If you live in Alberta, you know that the economy can change quickly. When things are going well, they can be very good. But when the economy slows down, it can hurt your finances. Managing debt in Alberta is important for everyone, no matter how the economy is doing.
How Alberta’s Economy Affects Debt
Alberta’s economy has a big impact on how people manage their debt. The economy goes through cycles of growth and decline. These changes can affect jobs, income, and the amount of money people can borrow. It’s important for residents to understand how these factors are connected.
Given the cycle of Alberta’s boom-and-bust, debt can be a problem whether the economy is good or bad. During good times, people feel more confident and may borrow and spend more. However, in tough times, some may struggle to make payments or need to borrow money just to pay for basic needs.
In 2024, 24.6% of Alberta’s economy came from mining, oil, and gas. When prices for these resources are high, many businesses thrive, and money flows into Alberta. This can also help industries like housing, construction, and transportation grow.
But when prices drop, the economy can shrink, leading to job losses and even company closures. Some people may leave Alberta to look for work elsewhere.
Economic changes also affect government finances. When the government has less money, it has to cut spending or borrow money to meet needs. Because of the boom-and-bust cycle in Alberta, the government often takes on debt during slower periods, when demand for services is higher.
Alberta’s Economy and Debt
In the 2024/2025 budget, Alberta reported an $8.3 billion surplus. However, for 2025/2026, the government expects a deficit of $6.2 billion due to lower revenue. Alberta’s economy and debt often go hand in hand because the province often borrows to meet their budget. This means the government will need to pay high interest rates on the debt, which can lead to higher taxes for residents.
The current economic situation is tough for many Albertans. A recent survey showed that:
- 86% are worried about the cost of living.
- 32% are concerned about job security.
- 51% are uneasy about having enough money for basic needs.
- 64% are worried about rising interest rates.
- 49% faced grocery-related challenges last year.
- 15% had housing issues in the past year.
Trying to pay off debt when money is tight can definitely be overwhelming. Luckily, there are steps you can take to manage your finances during a tough economy.
Managing Debt in Alberta
While you can’t control the economy, you can take charge of your finances, even during hard times. Learning to manage debt in a recession will help you make it through tough economic times.
The first step is to find resources to help you create a financial plan. Residents can check out the federal government’s website for money management tips that can boost financial knowledge and confidence for financial planning in an uncertain economy.
Start by gathering all your financial information to see how much money you have coming in and what you have going out each month. Create a budget that includes your income, expenses, and debt repayment. You might find you have enough income but need to adjust your spending.
Next, look for ways to cut unnecessary expenses or bring in more money. It’s also wise to set up an emergency fund if you don’t already have one. This fund can help you cover unexpected costs without having to borrow.
Review your debt, including how much you owe and the interest rates. Consider talking to your lender about a debt consolidation loan. This type of loan can help you pay off your debt with one monthly payment.
If you have a mortgage, your lender may offer programs that can help if you’ve lost your job or are facing financial difficulties.
Finally, check for any government programs that can assist you if you’ve lost your job, need retraining, or have health issues. Knowing what help is available can make a big difference during tough times.
Debt help in Alberta
If you’re overwhelmed with consumer debt, Alberta’s Licensed Insolvency Trustees are here to support you. Their expertise can help you navigate debt relief options, providing reassurance during economic downturns.
The federal government of Canada licenses Licensed Insolvency Trustees (LITs). They offer legally binding debt solutions that:
- Stop all collection calls and contact from your creditors.
- Stop all legal actions against you from your creditors.
- Make your payments manageable.
- Give you a plan to eliminate your unsecured debt.
How a Licensed Insolvency Trustee Can Help
A LIT, or Licensed Insolvency Trustee, is a debt professional who understands that sometimes people can’t pay all their debts due to tough circumstances. They offer debt solutions such as:
- Consumer Proposal: A Consumer Proposal can reduce your debts by up to 80%. It lets you make a single monthly payment and gives you up to 5 years to repay it. This option is helpful if you can pay some of your debts, want to keep all your assets, and need to stop creditors from harassing you.
- Bankruptcy: Personal Bankruptcy is for when you can’t repay what you owe. It usually takes either nine or twenty-one months to complete. You may lose some of your assets, but your debts will be cleared, allowing you a fresh financial start.
- Credit Counselling: Credit counselling helps you understand how credit works and gives tips on how to adjust your budget to pay off your debt. This option is only good if you want help managing your finances but can still make your payments.
How We Can Help
You don’t have to deal with your debt alone. If you need help managing debt in Alberta’s fluctuating economy, our team at Allan Marshall and Associates are here for you. If you are struggling with too much debt due a layoff in Alberta or for any other reason, book a free appointment online or call us at 1-888-371-8900. We look forward to helping you get a fresh start!
