Some tough choices for Alberta's oil-based economy

EDMONTON, Alberta, Nov. 18 (UPI) -- The central component of economic hardship in the oil-rich Canadian province of Alberta is a lack of diversification, the provincial leader said.

The provincial government started the year with efforts to diversify an economy that relies heavily on oil for revenue. A jobs plan that includes more than $30 billion in capital spending emphasizes market diversity and small business tax breaks to boost regional prospects.

The province lies at the heart of the Canadian oil sector and lower crude oil prices have resulted in a 3.7 percent contraction for the provincial economy. Speaking from Edmonton, Alberta Premier Rachel Notley told local and county leaders that economic slowdown was among the top regional concerns.

"Low oil prices are hurting the rural parts of our province," she said. "Oil and gas spending is down, damaging small businesses in the service sector, while local governments are struggling with declines in tax revenues and public spending."

The government in September unveiled a $23 million package to help pay for long-term, locally developed projects meant to create jobs and diversify the provincial economy. While much of the region relies in part on the energy sector, the premier said the core component of economic difficulties was the lack of diversification.

"That means we have to change some of what we've been doing -- even if we don't want to," she said.

With the U.S. election of Donald Trump as president, Notley said there was renewed potential to expand oil pipeline networks through the United States and she vowed to protect Canadian trade interests amid uncertainty surrounding the North American Free Trade Agreement.

While the United States is the top export destination for Alberta's crude, the premier said reaching beyond North America would be advantageous as oil in China is selling at a premium to West Texas Intermediate, the U.S. benchmark price.

Elsewhere, Notley said sectors like forest and agriculture are supporting rural Alberta economies, with agriculture accounting for more than $7 billion in annual exports.

"We'll know very soon whether Alberta's landlock is starting to crack," she said. "However, we can't limit talk of market access to energy."