A national think tank says there's reason to be optimistic when it comes to Red Deer's economy.
After two consecutive years of steady decline, The Conference Board of Canada says in its Mid-Sized Cities Outlook that Red Deer could see a rebound of two per cent this year.
“The economies of Red Deer and Medicine Hat, with their close ties to the oil and gas sector, were hard hit by the commodities price crash. Lethbridge’s broad-based economy, however, bucked the provincial trend and managed to emerge unscathed over the last two years,” said Alan Arcand, Associate Director, Centre for Municipal Studies, The Conference Board of Canada. “This year, these three Alberta mid-sized cities will see many of their key industries benefit from recovering oil prices, the low Canadian dollar, and a healthy U.S. economy.”
The board says with the gradual recovery of oil prices Red Deer will see an uptick in the the construction and manufacturing sectors.
With a positive economic outlook comes an increase in employment. Job growth, the conference board says, is expected following a drop of 8.4 percent in 2016.
Reg Warkentin, Policy and Advocacy Manager with the Red Deer and District Chamber of Commerce, said the question of growth in Red Deer is a tricky one.
“It is happening much slower than we had all hoped. We are definitely coming off the bottom, so a lot of those businesses that had been basically down 90% from where they were at the peak of things, they’re starting to stabilize,” he said.
Warkentin added that Red Deer is so dependent on energy prices that it makes any kind of comeback difficult until those prices rise.
“Fortunately companies are finding ways to turn a profit in the slow economic environment. That drilling activity is starting to trickle down into our service sector and manufacturing sector and all the tertiary industry.”
Sectors that have already seen some growth include the oil and gas service industry and manufacturing, said Warkentin. He added that the agri-food and agri-businesses have been booming all along and have been a major stabilizing factor in our economy.
Red Deer has seen some major investment dollars from both the provincial and federal governments for things like the QE II / Gaetz Ave. Interchange, Gary W. Harris Canada Games Centre, and a new courthouse. Warkentin said these dollars have ensured the continuity of employment for many people.
One area in Red Deer that is still suffering, according to Warkentin, is the non-profit sector.
“A lot, or many, maybe even most are having an incredibly difficult time just because so many are reliant on charitable contributions and in this type of economy it’s just that donation dollars are very hard to come by.”
Some challenges that Red Deer will face in the coming year include the bump in minimum wage in September, and the increase in Carbon Tax as of January 1, 2018. He added that these two things are not helping investor confidence in the area.
“While we should be encouraged by [The Conference Board of Canada’s report] and the expected increase to our GDP, I think we really need to come together and focus on how we facilitate and stimulate further growth.”
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