History of the Calgary Economy: Research and Trends on the Alberta Rollercoaster since the 1970’s

Alberta’s rollercoaster economy has given Calgarians a lot of resilience, making us who we are today.

If you’re new to Calgary, the blue-sky city, but want to understand how our political leanings and entrepreneurial attitude originated, this article will help you tremendously.

And if you’re a seasoned Calgarian, as I am, then sit back and enjoy a fond trip down memory lane, tied in with a deeper understanding of the factors behind your ups and downs over the years…knowing that perhaps your troubles were simply part of something bigger affecting the Calgary economy.

The Team Behind the Story

I moved to Alberta in 1975 from the Maritimes, landing first in Fort McMurray, and then Calgary in 1980. After university, I started a business in 1996 offering market research and marketing services. My clients have been a vast assortment of every industry here in Alberta: energy, agriculture, high tech, construction, products, services, and even some non-profits and institutions, mainly because I have a policy that my clients cannot compete with each other. Alberta’s ups and downs have hit my company many times, but thanks to tenacity, (hence the name Tenato) here we are.

Along the way, I’ve worked with many fascinating entrepreneurs – two of whom I would like to introduce to you now: Duncan Robertson and Gil Dawson, of Turnstone Strategy. These brilliant fellows have spent decades studying economic trends predominantly in energy, real estate, banking and investing, to advise clients specifically in these areas. Over the years, I’ve often leaned on them to get a grip on Alberta’s ever-changing energy scene, and its effect on the Calgary economy.

Gil chuckles that Turnstone, although a leading resource for many A-list oil and gas firms, hasn’t had the easiest road in business over the years either. “Our problem is that we’re 6 months to 2 years ahead of everyone else’s predictions, because we always look for leading indicators. You can tell people there’s a bulldozer crash coming, but you don’t know when it’ll hit, and when to get out of the way. The second problem is that we don’t predict the future to two decimal places. It’s literally impossible. But that’s what all the other economists do.”

In other words, they’re not always popular, but I’ve never seen them be wrong.

Since I’m approaching 30 years in my own business, and seeing just how much Calgary has changed, this seemed like the perfect time for a look back…and I knew my old friends at Turnstone would be the perfect resource to reflect with.

Gil Dawson of Turnstone Strategy Inc.

Duncan Robertson of Turnstone Strategy Inc.

The Booming 1970s

Ah, the glory days of the 1970s. As a young kid, I remember my family living in a newly built bungalow in Fort McMurray, Alberta’s infamous home of the oil sands (or tar sands to environmentalists).

My father was making the big bucks in a shiny new job at Syncrude. Many of our friends had followed us from Newfoundland’s Come By Chance refinery to Fort McMurray as well, which is why Fort McMurray was often called Little Newfoundland back then. As a kid, although Alberta was new, I was delighted to discover that so many of my childhood friends had come along, and young families often got together to enjoy simple barbeques at Gregoire Lake or someone’s backyard. My parents even made our basement into a dance floor, since there were so many parties then.

Duncan and Gil describe the 1970s as an “explosive” time in Alberta’s energy industry. Gil arrived in Calgary in 1977, and was working as a rookie at Amoco. He said, “Our staff turnover was 35% a year. Every day, people were leaving to take better offers somewhere else.”

I was curious about what really sparked the boom. “It was OPEC, the Organization of the Petroleum Exporting Countries,” explains Gil. “Oil had been stuck around $3/barrel forever. Alberta had been an oil producing area for a long time already, but at $3/barrel, it wasn’t giving much profit before OPEC.”

OPEC formed in 1960 as an organization of the largest oil-producing countries, mainly Arab countries. But in 1973, it decided to flex its muscles by cutting supply to drive up prices. Why? “Because the Americans supported Israel in a war, and OPEC despised Israel. They wanted to limit supply to make the Israelis, Americans and other countries pay more,” says Gil.

Duncan explains, “OPEC basically created a monopoly, but since these were countries acting together, there was no over-arching government to prevent it.”

The effect was dramatic.

