 Finemaster: Darrel Ripley fined Fred for ignoring the rest of the curling team when they were in Lethbridge and going to A & W by himself; then he asked table questions about Rotary such as what are the 5 Avenues of Service for Rotary International (club, vocational, community, international, new generations) and who headed these avenues as directors for Rotary Club of Edmonton West( club is Duart for admin and Spencer for social; vocational is no one; community is Sherry; international is Lorne; new generations is Mike)
50/50: Leslie and Steve did not match cards; $163 carried over (pot is increased every week by $0.50 per ticket purchased at the door)
Guest Speaker: Joe introduced John Rose who is the chief economist for the City of Edmonton. He has practiced as an economist for over 30 years and joined the City of Edmonton management team in 2010. Joe made sure that everyone knew that the only subjects to be discussed before our meetings were either the economy or the weather. John is a t v commentator for both CBC and Global and also is a member of the Government of Alberta's Emerging Issues Committee. Attending meetings like our Rotary Club's lunch is important to John as he needs to hear what other people think with respect to the economy. John's subject is Edmonton's Economic Outlook and covered impacts to Edmonton from the international scene, energy price scenario, Province of Alberta situation in additional to Edmonton and region.
China's growth is slowing which means that emerging markets will do better. The U S economy is improving and the Canadian economy is stable. The European area is doing much better, all of which signal that Edmonton's economy should be ok in the long term. With respect to oil prices the year 2014 started with record highs but started to decline in July and then OPEC decided to not control oil supplies. This caused a serious drop in the international price of oil but Alberta has covered part of the loss by quickly enabling shipment of oil by rail, thus circumventing the lack of excess oil pipeline capacity. Further the price gap between the Western Canadian price and the U S price has been reduced. John showed a table of cost to produce a barrel of oil in various jurisdiction. This showed Alberta at $61; new oilsand developments at $91; and Saudi Arabia at under $25. Thus a price reduction to $30 would hurt everyone seriously except the Saudi group. John's forecast was a price of $60 by end of 2015 and an average of $70 over the 2016 year.
Another table showed the average Province of Alberta growth to be only 1.5% this year but the City of Edmonton doing better. Impacting this, with respect to Edmonton, will be a slowing of the population growth, unemployment rate showing a slight increase to 5.2% and to 6% in 2016. With the increase in the unemployment rate the resulting growth in the available labour force will moderate wage pressure. Recent solid job gains will support consumer spending. Inflation will drop to 0.9% which is good because housing costs over the last couple of years had our inflation rate up to 4%.
Long term factors include the provincial growth rate being reduced to 1.5% caused by a severe reduction because os the low oil price.
The above could suffer dramatic changes depending on the presentation of the Alberta Provincial Budget. If there are big cuts, the City of Edmonton could suffer because of the high number of government jobs in the city which could suffer a big reduction.
2016 could show an increase in growth up to 3% but the oil sands will not attract new projects because no financing will be available.
With respect to risks: downside: faltering consumer confidence, oil price remains low, possible sudden slow down in commodity-dependent emerging markets.
Upside: U S recovery gains steam, Canadian business exports become stronger which boosts growth but mainly for Ontario and Quebec, China and the rest of Asia will suffer a slow down but local stimulation can reduce the impact.
If the downside has the larger impact, then growth in future years will reduce to 2.5% or lower.
John was thanked by Bill
|
.JPG)
