Why did the World Bank have to come along and spoil the party?  Stock markets plunged on Monday after the World Bank came out and said the world economy would shrink by 2.9% in 2009.  This would be the first contraction in the world economy since World War II. It is funny how markets react sometimes.  We’ve known that the world economy has contracted after the economic meltdown, which started last July.  However, that doesn’t stop an economic report from forcing markets down heavily when it actually hits the media.   I guess the truth hurts.

The bank also said that the world economy would grow by about 2% next year so some of you may say that’s the good news. However, it’s never good when the global economy contracts because it takes so long to get all that wealth and economic activity and lost employment back on the rails.  Our stock markets have been in positive territory for the last quarter and this report was almost a wake-up call for the once in 70 year financial calamity that we just been through.

I had a conversation with a small businessman last Monday.  It was an interesting conversation because he told me he had just returned from western Canada and it was obvious that he was thinking of making the move.  He told me that the purchasing power of the people is so much greater out there and it looked much easier to make money. Of course he was comparing his situation in southwestern Ontario to the booming economies of Saskatchewan and Alberta.  He told me he had talked with businesspeople that had actually moved to Western Canada from Southwestern Ontario and they told him he should do the same thing.

For those of us who live in southwestern Ontario it is a common lament.  This recession is taking no prisoners in Ontario but for our resource-based economy in Western Canada it is not quite the same.  Sure we have seen oil prices retreat over the last week or so but Saskatchewan and Alberta are still the driving forces in the Canadian economy.   I can see it in his eyes.  Needless to say, he asked my opinion.

I told him how would you like -40° in January?  He recalled his head a bit and said he agreed but you get used to it.  That harkened me back to a time in December 2007 when I was invited to speak in Grande Prairie Alberta.  I left London Ontario where the temperature was about 0°C and landed later that day in Grande Prairie Alberta where the temperature was -30° and going down to -40° at night.  Simply put when I got off that plane it felt like the North Pole. Needless to say, I have never experienced cold quite like it.  The lady who took me to the hotel actually commented that in Grand Prairie sometimes it snows every month of the year.

It is difficult for us in southwestern Ontario to imagine how cold that is.  I’m sure our Western Canadian cousins and the many people in southwestern Ontario who have traveled to Alberta for work would say you get used to it. However, I remember one of my former teachers asking me when I got home did I understand why you moved from the West many years ago.  Of course we were both commenting about the cold.

My conversation with a local businessman ended because he was about to take care of another customer.  However our last few words together was about the cold weather.  Needless to say I think he’s a goner. I think he sees the relatively easy money in Western Canada compared to what he is making here in southwestern Ontario and he is willing to do whatever it takes to get that done.  Good luck to him.

Clearly though, the economies in Western Canada aren’t quite like they were.  As the World Bank has said the global economy is going to shrink this year by 2.9% and that has had quite an effect on the price of oil and other commodities. However, people still use them and their market is different than let’s say the market for auto parts from General Motors.  So while Ontario and to some extent Québec falter in economic recession our Western Canadian friends are still doing relatively well compared to what we’re doing here.  They might not have money flowing in the ditches anymore in some parts of Alberta, but Saskatchewan is still trying to get people to come there to take jobs.  It’s like the World Bank has never heard of Saskatchewan.

The World Bank forecast certainly was a bit sensational.  And you have to watch that stuff because next year when they say the world economy will expand, basically they are comparing next year with last year type thing.  And with the economic meltdown of the last year in our minds that’s really not fair.   So let’s hope this latest forecast from the World Bank is one of the last doom-laden commentaries coming from big global agencies.   Its bad out there, we know.    However, Canada is a big country and this current recession has a heavy eastern Canadian accent.  If you must go west, Godspeed.  Someday the economic forecast will be better and southwestern Ontario will be a magnet for jobs.  We can only hope.