CALGARY — ATB Financial is predicting more tough times for Alberta in the second half of the year.
The provincially-owned lender says the economy is set to fall by 1.9 per cent this year after a four per cent contraction in 2015. It says the Fort McMurray, Alta., wildfires will stall economic growth this year, but rebuilding will help boost the numbers in 2017 to a positive two per cent.
Chief economist Todd Hirsch says the slowdown in Alberta's energy sector over the summer will mean more layoffs, driving the unemployment rate above eight per cent, up from 7.9 per cent in June.
Meanwhile, he says the weak economy will affect retail and housing markets and lead to a net outflow of interprovincial migrants.
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Here are some of the highlights of the Alberta 2016-17 budget. Story here: http://huff.to/1Nr7xhN
Revenue is pegged at $41.4 billion against $51.1 billion in spending. Projected revenue is down, as benchmark West Texas Intermediate oil is expected to average US$42 a barrel. If oil prices drop to $30 a barrel, the government plans to add a $700-million buffer.
Province is amalgamating 26 agencies, boards and commissions to save $33 million. Salaries and supplies for government will be cut by 2 per cent.
The only new tax is a carbon tax, that will cost households earning more than $100,00 a year about $500 annually. The new tax is part of the province's new climate change plan.
The province has created two new tax credits to encourage investment in small- and medium-sized businesses. Small-business tax will be cut to two per cent.
The government says its spending on employment incentives and capital will create about 100,000 jobs in Alberta over the next three years.