 for a barrel of oil seemed high but today that same dollar value seems low. Cost escalation has made projects unattainable or unaffordable and with high costs, comes problems when the cost of the product drops. The buildup of expectations for things like bonuses will go explained Hirsch, adding that the effects will be felt by today’s graduates.
So the question is; what’s next?
The oil and gas industry is not the only industry in Alberta, but one of four. Forestry, agriculture and tourism are also industries that Alberta can grow in. A low dollar and low oil costs benefit the forestry, agriculture and tourism industries. These industries need to compete for labour with the oil and gas industry. In the agricultural industry, cattle prices are at record highs right now due to a shortage of cattle in North America. So to answer the question posed in the beginning, who should worry and who shouldn’t?
According to Hirsch, if you are swimming with sharks; you should worry or if you’re falling from a train, you should worry. Otherwise, Albertans shouldn’t worry according to Hirsch. Don’t feed the fears.
The next BSN meeting will be held on May 29 from noon to 1:30 pm at the Fox Creek Community Hall. This will be the one year celebration of the BSN meetings.
By Hailey Spiess
Hailey enjoys informing people about the events and telling the stories of Fox Creek.
As a mother of three, for Hailey, family comes first and writing is her passion.Print This Post