EDMONTON - Alberta's bragging rights as Canada's economic engine are fading and Premier Ed Stelmach says people seem to be a little grumpy about it.
"Everybody's saying `Ooh! This province is doing better than we are,"' Stelmach said. "Man, I don't know what it is that somebody does better and it's like everybody gets concerned."
The energy bonanza has come to a crashing halt, suddenly putting the province near the bottom of the pack for economic growth in the country this year.
The latest Conference Board of Canada outlook projects growth of minus 0.5 per cent, the first negative figure the province has seen in nearly a quarter of a century. That's in stark contrast to a place that led the country in growth for three years starting in 2004.
But Stelmach actually seems a bit relieved that Alberta is no longer No. 1.
"Thank God!" he said in reaction to the news that Saskatchewan is now in top spot with projected growth of 1.6 per cent. "I hope every province does better. I hope Manitoba, Quebec and the Maritimes don't rely on equalization."
Conference board economist Todd Crawford says Alberta's extremely strong growth over the past few years overheated things in the province.
"Alberta's economy has been running so hot the cost of living has exploded," said Crawford. "Saskatchewan is just at the beginning of a boom, whereas Alberta has been booming for quite some time.
"With all the activity going on in the oilsands and the price of oil coming down 70 or 80 per cent from its peak last summer, we've seen most of the oil companies cancel pretty much every major project happening in Alberta."
But Crawford said oil prices are expected to rebound next year as the U.S. economy begins to turn around, the Canadian economy starts to bounce back and the global economy stabilizes.
"That's obviously good news for Alberta," he said. "We can expect to see the oilsands producers and energy companies begin to reinvest in the province."
The conference board projects that Alberta will climb back to second place in Canada for 2010, with growth of four per cent. But for now, the province is preparing to make some tough decisions as the meltdown continues and the energy windfall that produced surplus budgets for 15 consecutive years evaporates.
"We're going to have some serious meetings with Albertans to see how to ensure that we don't put this province in the same situation that we had to recover from in the early '90s," said Stelmach.
The premier says he's concerned about the impact that Alberta's falling fortunes will have on the rest of Canada.
"Because our contribution to Ottawa last year was quite substantial, it was over $18 billion," he said. "There won't be the same contribution (this year) and yet the prime minister has this equalization pool that he still has to share with the other provinces."
Alberta recently released a grim update on its finances, projecting a deficit of $1.4 billion for the fiscal year that's just ending and 15,000 job losses in the year ahead.
Former Alberta Liberal leader Kevin Taft, who has a PhD in business, says the province's economic future is tied tightly to the boom/bust cycles of oil and natural gas prices.
"There's no question the oilsands boom has gone bust," said Taft, who is now the Liberal energy critic.
"We were riding the crest of the Canadian wave for a number of years and we could easily be going into the trough here," he said. "I think Alberta is in for potentially two or three years of very tough economic news."
Stelmach, however, is more optimistic. He told a business audience in Calgary that he expects to see economic improvement starting next year.
"Although government revenues will probably take a little longer to catch up," Stelmach told the crowd.
"Some departments may even have a reduction from last year, but that's to find money to fund health and education, which are priority areas."