Gil describes how it felt on the ground. “My wife was in California then, and had to line up with her car on certain designated days of the week to buy gas at the pump.” But with the world prices up, all the oil companies, even North American ones, were suddenly in an unprecedented profit situation.

 Duncan notes, “Crude prices went from about $3 a barrel in 1973 to around $12 a barrel by early 1974.”

Gil adds, “I remember having to hoard office furniture, because our business was hiring people so fast. I’d trade multiple coat racks to get a bookshelf. And my boss only had one more year of experience than I did.”

For US consumers though, who were so desperate for supply, President Nixon made a deal with OPEC to not oppose their monopoly, so long as the US got enough supply.

So oil prices continued to climb as the Israel war carried on. “Then things got even more dramatic when one of the OPEC members, Iran, deposed their Shah and went into mayhem, shutting off their portion of the OPEC oil supply,” adds Duncan.

So, whereas oil prices had been stable since World War II and industrialization around $3 per barrel, they reached $30 by around 1980.

A new hotel in Fort McMurray in the 1970s

A 1970s newspaper clipping discussing Fort McMurray, the Boom Town

The 1980s: Why Albertans Never Vote Liberal

In 1980, my father was offered a big job at Husky in Calgary with a much higher salary. Not only was it a great opportunity for my parents, but their three daughters would be close to a university, which was extremely important to my mother.

So with a family of five and a whining family cat that only quieted down when Dolly Parton was on the 8-track, we crammed into the Pontiac Parisienne for the long drive from Fort McMurray to Calgary. I remember my Fort McMurray school friends telling me I was super lucky, as I’d soon get to see my first Calgary Stampede, which was a very big deal.

Calgary seemed like a huge city, with construction cranes everywhere. (To this day, a great deal of the construction in Calgary is 1970’s vintage – that dull, squarish concrete that looks like it was slapped up in a hurry, which it was).

But problems were arising.

“Inflation was out of control because there just wasn’t enough labour, and the US Central Bank didn’t move aggressively enough.” Gil explains. “Mortgage rates shot up to over 20%.”

The scarcity of oil and spiking inflation pushed the economy to the limit. Prices were high enough to reduce demand, while those very high prices had already created a glut of supply that now, no one wanted.

“Making matters worse, in 1980 we had the start of the National Energy Program (NEP),” recounts Duncan. “This was a policy introduced by the Federal Liberal government, led by Prime Minister Pierre Trudeau, you know, the father of Justin Trudeau, designed to control crude prices within Canada to make crude cheaper for the other provinces.”

The effect of price controls by the NEP on Alberta energy products was so damaging that companies began suspending operations and cancelling major projects. Companies were announcing thousands of layoffs at a time, and the headlines were devastating.

To oppose the NEP, Alberta Premier Peter Lougheed threatened to shut down oil supply to the eastern provinces, as the Alberta economy screeched to a halt. Although Pierre Trudeau was not re-elected in 1984, a lot of damage had been done, and mega-projects, along with thousands of jobs, never recovered.

It also changed thinking in Alberta. “Alberta had signed an agreement in the 1960s to accept inter-provincial wealth re-distribution, in other words, what we now call the transfer program. As a smaller province, before oil took off, Alberta just depended on agriculture. So we’d thought we’d benefit from transfers in. So that deal wasn’t forced on us in the first place, but today it’s apparent that with oil in Alberta, the money will probably always flow outward,” says Gil.

Meanwhile on the world stage, the Saudis, who had cut production from 10 MM barrels to 4 MM barrels to keep prices up, realized they couldn’t keep cutting supply forever. “They didn’t want to go so far as to buy crude off the market,” explains Gil, “So they turned the taps back on and flooded supply. Prices dropped from about $30/barrel to $10/Barrel. It created another collapse, resulting in a second major round of project cancellations, and more massive layoffs”.

During this tumultuous period, my father lost his job. Moreover, the “Careers” section of the Calgary Herald, then Calgary’s main daily paper, which formerly had thousands of job ads, vaporized. Not only was my father without a job, but there were no jobs.

