By Kate Jackman-Atkinson, myWestman
For the last decade or so, the oil and gas industries have dominated Canada’s economy. Since the oil sands in the west started drawing workers from the farms, fishing boats, forestry camps, towns and cities across Canada, we have heard about little else. Now, that might all change.
Since last November, oil prices have fallen by half– the price of crude oil WTI was $80/barrel in November and closed at just over $45/barrel on Tuesday. No one is expecting it to come back up any time soon. After years of rapid growth, TD Bank is predicting growth in the Alberta economy is to be just 0.5 per cent in 2015. Many oil sands projects are continuing, but with fewer workers and lower capital outlays. Housing activity in Alberta is expected to slow down also.
The federal government and oil rich provinces are expected to take a financial hit thanks to lower revenues from the oil and gas sector. This year might be Manitoba’s chance to shine. This year, the gold in the west may not be black, but instead, wheat coloured.
In their most recent report, RBC predicted Manitoba would be one of country’s top performing provinces. The bank’s latest forecast expects the Manitoba economy to grow by 2.9 per cent, the same as British Columbia and just behind Ontario, which is expected to grow at 3.1 per cent.
While the oil economy is tanking, Manitoba’s economy, which is dominated by manufacturing and agriculture, is set to take off.
Farmers, especially those in the hard-hit cattle sector, are enjoying strong prices. According to Scotia Bank’s report, the second best performing Canadian commodity in 2014 was cattle, which increased by 36.6 per cent over the year. In Manitoba, the story was the same. In the first three quarters of 2014, livestock receipts were up 26.4 per cent, with cattle and calves up 35.5 per cent and hogs up 36.1 per cent. Crop receipts were weaker than they were in 2013, however, 2013 was a very strong year. Last year, farmers saw increases in their soybean and canola receipts.
Manitoba’s manufacturing businesses also had a strong 2014. In the first ten months of 2014, manufacturing sales in the province increased 3.3 per cent, with sales of fabricated metals, transportation equipment, machinery and chemicals leading the way.
While our major sectors had a good 2014, signs are pointing towards another good year in 2015. Around the province, farmers have had a few good years and have been able to invest in their businesses. While agriculture is always hard to predict, if nothing else, farmers should be able to take advantage of low interest rates, cheaper fuel input costs and improved profitability from new investments.
Manufacturers, on the other hand, are extremely well positioned coming into the new year. The Canadian economy may be facing challenges, but our biggest trading partner, the United States has been strengthening following the recession. Additionally, exporters are benefiting from the weak Canadian dollar, making their products more competitive in the international market.
Despite our potential, our province has been the poor cousin to the rest of Canada for far too long. That changes this year, let’s make 2015 the year of Manitoba.