It’s no secret that the plunge in oil prices is wreaking havoc in Canada’s oil-producing provinces, but economists had expected that to be partially offset by an improvement in other parts of the economy that benefit from cheaper energy.
According to a report by the Conference Board of Canada, it isn’t playing out that way.
In a “primer” ahead of the release of the federal budget next week, the Conference Board says, in so many words, that Canada is getting the sour, but missing out on the sweet.
“You’d think (weak oil) would have a positive effect, that low gasoline prices would boost the consumer and that would have a positive effect on retail and then hopefully business investment,” says Matthew Stewart, associate director of the Conference Board’s National Forecast. “That hasn’t really happened.”
To be sure, consensus is that the overall impact of falling oil is bad for the economy, and Stewart estimates oil producing firms will cut their budgets by about one-third, which is majorRead More »from With budget looming, non-oil provinces not seeing benefit of cheap energy: report