Let’s talk economics, because there is definately going to be a huge economical result of COVID-19 in Alberta and thereby in Canada.
- There’s no way to sugar-coat it: the recession brought on by COVID-19 and the oil glut will be the worst downturn in Alberta since the 1930s. BUT it won’t be as bad in 2020 because of 3 reasons:
- First, the government response to the pandemic has been swift and unprecedented. While the process and details can be frustrating, governments are rolling out money like never before. That didn’t happen during the first years of the Depression when cutting spending was seen as the best thing the government could do. Today, government expenditure will prevent the hunger, homelessness and tattered clothes that marked the 1930s—at least in countries like Canada that have the wherewithal to do so.
- Second, labour markets were much less flexible in the 1930s than they are today. Education and skill levels were lower and the technology didn’t exist to help people work remotely. Most workers toiled on farms, in factories, or in offices doing clerical work. When those jobs vanished, that was that. Today, jobs are being wiped out, but technology is helping many workers stay employed. (Director notes hopefully we will see a better tomorrow that will further take advantage of technology and hopefully revitalize our rural communities.)
- Third, the economic collapse of the 1930s was triggered by runs on banks and stock markets (and deepened by severe drought). Because governments responded in the wrong way, the Depression dragged on far longer than necessary whereas current efforts to maintain the financial system are working.
- The economic pain has been deep and sudden, and the recovery will not be as V-shaped as we’d like, but the downturn will pass much sooner than it did in the 1930s. Admittedly, this is cold comfort for the many Albertans who are wondering when—or if—their jobs will return. But while comparisons to the 1930s may help us grasp the magnitude of the economic contraction, Canadians need not fear the levels of poverty and destitution that marked the Great Depression.
