ALBERTA

Low Dollar Could Hurt High-Flying Albertans, Economist Says

10/04/2014 11:54 EDT | Updated 12/04/2014 05:59 EST
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The low Canadian dollar is good news for the energy industry but it could make it more expensive to live in Alberta.

On Friday, the loonie hit a six-month low of 88.81 cents at the close of trading and despite the recent pounding taken by the oil industry over the past three months, the drop in value of the dollar could help boost the energy sector, which sells in U.S. dollars. 

However, what's seen as a boon for the industry could end up hurting Albertans by leading to an increase in inflation — and some of the problems are already evident in cities like Calgary, says one economist.

"They continue to have a real problem in Calgary, we're beginning to see that now with all the net migration, rental vacancy rates down, rent's way up and it's pushing people into home ownership so we're starting to see house prices move up," said John Rose, chief economist for the City of Edmonton.

Since the low dollar means it will cost more to import goods, Rose says Albertans could see a price increase with food and clothing.

Inflation in Alberta is already higher than the national average and in August, the province saw its cost of living increase by three per cent from August 2013, according to the Consumer Price Index.

Rose says Albertans will likely just have to get used to paying more for things like food and clothing.

The loonie is predicted to stay where it is — or drop even further — for the next little while.

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