I suspect this was when “Trudeau” first became a reviled word in our house, if not the rest of Alberta. Oddly, my mother had a large wood carving of Pierre Trudeau’s face that hung in the family rec room, which she refused to get rid of. My father threatened to use it as a dart board. I think it got a few holes in it when she wasn’t around.

My parents were also panicking about mortgage rates (which were over 20%), and although we never actually lost the house since my mom was working as a junior accountant, there was sure a lot of drama. Many of my parents’ former co-workers and friends were simply turning in their keys to the banks. Hoards of people fled the province.

I recall people in Alberta buying bumper stickers that read Please GOD, send us another boom. I promise not to p** it all away this time.

Aside from the 1988 Winter Olympics, which gave Calgary a temporary boom of excitement and pride,  there wasn’t a decent recovery until the 1990s. So, although my family couldn’t afford to attend any of the Olympic events…I did go pin-trading in Olympic plaza, since pin-trading was a cool way to collect something from around the world. I had a boyfriend who got to see the opening ceremonies too, since he was lucky enough to land a job as a walking hot-chocolate dispenser.

No Calgarian will ever forget the David Foster-written musical theme of the 1988 Olympics: “Prumppp pump! Da da daaa da, da daaa da, da daaa da,” or Eddie the Eagle flying off the 90-metre ski jump, with the simple goal of surviving the landing. Calgary, too, was desperately trying to survive its own landing.

Political cartoon from the 1980s about the Canadian economy

Hot chocolate vendor in the stands of the McMahon Stadium

People forming the Olympics symbol using handheld signs

The 1990s

In my first couple of years at university, I was taking business courses with the aim of being an accountant. Given the family’s economic uncertainty, my mother had begged me to a) not get pregnant and b) get a degree (preferably accounting) so I’d always have a steady job.

No matter how hard I tried in accounting, I was always a few cents out of balance, so I took a marketing major, graduating in 1992. There were still almost no jobs, but I hustled harder than most, and landed a job in a small company that manufactured photographic displays, mainly for oil and gas companies who were attending tradeshows.

For a little while, my father was re-employed. But it was not enough. In 1992, he and my mother decided to leave Canada and work in the Middle East, where the pay and security were a lot better. They stayed in Bahrain for two years before exiting the energy industry completely and moved back to Eastern Canada. Since I had a full-time job, I stayed in Calgary, met my soon-to-be husband and got pregnant a little sooner than expected (sorry Mom), but still happily.

Leading up to this, OPEC was antagonizing the US by nationalizing (i.e. grabbing and taking ownership) American projects in Iran, Mexico and Venezuela. “It was an outrage. Amoco’s board members got so gun-shy of foreign investment, they could barely buy a Mercedes,” laughs Gil.

“So naturally, American firms leaned into Alberta, and began retooling all their major refineries to accept heavy crude from Canada,” explains Duncan. “The Alberta oil sands were in relative infancy compared to natural gas at that time, and oil sands product was ‘crude’ in both senses of the word.”

 “I remember drilling for natural gas in Primrose, near Cold Lake Alberta,” recounts Gil, “and when we found heavy oil, we considered the project a failure.”

But the need for volume boosted interest in Canadian oil sands, spurring many US oil companies (BP, Amoco, Chevron, Exxon) to move into Alberta and invest. The free trade agreement (NAFTA) negotiated between Canada’s new prime minister Brian Mulroney and US President Ronald Reagan further helped the flow of crude to the US.

About this time, I started my marketing business, shortly after having my first baby and getting married, which came a bit sooner than expected (sorry, Mom). The economy was fairly steady, and I didn’t find it difficult to seek and land new clients. Entrepreneurship seemed alive and well.

Then strangely, in 1998-1999, world economies started collapsing, first with Thailand’s massive currency devaluation, followed by Indonesia,  South Korea and Malaysia. “So of course, another recession rippled back to Alberta, as many oil companies did business there,” explains Duncan.

Tenato CEO Jacqueline Drew after graduating from business school in 1992

Tenato CEO Jacqueline Drew with her first child

A Sidebar: Origins of Alberta’s Discounted Oil

I was curious about why Alberta’s oil prices (WCS) have been chronically below the US prices (WTI), to see if there were historic origins — mainly because it’s always a hot topic on Calgary’s streets.

