Back in September, the Conference Board of Canada took a look at the economy of Calgary and didn’t like what it saw.
Although the city had done quite well for the first nine months of 2014, by the end of the year, the falling price of oil was beginning to have an impact on various sectors of the economy – everything from the oil patch itself to housing starts, construction and the service industry.
Economic growth expected to plunge
The conference board’s Metropolitan Outlook, which examined the economies of 13 Canadian cities, predicted Calgary’s economic performance would be among the country’s worst in 2015. Its unemployment rate would climb from 5.1 per cent in 2014 to 5.9 per cent this year, and to 6.1 per cent in 2016.
Economic growth was expected to plunge from 5.1 per cent in 2014 to negative 0.5 per cent this year.
It was only a matter of time for the effects to be felt by the city’s Jewish population, which numbers around 8,500. Early into the oil recession, there wasn’t much to report in terms of changes to community fundraising or a draw on community resources. But that has changed in recent months, though not to crisis proportions, said Judy Shapiro, associate executive director of the Calgary Jewish Federation and Marty Hornstein, executive director of Jewish Family Service Calgary (JFSC).
Still, for those who’ve lost their jobs because of the economic downturn, the situation is grave, even embarrassing. A number of people who were asked to comment for this story declined to do so.
Some who have been brought low by the changing economic circumstances are lawyers and engineers who had done well for themselves – to the extent they had been spending $40,000 a year to send their children to university. Now, they’re facing the prospect of having to scale back their lifestyles. Some who had moved to the province, have left. But “a lot are sticking around to see what will happen,” Hornstein said.
This isn’t Hornstein’s first rodeo, riding the ups and downs of an oil patch recession.
It happened in the 1980s and again in the 1990s, he said.
“This time it’s different, because more people have businesses related to the success of the city,” he said.
Many of those who had moved to Alberta, not necessarily to work in the petroleum industry, but to participate in the economic boom prompted by high oil prices, are suffering. Jobs aren’t coming back anytime soon, and they are facing difficult decisions.
“We’re counselling people who live in their homes, that have sentimental values, that they can’t afford to live there anymore,” Hornstein said.
Still, for many people, that’s tough advice to take.
“They’re going through a death-like experience,” he said.
“A lot of it centres on Jewish pride – ‘I don’t want to let people know I have to move into an apartment,’” he added.
Community organizations have noticed the changing economic circumstances in a variety of ways. You can see it in the annual food drive, which is held on Kol Nidrei night. Pitches are made at the city’s synagogues, and “this year we got less than we’ve received in previous years,” Hornstein said. “We got 10 per cent less than we usually get. The food goes to the side of the story that is the saddest, to people who need the food.”
“Our requests from people for basic needs increased by 15 per cent,” he said.
Something similar is happening three hours north, up Highway 2 in Edmonton, where some 5,500 Jews live.
Larry Derkach, executive director of Jewish Family Services, said “indicators of economic stress in Alberta have been striking: weekly reports of large layoffs, 23 per cent increase in food bank use over last year, another drop in oil prices. Certainly this is also having an impact on vulnerable members of the Jewish community in Edmonton, with issues [like] job loss, food insecurity, financial stress and stress on relationships. We are experiencing increased demands, but unfortunately, I cannot put numbers to that for Edmonton’s Jewish community at the moment.”
Lynne Preston, executive director of the Calgary Jewish Community Centre, said the effects of the oil downturn are only now beginning to be felt.
Some of the JCC’s offerings haven’t been affected, such as its daycare and after-school programming. But enrolment in its program for two-year-olds, geared to stay-at-home moms, has dropped by half, likely because it’s seen as a luxury that people can no longer afford.
Enrolment in the JCC’s summer camp was on par with that of previous years, but numbers for the mid-winter camp are down 10 to 20 per cent, she said.
“I think we’re starting to feel the effects of the downturn now. A lot of layoffs hadn’t yet occurred in the summer. A substantial number of layoffs took place in the last three or four months,” she said.
