Provincial government of Alberta unveils stimulus effort to help diversify the oil-based economy. File Photo by Brian Kersey/UPI | License Photo
EDMONTON, Alberta, Sept. 8 (UPI) -- The provincial Canadian government in oil-rich Alberta said it was pushing forward with a jobs plan as the region's economy drags down the nation.
The federal Bank of Canada said national gross domestic product was pulled down in the second quarter by May wildfires in Alberta, which sidelined around 1 million barrels of oil per day. As a whole, the bank said the decline total exports, meanwhile, were more broad-based than expected.
Alberta's government, for its part, said it was offering around $23 million over two years to help pay for long-term, locally developed projects meant to create jobs and diversify the provincial economy.
"This new support will put homegrown projects and economic development plans into action and help ensure Alberta's cities and towns continue to be Canada's best places to do business," provincial Minister of Economic Development and Trade Deron Bilous said in a statement.
In July, the last full month for which Alberta's government has data, the seasonally adjusted unemployment rate was 8.6 percent, up from the 7.9 percent the previous month. The national unemployment rate for July was 6.9 percent.
Lower crude oil prices resulted in a 3.7 percent contraction for Alberta. The provincial government estimated a net fiscal impact of about $387 million from the wildfires. Considering this, the provincial government said it expected to run an $8.3 billion deficit, a figure that's about $400 million higher than previous estimates.
The federal Bank of Canada in July said it expected national GDP to contract 1 percent in the second quarter, but then grow by 3.5 percent as oil production builds in Alberta. The bank said it was keeping rates unchanged.
"The economy is expected to rebound in the third quarter as oil production recovers, rebuilding commences in Alberta," it said in a statement defending its rate decision. "The bank's governing council judges that the overall balance of risks remains within the zone for which the current stance of monetary policy is appropriate, and the target for the overnight rate remains at 0.5 percent."