“Alberta’s oil has always been less expensive because it’s less refined, so it requires transportation and refinement costs,” explains Gil. “But the other reason is that when our pipelines are full, we have to discount oil because there is no way of getting it out of Alberta.”

That said, Gil explains that having a pipeline to our coasts to reach global buyers wouldn’t likely raise WCS prices right away. Why? “Because we’d still have to match European prices, and we have way more transportation costs.”

So how would Alberta benefit from coast-reaching pipelines? “To not feel pressured by the US, and to stay in control,” explains Gil. But he adds that we’re really not at the US mercy to the extent that many people believe. “The truth is, the US economy couldn’t run without our heavy oil, because it’s around 75% of consumption in the Northern US.”

Duncan adds, “It’s because major American refineries are still tooled for our heavy oil, which was an outcome of the Arab oil embargo in the 1970s and 1980s. They need us. Without our heavy oil, their economy would grind to a halt. Interestingly, they actually export almost 30% of their own light oil because it’s too volatile for their own refineries.”

So to be perfectly clear, if we had another coastal pipeline, would this help?  “Yes,” says Duncan, “It just takes time to build it. Getting access to international waters would give us a global price, not just a US price.” explains Duncan. “It’s just that politics is preventing this from happening.”

So, when transfer funds (largely cash from Alberta’s energy industry) exit Alberta to prop up the needs of other provinces, and then those other provinces won’t help Alberta by accepting a pipeline to reach the coast, it does create a lot of resentment in Albertans. Hence Alberta’s voting for any party they feel will fight for Alberta’s provincial rights, which is almost always anybody but the Liberals (who, as explained, created the NEP).

Now, let’s move on with the progression of what’s been happening here in Alberta since the new millennium, and its impact on the Calgary economy.

The Millennium Begins: 2000 – 2010

What I remember about the new millennium is people and businesses going crazy over “Y2K”, The Year Two Thousand, because either a) the world would end or b) all the computers, which had 2-digit date settings, would simply cease to function. Companies spent billions of dollars making sure operations wouldn’t grind to a halt, while other people overloaded their pantries and planned insane parties. For New Years’ Eve, we took the kids and set off fireworks on frozen Lake Windermere, where many Calgarians go to enjoy the beach in the summer. By January 1^st, the hoopla had passed, and since the world was still standing, life resumed as normal.

  So if not Y2K, what has defined this new millennium so far?

“This century has been all about China,” explains Gil. “China’s massive population and industrialization have had a huge impact on increasing crude oil demand.” 

Population also grew within the OPEC countries — and since they needed that production for their own growth, they couldn’t export as much for profit, or invest in new technology.

However, other countries were still investing in technology, specifically the internet.

I remember all the media screaming about the advent of the “INFORMATION SUPERHIGHWAY” and many news stories about how it would change the world.

As crazy as it all sounded, it was an understatement. Not only would it soon revolutionize work, entertainment, and socialization, it had an immediate impact on the economy.

 “Trading and investing was once the purview of professional traders,” recounts Gil. “And they lived in a physical world. They’d look at supply and demand levels and set a price based on something real and physical.”

But internet traders weren’t like this. “These new traders would base their price bids on concepts or charts. They were not like oil and gas people, and they didn’t know the physical aspects of supply and demand,” Gil foreshadows.

Duncan adds, “A lot of bidding was based on market sentiment. People who didn’t look at the physical factors of supply and demand would simply react to what others were doing. It was a herd mentality.”

Based on this flood of new internet-based money, a gigantic boom was growing.

Oil prices skyrocketed until 2008. And then crashed – hard.

Duncan recalls the discomfort, as he and Gil clearly saw the crash coming. “In March 2008, and again in April 2008, we did public presentations right at Calgary’s Bow Valley Club to reveal our economic predictions. Crude was sitting at $140/ barrel, and we predicted it would go to $40 within 6 months because we were looking at the physical oversupply. But the mainstream didn’t agree. Even major banks were predicting $200/barrel. We lost clients because of our contrarian opinion, but by September 2008, the markets certainly proved us right.”

