“For years, the trope that oil, gas and other natural resources would drive employment and economic growth in Canada has been common. It’s been the position of federal and provincial governments, repeated by newspaper editorialists and think tanks.
Certainly, resources have played a big role in the building of Canada but the idea that resources – oil in particular – will have a central role in our economy looks more and more out of touch by the day.
As oil prices continue to fall, Western Canadian Select grade heavy crude was below US$20 a barrel on Jan. 6, Canada’s high-cost extraction operations are becoming more and more unprofitable. In Alberta, where prices need to be between US$50 and $80 a barrel (depending on the operation), for long-term profits to be a possibility, tens of thousands of people have already lost their jobs,” wrote Jacob Serebrin for techvibes.com on January 8, 2016.
Serebrin continued, “Throughout it all, though, one industry has continued to grow, in terms of revenue, employment and impact: tech.
In British Columbia alone, around 84,000 people work at tech companies, that makes it a bigger employer in the province than “mining, forestry, and oil and gas combined,” according to The Globe and Mail.
And B.C.’s tech industry isn’t even Canada’s largest. Around twice as many people work in tech jobs (at tech and non-tech companies) in Quebec. Around four times as many people work in tech jobs in Ontario.
Canada’s tech industry is already export-focused and, unlike other sectors, it’s not prone to industry-wide downturns. Silicon Valley can’t increase supply to keep prices low the way Saudi Arabia does with oil.
Certainly, there are trends and fads, individual companies see ups and downs, but as a sector, continued growth appears to be inevitable for a long time to come.”
Read the full article here.
Raymond Matt, CFP, CLU, TEP, CHS