Four days ago, we again profiled Canada’s unraveling economy.
For those who may be late to the story, the inexorable decline in crude prices that’s played out over the past 13 or so months means the country’s oil boom is now its oil bust and nowhere is the sharp reversal in fortunes more apparent than Alberta, the heart oil Canada’s oil patch.
Oil and gas investment in the province tumbled by nearly a third in 2015 as rig activity plunged by 50%. The country as a whole has lost 100,000 oil and gas sector jobs amid plunging prices and as Bloomberg noted last week, some skilled workers have given up on the sector, choosing instead to go back to school in order to acquire the skills they need to pursue employment in other fields. In a sign of the times, food bank use in Alberta was up more than 23% in March (the last month for which there's data). Here's a look at the interplay between crude prices and Calgary's unemployment rate:
Meanwhile, the rash of layoffs is having a profound effect on Canadians. Suicide rates in Alberta are up an estimated 31% this year as “people are just at wit’s end,” according to an operator at a distress hotline center. Crime is up sharply as well. Property crime in Calgary, for example, rose nearly 40% during the first quarter.
In yet another sign of a rapidly deteriorating situation, 1.7 million square feet of office space has become available in downtown Calgary, more than any downtown in North America.
But not everyone is Alberta is struggling. Take Steven Low, CEO of Consolidated Recovery Group for instance. Low's company works with courts on auto repos and evictions and as you can imagine given everything said above, business is booming. Here's The Calgary Herald:
While the crash in oil prices idles drilling rigs and empties out downtown Calgary offices, Steven Low's company can barely keep up with the deluge of work.
Low is CEO of Consolidated Recovery Group, an agency in Western Canada that works with lenders and the courts to recover bad debts — by repossessing a car or carrying out an eviction, for example.
It's been a busy year for the company and the work has only picked up as the crude doldrums linger, squeezing the finances of the many Albertans who rely on oil and gas to make a living — either directly, or through its economic spinoffs.
Low says bailiffs at his firm are working around the clock and he's even had to hire more staff to get all the work done.
But Low says he's not particularly enamored with the idea of profiting from the Alberta's collapsing economy. "We don't gloat or feel terribly excited about the economic conditions right now. We approach every single repo and seizure as an opportunity to help respect the dignity of the debtor," he says.
And Low isn't the only one who's seeing his business double or triple in the face of the widespread malaise. There's also John Shortridge, whose Allied Shortridge Civil Enforcement is twice as busy now as it was just six months ago. "Shortridge is a veteran of the business — first with the Alberta Sheriff's Office and then on his own after civil enforcement functions were privatized in the province in 1996," The Herald notes. Here's Shortridge's dire warning: "This reminds me more of '82 and '83. It was bad and it was long... My view is this is going to be a long haul."
On the bright side, if you're an Albertan and you find yourself "doing business" with Low, Consolidated Recovery Group will work with you so that you can save face. Here's Low: "...we will go out of our way to seize a vehicle around the corner or allow the person to bring it out of their place of work so that co-workers don't see their vehicle being towed away." That of course assumes you still have a job.