 At this point, Duncan and Gil add a little sidebar of their own. Duncan mentions that since a recession is defined by two consecutive quarters of negative GDP (Gross Domestic Product), it is a very inexact number. The problem is, he says, “If you predict a recession based on GDP numbers, as the banks do, you are already 6 months in before you know that there’s a problem.”

Gil further remarks, “The blue-chip US economists revised their starting point of the 2008 recession back to December 2007. But that was 12 months after it happened. A lot of good that does. And then they present their data with two decimal points, as though it’s that precise.”

 I was curious: How did Gil and Duncan see it coming? “The entire system had a problem. No more cheap labour. Low unemployment. Sub-prime mortgages in the US… Inflation that was out of control. Crazy household debt. Those fundamental factors were the cause, we just waited for a catalyst.” explains Duncan. “Which turned out to be Lehman Brothers’ — a huge investment firm in the US, that went down. Probably one of their customers couldn’t make a payment, and then it started a chain reaction over the entire US economy,” explains Duncan.

So in 2008, the stock market fell 50%.

In Alberta, the shock was acute, and lasted into 2009, and 2010. I felt it in my business too. I had a client who was buying rental properties, upgrading and breaking them out into condos, and selling them for high profits. I remember all sorts of companies doing similar things, since real estate was red hot. My client was doing so well, and growing so fast, they hired a whole marketing department in house, and then terminated our contract. But about a year later, they had over-leveraged themselves by buying too many properties, and everything imploded. This over-leveraging was what everyone was doing at the time. I too lost some money I’d invested in their business. But at least they didn’t convince me to second-mortgage our home so I could invest much more than I had, which I did seriously consider.

Luckily, my husband is very cautious.

Our business had a very difficult year in 2009, with projects getting cancelled, and absolutely no business leads coming in the door. We actually thought it was something wrong with our branding and completely overhauled our brand and website. Although it was expensive, this pushed us into a better position for the coming decade.

Calgary economy causes grocery inflation

“Business card” for Tenato CEO Jacqueline Drew’s second child

Debt and More Debt: 2010-2020

At the start of the decade after the 2008 crash, the US government released a ton of free money, i.e. loans with zero-percent interest rates. “This created a lot of debt and a lot of risk, but stimulated the economy, albeit artificially,” explains Duncan.

In Alberta, the oil sands were now more mature, and the newly-tooled US refineries were steadily building volume. Things felt like they were turning around.

Then, there was a tremendous flood in Calgary and surrounding areas in 2013. It was so big that it almost wiped out the entire Stampede grounds. Calgary’s can-do attitude seemed to bring the city together, and the 2013 Stampede miraculously went ahead as scheduled. Our family donned disposable Hazmat suits and went down to assist the official cleanup efforts an hour south of the city in High River, where people were throwing away their homes’ entire contents into piles on the streets, including unopened, rotting refrigerators.  Even though thousands of homes were lost, and the provincial debt ballooned to support the recovery, the province carried on. And the Stampede’s popular “Come Hell or High Water” t-shirts were the hottest fashion item on every Calgary street.

 “At this time, China was also accumulating a lot of debt. They were investing in infrastructure and export capacity, thinking it would lift their economy. They were basically following the US strategy, but on a much greater scale. But these assets weren’t being used. So here we have China, at 18% of the world’s population, generating 50% of the world’s debt growth,” recounts Gil.

Then there was the Greek debt crisis. Who’d have thought that an entire country could go bankrupt?  “As a result, all of Europe’s growth flattened, and then the Asian debt caught up to them. Oil prices dropped from  $100 to $40 per barrel in 2014,” says Duncan.

 Alberta, which largely depended on these prices, was back in recession, and countries were trying again to climb out of the red.

China restimulated their economy in 2015-2016, achieving a temporary effect, but by 2019, their resources had run out. “In fact, countries around the globe were starting to realize they couldn’t just spend their economies back into action,” says Gil, “So by 2019, Duncan and I were convinced another recession was coming, even though it hadn’t happened yet.”

