The think-tank cited this spring’s wildfires in Fort McMurray and a slide in business investment in the oil and gas sector as it issued a new forecast that downgrades its growth expectations for the domestic economy from 1.6 per cent to 1.4 per cent for 2016. That has the board calling for Canada’s economy to grow by 1.4%, down from its previous projection of 1.6%.
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Picture of Fort McMurray wildfires taken from International Space StationUnemployment claims and beneficiaries surged in Canada’s main oil-producing province in May, reaching record levels after wildfires knocked out 1 million barrels per day of crude production.
“On the energy side, I think we’re going to continue to see declines throughout the next couple of years”.
CMHC said it is “too soon” to say what the impact will be on the market, but noted additional buyers and reduced inventory should provide some support for price growth, though low oil prices could also impact the market.
Overall earnings breakeven is expected to be sub-$40 WTI by the end of 2016, as several key projects are up and running, including the 30 Mbbl/d Sunrise project in Alberta and the Edam East thermal project in Saskatchewan, the company said on July 22. “Our membership feels that we have hit the bottom and it’s incumbent on us to pull ourselves out of this and explore new markets and innovate our products and processes”. In Alberta, claims for benefits under the country’s unemployment-insurance program soared almost 70% in May, or the largest monthly gain in any Canadian province since 1997.
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The number of people receiving regular jobless benefits increased 0.9% in May from April to 544,930, Statistics Canada added.