People are losing jobs in oil, related industries
And that could have an effect going forward. “There could be a change next summer, a softening in [camp] numbers if they continue the way they are,” she predicted.
“I’m hearing a lot more stories telling of friends and family being laid off,” Preston continued. “Those people are losing their jobs in the oil industry, banking, related industries, like electricians and plumbers.”
“So far the impact hasn’t been great, but we’re only just starting to feel the effects,” she added.
Hold on, said Calgary lawyer Gordon Hoffman. Things are not that bad.
“We’re still fine. We’re still busy,” he said of his law firm.
Furthermore, there hasn’t been a major impact on the Jewish community, he added. There have been some layoffs, he acknowledged, but that happens even in good times, along with bankruptcies, he said.
“It’s a cyclical economy. Up and down. This is the engine of the country. We’ll be busy again,” he said.
Hoffman, who’s held a variety of senior positions in Jewish organizations, said Albertans are coping with the situation and “there are lots of people who are busy.”
“We have a great province,” he said, “with charitable people and caring people.”
They are stepping up to help those less fortunate than themselves. Charitable giving is up, he said.
“Sure there are concerns, but the people who have the wherewithal are standing up to fill the breach,” he said.
Community looking to raise roughly $3 million
The federation’s Shapiro believes the community’s major fundraising effort this year shouldn’t be too affected by the oil recession.
Last year, the community raised about $2.9 million, and “it looks like we’re on target to raise the same or a bit more,” she said.
Meanwhile, the community’s Integrated Bursary Program, which provides funds to families who need help to pay for Jewish schools, camps, youth groups and education programs, has seen a jump in requests.
“This year, we had 83 applicants, as compared to 77 last year – close to an eight per cent increase,” she said.
A lot of that demand was driven by newly arrived immigrant families, many from Russia, by way of Israel. “They picked a really bad time to come to Calgary,” Shapiro said.
Based on what she’s hearing from friends and colleagues, there will be “a trickle down” effect from the downturn. “It is only now being felt.”
With layoffs beginning in earnest in September, you can expect less spending, a drop in real estate values, less spending in the service industry and then more layoffs yet again, she said.
It’s a vicious circle, but it’s still fairly early in that process.
“I don’t think we’ve seen the bottom,” she said.
Hornstein said JFSC staff are seeing some of the most troubling manifestations of a slumping economy. Some of those let go from well-paying jobs are now suffering depression, anxiety and worse.
“We’ve seen an increase in the last few months in the incidence of domestic violence,” he said.
Still, the numbers are not really high. Altogether, 12 families are seeking counseling within the JFSC system for issues including domestic violence, housing arrangements and help with the legal system.
“I told our annual meeting that our customer base is going up by 15 per cent,” Hornstein said.
As for revenue to help pay for the increased demand for services, prospects don’t look too good right now. Currently, JFSC receives 10 per cent of its funding from the city of Calgary, 20 per cent from the community’s UJA campaign and another 20 per cent from the United Way, which is expecting to see a drop in the funds it raises.
UJA, United Way fundraising campaigns in “full swing”
The remaining 50 per cent comes from grants, foundation gifts and fundraising the agency does on its own.
“Fundraising is going to be a challenge,” Hornstein said.
In Edmonton, fundraising in both the UJA and United Way campaigns “are in full swing, both being important sources for our work as well as indicators of community philanthropy in general,” Derkach said.
“Last year both campaigns did well, and while concerns have been raised about the potential impact of the economy, I have not heard alarm bells yet. I believe Edmonton’s economy has not been as hard hit as Calgary’s, and sectors other than oil and gas are doing well.
“But even so, it is important to remember that the more vulnerable people in society – those with the lower end jobs, with no savings, with limited job and English skills, with family or health complications – are always among those who suffer first, and that includes those in our own Jewish community who come to Jewish Family Services,” he said.