Dan Dibbelt
Smoky River Regional
Economic Development
Don’t know what you have till its gone
Many people are calling the latest oil crash a correction.
Albertans were working too hard. Wages were too high. Labor shortages made it near impossible to hire a contractor or even get a cup of coffee.
Construction costs were out of control, and it was difficult to hire a contractor when you needed one. And even in the retail sector, stores simply couldn’t get employees.
Well the drop in the price of oil fixed all that. What a correction. This correction has long reaching impacts, far beyond the obvious we see at the gas pumps. Indeed, it is hard not to smile when you fill up your vehicle.
But other than pump prices, there is little cause for joy.
One of the largest impacts of the low oil price is of course to the provincial government who loses a major chunk of tax revenue. Despite the provincial government increasing corporate taxes, many corporations will pay less taxes as their revenues decline.
The province will also collect less in royalties. The impact is multiplied as tens of thousands of worker’s lose their employment and no longer pay provincial income taxes.
Lower provincial revenues have an impact on municipalities who may see their provincial funding cut.
Provincial grants to build roads, schools, medical facilities and a host of other projects will likely need to decrease in order for the province to manage under its new revenue reality.
Not-for-profit and charitable groups that rely on some government funding may also see their funding cut as the province struggles to balance the books. Many not-for-profits that work bingos and casinos to raise funds may notice, fewer people gamble during these times reducing the revenue they raise at these events.
Banks are already seeing a drop in the assessed value of properties, which will eventually impact municipal property taxes. They are also witnessing an increase in foreclosures and people looking to consolidate loans. Foreclosed homes aren’t good for local home prices and for people who purchased a home during the high price season, selling their home may be a challenge.
Every job lost has a multiplier effect. Most workers will have a partner and perhaps a child or two. Forced to look for work, many of our municipalities may see a decline in population.
A worker who lost their job may have a partner that is a nurse or teacher or a store clerk. When the unemployed worker leaves their community, they take their partner and their kids with them.
This can lead to a decline in kids registered at our schools. Depending where the spouse worked, it can leave a gap in the social fabric of a community. This can lead to a decline in our volunteer pool and a challenge for many of our volunteer groups.
Well, okay that’s pretty pessimistic and hopefully things won’t be that bad. So what can we do to offset what seems to be a pretty bad situation?
Well, we have to do what we are always known for doing – working together and supporting each other and our communities.
With pump prices being what they are, its tempting to make that trip to Grande Prairie to pick up all the essentials. Prices are a bit cheaper in Grande Prairie and the money you save on fuel makes that trip even more appealing.
Perhaps it is appealing when you have the option to do that. But when the local grocery stores close the doors due to lack of customers, when the tire shop closes because the large retailers in Grande Prairie are a bit cheaper, when the pharmacy closes because we buy our giftware and prescriptions at the large retailer, when the decision to drive to Grande Prairie is no longer an option, but a necessity, then the appeal seems to be lost.
I spend a lot of time in towns looking to attract businesses to their community, in many cases businesses they once had but that were lost due to a lack of customers.
I don’t know how many people tell me they hate having to drive an hour for some necessity they would like to have in their own community.
I have met with many town officials who say if they had a grocery store, a pharmacy, a hardware store they would be able to attract more residents.
In the Smoky River Region we have grocery stores, pharmacies and hardware stores. Let’s work together to make sure we keep them.