The collapse in the price of oil has caused an economic downturn in many provinces in Canada especially in the Prairies (Manitoba, Saskatchewan, and Alberta). Many businesses in the oil and related industries closed, people lost their jobs, and unemployment has risen.
The Prairie provinces used to have the lowest unemployment rates in Canada but this year unemployment rate in Alberta has gone above the national average. This has not been observed since December 1988.
|Unemployment Rates, Canada and the Provinces of the Prairies, 1981:M1-2016:M2|
Unemployment in Alberta rose, in January this year, by 60.9% compared to January last year. In February, the year-to-year growth rate was 46.3%.
Saskatchewan also experienced extremely high year-to-year growth in unemployment in the second half of last year. In July, last year, unemployment year-to-growth rate was 62.5%.
But unemployment rate in Saskatchewan and Manitoba are still below the national average. A reason for that is in the importance of the oil and gas extraction industry in these economies. The average share of this industry is respectively 1.2%, 17.7%, and 27.8% in the economies of Manitoba, Saskatchewan, and Alberta.
A way of reducing the vulnerability of the economy of Alberta is diversification.