Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

JASON FRANSON/The Globe and Mail

For International Motor Cars, a luxury dealership in Calgary, the oilpatch is big business.

But as crude prices have shifted into a lower gear, so too has demand for posh rides from energy industry customers, said general sales manager David Baker.

Baker figures the dealership has sold 30 per cent fewer cars this year compared to 2013.

Story continues below advertisement

"I believe it's in direct correlation to the oil patch," he said.

Crude for January delivery fell to around $66 (U.S.) on Friday – down more than a third since the summer – a day after the Organization of Petroleum Exporting Countries said it would maintain its output of 30 million barrels per day rather than cut production and put a floor under prices.

The previous day, the Alberta government predicted that crude prices would hover at around $75 for the remainder of the fiscal year, and warned of "tough decisions" if oil stays at that level.

Still, the chief economist at one of Western Canada's biggest financial institutions is not raising the alarm.

ATB Financial's Todd Hirsch notes that the industry is "a dog that wags an awful lot of tails" in Alberta.

"A lot of business services, a lot of personal services aren't really captured by Statistics Canada as (part of) the energy sector, but they really are quite often times heavily dependent on energy spending and investment," he said.

Hirsch expects the recent price drop may lead to some pullback in Calgary, the white-collar heart of Alberta's oilpatch, when it comes to luxury retail items, discretionary travel and corporate expense accounts.

Story continues below advertisement

Baker agrees there is no need to panic, saying that while car sales have been fewer in number, they have been fetching higher prices.

"I've been selling vehicles in the province of Alberta for 40 years, so I've seen the ups and the downs of oil, I've seen the ups and downs of interest rates," Baker said. "And even though our sales from last year are down, it is still way stronger than it was in '09 and '10."

Event planner David Howard has also noticed the shift but says that, while business is down about 10 per cent this year, it doesn't compare to the financial crisis of four or five years ago – when oil prices plunged to half of where they are today – and business was off 50 per cent.

"I don't think that the panic button has been pressed yet," said Howard, president of The Event Group in Calgary.

While some clients are looking at ways to cut costs at upcoming holiday parties, none are being cancelled since most would have booked their soirees and put down deposits months ago.

But instead of providing unlimited free drinks, some clients are economizing by opting to set up a cash bar or provide a bottle of wine or two at each table. And rather than a four-course meal, perhaps three is enough. Firms might have local acts provide the entertainment rather than book a headliner.

Story continues below advertisement

On the other hand, Howard is already seeing an impact when it comes to events he's planning for next year's Calgary Stampede, the 10-day celebration of cowboy culture that dominates the city every July.

"We've had actually one that cancelled altogether and then we've had another that cut the budget in half," he said.

Meanwhile, the drop in oil prices has been more positive than negative for Ralph's Motor Sports, which has been selling snowmobiles and all-terrain vehicles in Calgary for more than four decades.

It's less expensive these days to haul the machines to the Rockies and fuel them up, said sales manager Rick Stewart.

"Our sales have increased about 35 per cent I would say for our mountain machines and I think it's because the price of gas is down," he said.

It all adds up to what the ATB's Hirsch expects will be a bit of a pause in 2015 – not a bust.

Story continues below advertisement

"A little bit of recalibrating of our expectations might be just what we need," he said, adding that it may bring a "bit of reality" back to a city and a province where expectations "can get a little bit unrealistic."

Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies