CLAIMS JUMP

More bad news for Alberta as jobless benefits soar.

It’s painful. We last saw a downturn like this in 1998

• The number of Alberta job seekers collecting unemployment benefits rose the most in March since the financial crisis, another sign last year’s crude price plunge is still badly hurting the economy of the oil-exporting Canadian province.

Statistics Canada said on Thursday that the number of Albertans receiving unemployment insurance benefits rose for the fifth-straight month in March to 38,800, 8.9 per cent more than in February.

It was the second-largest increase since June 2009, when the province was struggling with the fallout of the financial crisis.

The rise in insurance benefits comes even though a separate report this month showed the province added jobs in April.

Some economists have predicted further weakness in coming months, as the 50 per cent drop in oil prices between June and January has spurred energy companies to slash drilling and capital spending.

“After several years of stark outperformance, economic growth in Alberta is expected to slow to just 0.4 per cent this year, effectively placing the province in recession,” Robert Kavcic, senior economist at BMO Capital Markets, said in a research report.

Alberta became Canada’s richest province on a per-capita basis mainly because of its geology.

Its oil sands, the world’s third-largest crude reserve, helped make it the largest source of U.S. crude imports.

Albertans have traditionally enjoyed the country’s lowest taxes, while labour shortages and fat profits for the energy industry during oil price spikes pushed up salaries province wide.

But unemployment lines have been lengthened by layoffs among oil sands producers such as Suncor Energy Inc. Companies that provide services to oil producers have also been forced to cut back.

Bankruptcies are also on the rise for both companies and individuals, climbing 14 per cent in February from January and 9.6 per cent from the year-prior month, according to figures from Canada’s Office of the Superintendent of Bankruptcy.

As well, job vacancies in the province, which topped 52,000 in October, dropped for the third-straight month to 35,600 by February. Housing starts, motor vehicle sales, exports and retail sales also posted drops in the most recent data.

“It’s painful,” said Peter Tertzakian, managing director at ARC Financial Corp. “We last saw a downturn like this in 1998, which had a comparable impact on the broad economy.”