Canada’s regions have a long history of ”œlove-hate” rela- tionships with their industrial drivers. A lot of them resemble David Addison and Maddie Hayes, the lov- able private investigators played by Bruce Willis and Cybill Shepherd in the eighties TV show Moonlighting: ”œI hate you so much…now kiss me!”
Ontario’s relationship with its giant manufacturing sector is straining, partic- ularly now that it is in trouble and has its hand out for help. BC’s forestry sector has powered all regions outside of Vancouver for decades, but lately it’s been wearing down the province’s collec- tive patience. Saskatchewan loves agri- culture when crops manage to grow, but shakes its head in disgust during floods and droughts (which is almost always).
And of course, Alberta has its colos- sal energy sector " those hydrocarbon molecules that have lifted the economic fortunes of the province and almost all of its inhabitants. But in true Canadian form, there are tensions. Even among the business community, it’s a classic love- hate relationship à la David and Maddie.
Lots to love, for sure. Led by the oil sands, Alberta’s gross domestic product has been growing at a rate con- sistently above the national average. In 2006 " a peak year for growth " the rate of expansion hit 6.6 percent. It has vaulted Alberta into the role of ”œlittle engine that could,” helping lift Canada’s economy through the down- turn in manufacturing. The province blushed as it paid off over $20 billion in debt about 12 years ahead of schedule. But there’s hate, too. Many view the oil and gas sectors as Goliath, a bully that needs to be tamed. Despite the thousands of in-migrants to Alberta each year, labour shortages and soaring wages have been punishing for employ- ers. It has been a particularly tough slog for companies in non-energy sectors that have not enjoyed sky-high com- modity prices rise (such as forestry). It has trickled down to every sector in the province, right down to the fast-food joints that need to offer $15 an hour for dishwashers. Construction projects (including provincially funded ones like hospitals and schools) have been over- budget, delayed or cancelled altogether.
Does Alberta’s business communi- ty love or hate the energy patch?
According to a recent survey of over 400 companies within Alberta, conducted as part of ATB Financial’s Business Sentiment Index, corporate feelings are mixed.
When asked ”œWhat has been the effect on your business of the increased demand in the oil and gas sec- tor?” a full 6 in 10 respondents indicated that it was somewhat positive (46 per- cent) or very positive (14 percent). That’s a strong endorsement of the favourable impact that the energy sector has on the province’s business climate.
Included in the 400 companies surveyed are an even mix of companies in six sectors: manufacturing, transporta- tion, professional and technical servic- es, construction, wholesale, and oil and gas. Even if you remove the one-sixth of responding companies that fall within the oil and gas sector (assuming they would have answered positively to the question), a solid half of Alberta compa- nies feel the thriving energy sector has helped their businesses.
But the flip side of this statistic is that the other half feel the steamrolling energy sector has been damaging to, or has had no effect at all on, their business activity. Of all 400 companies, some thought that the increased demand in the oil and gas sector has been somewhat negative (18 percent), has been very neg- ative (3 percent) or has had no effect at all (18 percent). Presumably, the compa- nies that hold negative feelings are ones that have seen workers leave for more lucrative positions in the energy sector.
While there are clearly feelings both for and against the energy sector, on bal- ance Alberta businesses tend to look somewhat favourably at the impact of increased demand in the oil patch. In the love-hate relationship the business community has with the energy sector, there appears to be more love than hate.
That shouldn’t come as a surprise. The list of business sectors in the province that benefit directly or indi- rectly from spending by the energy players is considerable. Engineering, financial services, specialized manu- facturing, business services, trans- portation " there is scarcely a sector in the province that does not have some service to offer an oil or gas com- pany. Even the not-for-profit sector benefits from corporate philanthropy.
The reason the Moonlighting story- line worked so well back in the eighties is that the relationship was interesting. Forget Ozzie and Harriett or Ward and June Cleaver. Tension pairs quite inter- estingly with passion. And it helps make Alberta’s political and economic landscape a fascinating spectator sport.
Love it or hate it, the business of digging hydrocarbons out of the earth has a massive impact on the economy. Almost every worker in the province is touched directly or indirectly by the for- tunes of the energy industry. Learning to harness it, foster it and " above all else " prepare it for a very uncertain future is the challenge Alberta faces.