An example of the aftermath of the Calgary 2013 flood

An example of the high housing prices in Calgary

 2020: COVID-19 takes hold

Although originating in China, COVID-19’s impact in Italy is what catalyzed global panic. “Some people think that Canada’s lockdowns were a political decision, but Duncan and I saw it as supply and demand,” explains Gil. “If hospitals hit maximum capacity, then like Italy, no one would get medical attention, and everyone who contracted the disease would go untreated and could die. Lockdowns just prevented out-of-control demand for care.”

And there were definite economic impacts.

Since no one was leaving their homes, demand for fuel dropped like a rock. Recounts Gil, “I remember my wife saying, wow, gas is only 40 or 50 cents a litre, let’s get some! I said, we gotta get the fuel indicator off of F (full) first!”

After a few months, the lockdowns lifted, albeit sporadically.

Meanwhile, OPEC didn’t react quickly enough, and suffered from dramatic oversupply. “In fact, for a couple of days, the price went negative because they couldn’t get rid of their supply. HOD, which is an Exchange Traded Fund software used for shorting oil, shut down altogether,” says Duncan.

But OPEC eventually got on top of the problem and successfully kept supply below demand throughout the rest of the COVID crisis, so prices had some protection.

In Calgary, the economy screeched to a halt. Small businesses were scrambling to stay afloat, and families who had elders in care homes and hospitals were reeling from the isolation.

Our business, Tenato Strategy, gave free assistance to help clients move their businesses online, and rolled our priced back to the bare bones. My husband and I also grabbed our musical gear (I am also a musician) and helped stage morale-lifting shows and community jams in soccer fields around the city. When the Stampede was cancelled, we made chuckwagons out of cardboard boxes, and let the neighbourhood kids race them with the help of jugs of hand sanitizer, and community volunteers. When high school graduation ceremonies were cancelled, we put on parades in cars through the community.

Tenato lost money that year, as did everyone, but we were still afloat, and made tons of new friends in our community. We also discovered artists, performers and musical acts wherever we went – who’d have known there was a world-class Elvis impersonator living in Walden?

“Chuckwagon race” at an outdoor community event

Jacqueline Drew, Tenato Strategy CEO, performing at an outdoor community event

Post-COVID: Russia Invades Ukraine, and Trump’s Influence Begins

For a long time, it seemed like COVID would never completely end.

On the upside, it dramatically changed the rhythm of work. People now worked from home as much as they pleased, learned to do video meetings, and ordered food and goods online to their heart’s content. Recalling my time as a young mother, I could appreciate the difference this would make to women in the workforce.

However, as a marketer, I noticed that a great deal of money was leaving Canada, being spent on products from companies like Amazon, and expensive advertising on Google. Small companies that could not easily attract online sales signed up quickly with services like Skip the Dishes (if they were restaurants), Air BnB, or Etsy to attract online buyers. I yearned for more consumers to support their local businesses, and worked to help our clients set up their own e-commerce solutions.

The cross-border buying problem wasn’t perceived as urgent…yet. After economic stimulation, oil prices were rising again.

Russia’s invasion of Ukraine in February 2022 created fear in the market over supply security, which boosted oil prices.

“After COVID, the US had also been spending massive amounts of money to re-boot their economy. Biden started the spending, but a lot of the growth also came from immigration, which supplied cheap labour, and demand for American goods,” explains Gil.

Here in Alberta, we faced another problem. While the oil patch continued to grow, pipeline capacity was still limited, and the other provinces were balking at cross-Canada pipelines.

“Then, in Trump’s first term, he approved the Keystone pipeline. But several states pushed back due to environmental protests,” explains Gil. “So as soon as Biden was elected, he killed it.”

In fact, as Duncan and Gil explain, Alberta’s natural gas, originally 60% of Alberta’s energy profits, is still waiting for pipelines. “Western Canada has the best, super-producing gas assets, but the lowest prices. The last pipeline was the Coastal Link built in 2023, which is tied to an LNG facility. But it’s still not fully operational,” says Duncan. “No one wants to invest in pipelines, so we have to live with 30-40 cents per MCF.”

