COVID-19 Puts Albertan Families under Financial Strain
The Covid-19 pandemic put many Albertan families in a vulnerable position and under financial strain due to loss of jobs and income.
Jobs in Alberta
The coronavirus pandemic caused disruptions to the labor market, especially in sectors such as forestry and oil and gas that have been severely affected. Figures show that in March alone, about 117,000 workers lost their jobs, many of whom young women. The decline in employment is 23.4 percent among women under 25, compared to 14.2 percent among men under 25. The high jobless rate is mainly related to the fact that young people make for the majority of workers in some sectors like the food service industry. Bars, restaurants, and cafes closed doors, and some retail shops closed or moved online. With an unemployment rate standing at 13.4 percent in April, the job market in Alberta is among the hardest hit in Canada. The unemployment rate skyrocketed from 8.7 percent to 13.4 percent in just one month. In fact, Alberta’s job loss rate is the third highest after Quebec and Newfoundland and Labrador, where the jobless rate stands at 17 and 16 percent, respectively. The province lost some 243,000 jobs in April, and many towns and cities saw their jobless rates soar. The unemployment rate increased from 8.6 percent to 10.8 percent in Calgary while the jobless rate jumped from 7.9 percent to 10 percent in Edmonton.
According to Kenney, this is due to a combination of factors such as the global economic shutdown, coronavirus pandemic, drop in oil prices, and floods in northern Alberta. Mary Moran, CEO and President of Calgary Economic Development expressed hopes that the unemployment rate in Calgary will drop when companies begin to reopen. The impact of the nationwide wage subsidy program is still to be seen.
While many lost their jobs in Alberta, close to 50 percent also worry about piling debt. A recent survey shows that half of Albertans made risky financial decisions and are now concerned that they will never get rid of debt. The Ipsos survey reveals that 47 percent of people are only making minimum payments or borrowed larger amounts than what they could afford to repay. According to Calgary debt expert Donna Carson, borrowing to meet day-to-day needs, buying on impulse, and making minimum payments makes it nearly impossible to get rid of debt. In her opinion, the main reason for this may be poor financial literacy.
About 29 percent of people in Alberta have no unpaid debts but a hooping 19 percent believe they cannot afford to pay off their debts. The remaining 48 percent have outstanding balances they expect to repay but they think it will take about 8 years to get rid of debt. This is in light of the fact that according to experts, it will take longer for Canada to recover than the U.S. because of dependence on the gas and oil industry, high household debt, and other factors. This year the province is also expected to experience a serious economic decline of 5.8 percent due to the coronavirus crisis. The good news is that the Conference Board of Canada expects 6.1 percent growth in 2021.