Low oil prices aren’t some blip — they are the next era in Canada’s economic history, and they are already reshaping the country.
In a note Tuesday morning, Bank of Montreal chief economist Doug Porter marked the passing of a milestone: Oil capital Calgary’s unemployment rate is now higher than that of Windsor, the long-struggling auto capital of Canada.
Calgary’s unemployment rate jumped to 7.9 per cent in February, its highest level since December, 1995.
Meanwhile, Windsor’s unemployment rate, not long ago the highest in the country, fell to 7.7 per cent, in what Porter describes as an “amazing turnabout.” (Canada's overall jobless rate rose one notch to 7.3 per cent in February.)
Chart: Bank of Montreal
It's part of what Porter dubs an "extreme regional makeover" in Canada's job market. With gas prices near multi-year lows and booming North American auto sales, Windsor appears to be enjoying a renaissance. House prices there are up a whopping 15.4 per cent in a year.
But Porter notes this situation wasn’t always so unusual — in fact, Windsor’s jobless rate was below Calgary’s in the late 1980s and mid-1990s, “when oil was low and the auto sector was thriving.”
In fact, Porter thinks today’s situation might actually be the norm in Canada’s economy, as opposed to the past decade of high oil prices and a slowly dying manufacturing base, which “may have been more the outlier.”
That’s certainly good news for the people of Windsor; less so for Albertans.