Dropping oil price impacts economy

EDITORIAL: the plummeting price of oil may have a big impact on the Canadian and B.C. economies in the next year or two

The plummeting price of oil may have a big impact on the Canadian and B.C. economies in the next year or two.

Some of that will be positive, but it is likely that it will be mainly negative.

The price of gasoline (but not diesel fuel) is falling, and that means more money in the pockets of consumers. This helps them meet other obligations, such as rent, credit card bills and child care. If the provincial and regional governments can avoid the temptation to tax this newly-found money out of people’s pockets, the fall in prices will be a good thing.

One other bright spot may be a boost in exports if the dollar remains low.

The negative implications are widespread. There will almost certainly be a fall in economic activity, and particularly jobs. Many well-paying jobs are concentrated in the oilsands. Many of our residents either work there or work for companies that supply the oilsands.

There will be no new construction projects in that area, as long as oil prices stay at the $60 to $70 per barrel level. It simply costs too much to produce oil from the oil sands. As economic activity is reduced, it impacts taxation to the federal and provincial governments. Alberta, Saskatchewan, Newfoundland and B.C. all are dependent on revenue from oil and natural gas.

In B.C., one LNG project has been delayed by the falling price of oil, as Asian natural gas prices are tied to oil prices. More could be delayed or even cancelled. It is significant that none of the major LNG players are ready to commit.

A fall in economic activity likely means that 2015 will see much lower growth than anticipated, which won’t help the overall Canadian economy.

— Langley Times

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Enderby announces plans for $150K ParticipACTION prize money

The city was crowned Canada’s most active community in June 2019

Fiery collision involving truck closes Highway 1 at Three Valley Gap

Drivers should expect major delays and congestion

RCMP volunteers sought for Vernon, Lumby

Core classroom training set to begin this spring

$55K consultation fees for Vernon to dump effluent in lake

Savings from pumping reclaimed water to reservoir to cover costs

Stinky situation for some in Vernon

Unexpected issue disrupted Thursday’s garbage service, Saturday pickup scheduled

VIDEO: B.C. senior recalls ‘crazy’ wartime decision to grab bear cub from den

Henry Martens – now 96 – says he was lucky to be alive after youthful decision to enter a bear’s den

Heart attacks strike B.C. husband and wife just over one year apart

Courtenay couple share personal stories to bring awareness to heart month

‘Nothing surprises us anymore:’ U.S. border officials find brain in package

U.S. Customs and Border Protection agents found the brain packed in a glass mason jar in a Canada Post shipment

Prolific offenders from Alberta lead RCMP on chase from Kelowna to New Westminster

Men first reported in Chilliwack ending with allegedly stolen vehicle in an Abbotsford pond

Adapting to love along the Columbia River

One man starts a GoFundme to help his partner with health costs caused on the trip where they met

B.C., Ottawa sign sweeping 30-year deal for northern caribou habitat

West Moberly, Saulteau co-manage new protection on two million acres

Eyes on police after Trudeau orders blockades torn down, injunctions enforced

The RCMP in B.C. have sent a letter to the traditional leaders of the Wet’suwet’en Nation

B.C. massage therapist suspended following allegations of sexual misconduct

While suspended, Leonard Krekic is not entitled to practice as an RMT in B.C.

Gas drops below a dollar per litre in Penticton

Two stores in Penticton have gas below a dollar.

Most Read