RESTRICTIONS DEEMED `FAIR'
Business owners relieved
As Alberta's economy struggles to recover from a deep recession caused by the COVID-19 pandemic, businesses in the province face a new set of restrictions — but have avoided a broader shutdown.
Premier Jason Kenney announced Tuesday a series of measures designed to stem the rapid spread of the coronavirus across Alberta, including temporary rules that will affect retailers and in-person services in areas with a higher number of cases, including Calgary and Edmonton.
Beginning Friday, businesses such as banquet halls, indoor playgrounds and concert venues must close and remain closed for at least three weeks.
Retail businesses can operate at 25 per cent of their Alberta Fire Code capacity, limiting the number of customers inside their stores during the busy holiday shopping season.
These steps will affect an array of retail outlets, including pharmacies, grocery stores, clothing and computer shops, as well as movie theatres, casinos and indoor fitness centres.
“These are tough but fair measures. They allow us to keep the lights on and in combination with curbside delivery, we think we can make it work,” said Randy Shapiro, who co-owns The Discovery Hut in Calgary.
“A full lockdown during December would have been devastating … There is a weight lifted off my shoulders.”
Some personal services, such as salons and barbershops, will only be allowed to operate by appointment during this period.
Restaurants and pubs can also remain open for in-person service, although recent restrictions on serving alcohol after 10 p.m., and a requirement to close by 11 p.m., will stay in place.
Kenney said the government chose targeted measures, opting not to put in place a broader lockdown as other provinces have done.
“We believe these are the minimum restrictions needed right now to safeguard our health-care system while avoiding widespread damage to people's livelihoods,” he told reporters.
“For some, perhaps it's a little bit easy to say just flick a switch, shut `em down … We need to be a little more balanced in the way we discuss these things.”
The announcement came as the province reported 1,115 new cases of COVID-19 across Alberta and 16 deaths.
Pressure has been building on the Kenney government in recent weeks to take stronger action.
Business groups welcomed the news that a wider lockdown wasn't implemented.
“We were pleased they followed a targeted approach,” said Murray Sigler, interim CEO of the Calgary Chamber of Commerce.
“He tried to strike a balance between keeping people safe and trying to keep the economy and business operating,” added Adam Legge, head of the Business Council of Alberta.
“I think they struck the right balance.”
The decision to allow most businesses to stay open came the same day Finance Minister Travis Toews released a sobering mid-year financial report card for the province and a new assessment on the state of the economy.
The report highlights small improvements in the province's finances since the summer, but also a fragile recovery that won't see Alberta's economy fully return to pre-pandemic levels — or 2014's heights — until 2023.
“I can't say whether the worst days are behind us in this pandemic. I am hopeful when I'm seeing some signs of economic recovery out there,” Toews said.
“But our projections right now do continue to anticipate the province battling COVID not only this year, but also into the next fiscal year.”
For the province's bruised finances, Alberta's deficit is now expected to hit $21.3 billion this fiscal year. It would be the highest deficit on record, although $2.8-billion below projections that came out during the summer.
Government revenues have also started to bounce back slightly. More money from federal government transfers and higher energy and gaming income has helped staunch some losses.
Reading the province's new economic outlook, however, underscores the long road ahead.
“The pace of recovery for Alberta, once we're through the worst of the pandemic, is going to be sluggish,” said University of Calgary economist Trevor Tombe.
Alberta's economy is set to shrink by 8.1 per cent this year, the worst contraction since such data began to be collected in the 1980s.
As oil production and consumer spending recovers, the economy is projected to grow by 4.4 per cent in 2021, and then increase by about a 3.7 per cent annual clip in the following two years.
“A great deal of uncertainty remains with respect to COVID-19 and a second wave, resulting in delayed recovery in certain sectors, including the service sector, as well as an overall decline in business investment,” the report states.
To get investment and jobs back, the province needs to see a comeback in oilpatch spending after a calamitous spring when oil prices plunged into negative territory and companies slashed capital programs and shut-in production.
The province expects benchmark U.S. oil prices to average just US$36.40 a barrel in this fiscal year.
As global supply and demand return to balance, oil prices are forecast to increase to $45.40 a barrel in the next fiscal year, before gradually moving up to almost $55 a barrel by 2022-23.
Prices for West Texas Intermediate ( WTI) crude oil have rebounded in the past month, closing Tuesday at $44.91 per barrel.
According to the province, oil and gas sector capital spending will fall by more than 30 per cent this year, but is expected to grow by nine per cent next year to $19.3 billion.
A strong year for agriculture, forestry and higher natural gas prices are also fuelling some growth.
However, it's on the jobs front where the outlook continues to remain troublesome.
The province has regained about 72 per cent of the 361,000 jobs lost between February and April during the initial coronavirus lockdown.
Alberta's jobless rate is expected to average 11.6 per cent this year and won't get back to last year's levels until 2023, it added.