Filling up at the pump for less these days has drivers everywhere cheering. The extra cash in our pockets feels good. But ever wonder what the low price of oil may have in store for you here in B.C. other than cheaper gas?
Here’s a rundown:
- More costly U.S. goods: The drop in oil price has caused the Canadian dollar exchange rate to drop. You can expect to pay more for produce from California, as well as clothing, appliances, and furniture imported from other areas of the United States. On top of that, cross-border shopping and vacations just got more expensive.
- More competition for jobs: A lot of highly skilled trade people in the oil industry may lose their jobs and return to B.C. looking for work.
- Lower wages for oil industry workers: Companies working in or servicing the oil industry will need to lower their costs to make up for lost revenue. Workers, including those from B.C., may be forced to accept lower wages in order to keep their jobs.
- Government service cuts and wage freezes: With oil revenues and gas royalties dropping, the government will likely freeze wages. We may also see service cuts in sectors such as health care, education, and public works.
- More tourism in Canada: The low Canadian dollar could cause an influx of tourists. The result? More competition for hotels and vacation resorts here at home.
- New job opportunities: Some companies will gain a competitive advantage from the low dollar. Those that export products may now be looking to hire more workers.
- Possibly cheaper air travel and products made from oil: Ideally, airlines will pass along lower fuel costs to customers, just as manufacturers of plastics and synthetic clothing could pass along lower manufacturing costs. But it depends on the industry and how competitive it is. Companies may choose to keep their profits.
No one can predict exactly when the price of oil will rebound. Or by how much. Enjoy the cheaper gas while it lasts, but keep in mind these related effects when deciding what to do with your savings at the pump.
What’s your experience with low oil prices? Leave a comment.