Today, and Looking Forward

So how are economic indicators looking today? “Superheated. In other words, pre-freefall. Unemployment is near zero. The economy can’t keep growing when everyone is employed. Housing prices and inflation are up,” says Gil. “So frankly, we’re waiting for the next recession.”

As mentioned, Biden’s administration in the US had been pouring out stimulus, but with diminishing returns. “Fundamentally, the economy can only continue to grow so quickly before it levels off,” explains Duncan, “Trump took office again in 2025 at the top of a peak, and it’s got to come back down regardless.”

A decline might also be exaggerated by Trump’s global policy.

“With all the changing tariffs, countries are losing trust in the Americans,” says Gil, “so that could be the catalyst for a freefall, and maybe a deeper one that would have occurred without Trump’s policies.”

This time around, it seems that government spending won’t soften the recessional blow. “Trump Republicans don’t want to spend anymore. And when they are spending, they’re investing in defense and deportation, neither of which will get the economy recovering.”

But I had to ask – what indicators are most telling now? Duncan replies, “Unemployment is almost zero. And there’s an inverted bond curve. This means that usually banks lend at low interest rates, and keep higher ones later. We’re seeing them higher now, and lower later, which is a sure sign of recession…so there’s no incentive to lend.”

“We’ve been seeing the pressure building toward recession for a couple of years, but as of now, we’re in it,” says Gil.

I don’t know if I wanted to hear the answer, but I asked the question anyway. How bad will it be?

“Well, the average recession lasts 18 months to two years. Each recession is its own beast, but now, world relations are in tatters. No one trusts anyone. China is a basket case. Debt is still way up post-COVID. Even the US has inflation because of the tariffs. The President is unpredictable and may make it worse,” says Gil.

Duncan points out that despite a recession looming, the stock market is currently up.

“No one believes the conditions now. It’s all based on mood and sentiment, not actual supply and demand.”

I find this fascinating, because I had thought Trump’s policies were the reason for a recession. Maybe he has enough Americans believing his policies are positive to keep the recession from actually occurring?

 “Well, for a little while, maybe. Trump is not responsible for all the economic conditions to cause the recession, but his actions are the brick that will break the dam,” Gil says, “And he can make it worse if he pretends the recession doesn’t exist. Raising tariffs is driving uncertainty, and deconstructing global relations and trade.”

Recent US immigration and deportation policies could make a recession feel more extreme.

“Trump is curtailing immigration. This means that labour sources in the US are reduced,” says Duncan. “In addition to cheap labour, there are also fewer buyers for American goods. This will have a huge impact on businesses.” 

Will the US recession be worse than ours? Could Alberta get off easier? “Canada is a net exporter. If your biggest customer goes belly up, you will too. When they have trouble, we’ll have trouble,” says Duncan.

Gil reiterates that for the last two recessions, recovery only occurred when the US and China poured massive amounts of cash into their economies. “Without that,” he says, “those recessions might have been much worse.” And given his comment about Trump spending policies, it seems likely that they won’t shorten any recession.

So I ask, would a recession hit Alberta worse than it does other Canadian provinces, and decimate the Calgary economy? “Yes, there’s a good chance oil could go as low as $30 – 40/bbl, while it’s now around $65… but eventually it will bottom out and then recover when OPEC cuts supply. GDP will slow, and activity will slow,” explains Duncan, “The other provinces aren’t dependent so much on energy sector jobs, so they may not feel it as much.”

And what if Trump tariffs Canadian energy? “I don’t see him doing that – it would hurt the US too much,” says Duncan. “Refinery margins are so razor-thin, there would no ability for the refiners to absorb the tariffs. Retail prices would be insane, and the refineries would likely shut down altogether. It would devastate the US economy.”

Being that 2030 is just a few years away, I have to ask the question – are we heading for another, new-millennial dirty 30’s type economic depression?  Gil muses, “Well, we have similar conditions, and they’re three-fold. First, the tax on trade (tariffs) which started in the 20’s. Next, the high debt after World War One, creating great inequality in wealth. Just like today, most average people are vulnerable to dropping into poverty at any time because the wealthy people have so much that they just buy more equity. Likewise with wealthy corporations. And unlike 1930’s, there’s a lack of youth population – which will mean fewer earners to support the elderly.”

