The Conference Board of Canada’s latest Major Cities Insights report, released Tuesday, says Calgary and Edmonton will lead all Canadian major cities in the biggest decline in their economies this year. 

The Board is forecasting Calgary’s annual GDP growth to be a negative 5.5 per cent while Edmonton will be minus 5.6 per cent.

The report forecasts key economic indicators for 13 Canadian cities from 2020 through to 2024 as well. And it forecasts Calgary and Edmonton to lead the country in that period with an average annual growth of 4.3 per cent.

“Edmonton and Calgary will be most impacted by energy sector production curtailments and the low price of oil. Construction, manufacturing, utilities, and technical services sectors will contract in both metropolitan areas this year as a result,” said the board.

“Travel restrictions and social distancing measures are having an impact in all major cities. Job losses are affecting income and consumer confidence—providing a blow to spending on accommodations, retail and restaurants in every location. Population growth and new home construction are also being affected across the board. While all cities will be affected by the pandemic, there are regional differences in the economic outlooks based on local sectors and pre-pandemic conditions.”

The report said cities with higher public sector employment will fare slightly better than others. For example, Ottawa’s large public service sector will help retain some jobs in the area as will most cities’ publicly funded healthcare industries, it added

“The COVID-19 pandemic has taken a drastic toll on the Canadian economy, and no region of the country will escape its negative impacts. All major metropolitan economies are forecast to contract in 2020. However, assuming the virus’ spread is contained, and firms can return to normal operations over the summer months, a recovery should begin in the second half of the year leading to sharp rebounds coast-to-coast in 2021,” said Todd Crawford, Associate Director, Economic Forecasting for the board, in a news release.

The report said real GDP in Calgary grew just 0.1 per cent last year, as the energy sector was hurt by production cuts designed to reduce the gap between the West Texas Intermediate (WTI) oil price and that of Western Canadian Select (WCS). Now, a total collapse in world oil prices is adding to the city’s pandemicrelated woes. In the second half of April, WTI and WCS futures slipped into negative territory amid price wars among OPEC nations and a sharp drop in demand as a result of the  
global pandemic, it said.
“Calgary’s real GDP is expected to contract by 5.5 per cent in 2020. The first half of the year will be particularly weak, with a forecast decline of 0.8 per cent in real GDP for the first quarter and an 8.5 per cent drop in the second. As the pandemic eases and oil prices begin to strengthen over the second half of this year, our call is for the Calgary economy to expand by 6.0 per cent in 2021. 
“Employment growth in Calgary was strong last year, at 4.0 per cent. The region’s unemployment rate fell to 7.1 per cent, its lowest level since 2015. However, employment had already weakened in the second half of 2019 and is expected to fall more than 11 per cent in the first half of this year. We expect job losses of almost 53,000 in 2020, a 6.0 per cent decline. The unemployment rate will jump to 11.0 per cent, a level not seen in 27 years. Our call for 2021 is employment growth of 4.6 per cent, bringing the unemployment rate back down to 9.3 per cent.”