 In Alberta, Gil says we can expect our provincial revenues to drop, because they’re dependent on oil and gas royalties, which are still Alberta’s single largest source of revenue. “That means we may have no way to stimulate our economy – we’ll have no quick way to get back out.” 

Optimistically, I ask, could the Canadian provincial transfer payments program finally help us, and give Alberta some recovery cash? “Well, that I’d like to see. Alberta’s population still probably doesn’t carry enough votes to convince the Liberals to help Alberta, since the Liberal votes are predominantly in eastern Canada. But we can dream,” says Duncan.

Dealing with the Trump Administration

“Well, first off, the Trump tariffs are misunderstood. He thinks Canadians will cut our prices and hand the profits over. But profit margins on most companies’ products are so low, it’s impossible. Maybe we can cut 1 – 2 %. But the other 20 – 25%, Americans will pay that.” Gil explains.

That said, Gil concedes that Trump sometimes has a point about America being the buyer of everything around the globe, while other countries are sellers. “It’s true — the US is the only net buyer. They buy everyone’s production, and jobs are leaving the US. Trump’s perspective is right, but he’s going after trading partners that he can’t fix, like China, which controls his rare earth minerals. The US needs those minerals, so Trump can’t win.”   

Duncan adds, “Every country needs to buy some things. Today, even China is outsourcing some production.”

And what about Canada’s new prime minister, Mark Carney? “He’s trying, and some of what he’s doing is working. But he has no control over Trump,” explains Duncan. “I think the best we can do is to try to delay reactions until we’re not the target anymore, and hope something draws Trump’s attention elsewhere.”

Gil puts it in colourful terms. “It’s like jumping off the 10^th floor of the building. You reach the 5^th floor, and think so far so good. If you don’t pull the parachute…in other words, spend a lot to restimulate the economy… it will be a very hard landing.”

He cites the example of the auto industry tariffs. Will there be a deal? “Canada wants concessions, but Trump wants all of our car industry in the US,” says Gil, “So it’s probably better to not to sign a deal at all.”

 Here in North America with all the trade back and forth, it looks like we’ll be stuck doing business with the US, regardless of how difficult the conditions become. “Wait for the sh** to hit the fan when the US citizens really feel the inflation,” says Duncan, “And things could change. He might get desperate and try to work something out. At least then we’d have some bargaining power.”

 Gil adds, “Although experts like former prime minister Stephen Harper speak out and say we should diversify away from US dependence, the fact is, 90% of our exports still go to the US, and this won’t change by much. We’re going to have to ride out, like it or not.”

Now, I’m not going to wrap this article with a “sky is falling” conclusion either. So I’ll say this. As a business that has lasted almost 30 years now, we’ve survived with good fundamentals: good clients we treat really well, fiscal conservativeness, and plenty of marketing, especially in tough times.

Because if there’s one thing Alberta’s got in spades, it’s energy – not just in the ground, but in tenacity.

But here’s one bright light our Turnstone friends have spotted.

“Alberta’s natural gas could soon see higher demand from the US, driving prices up,” Gil reveals. “People think the US has lots of natural gas, but we know they’re getting short on it. They have been building mega facilities for super-cooling gas for transport – but as geoscientists who watch the markets and see the reservoir data diminishing, we know they won’t have enough gas to fill their new facilities.”

And reflecting on everything that I learned today, that’s a little good news I’ll gladly accept.

As a proud Albertan, I still love this city, province and country. It’s like a family – there will always be some dysfunction, but when you have to face a common threat, we unite. The “Buy Local” and “Buy Canadian” messages plastering today’s media are a testament to that.

So, if you’re new here, welcome to the rollercoaster, and may you enjoy the fun, and make us even stronger. And if you’ve been an Albertan for decades like I have, then thank you for hanging in there.

 Rollercoaster, absolutely. But it’s good for a YA-HOO!

I’d love to know your thoughts or memories on this little history piece. Drop me a line at jdrew (at) tenato.com, or book a free consultation if you want to chat about your business.