This week brought another powerful reminder of why Canada would be best served by Alberta reinventing her economy away from reliance on oil.

More later on how that can be done.

The more than 25 per cent plunge in the world oil price this week is a body blow to the entire Canadian economy, extending far beyond the Alberta oilpatch.

It helped trigger this week’s stunning 20-per-cent-plus collapse in the broader Canadian stock market, which has lost more than $800 billion in shareholder value since the S&P/TSX Composite’s record peak on Feb. 20.

Economists and business leaders now warn of a looming Canadian recession.

They cite, in equal measure, the potential damaging impact of coronavirus and the more certain harm from the oil-price collapse, for a country that is one of the world biggest oil exporters.

Alberta’s prosperity radiates across the country. So do its difficulties.

For instance, the Bank of Canada was obliged to cut its key lending rate to support continued oilpatch investment after the oil-price collapse of 2014-2015.

That effort failed. It only emboldened prospective home buyers equipped with the Bank’s flood of cheap money to bid up Vancouver and Toronto housing prices to unaffordable levels.

This week, Canadian business leaders began calling on the feds to balloon the deficit with emergency subsidies for industries most affected by the coronavirus threat and the latest oil-price collapse. Prominent among those needing support are Alberta oil firms.

Albertans have long known that their oilpatch, which accounts for roughly 30 per cent of the provincial economy, is held hostage to the Saudi sheiks and Russian oligarchs who declare price wars — like the one that began this week, cratering the world oil price and like the one the Saudis launched against U.S. frackers in the 2015 outset of Alberta’s long current malaise of depressed oil prices.

Alberta, in turn, holds Canada hostage to its periodic oil crises, which threaten once again to distort fiscal and monetary policy in the entire country.

Wildrose Country is far more than oil and gas, but you wouldn’t know it from the periodic wreckage that a chronically volatile world oil market does to Alberta and Canada.

Alberta is one of the world’s great centres of grains and livestock production, and a major forest-products jurisdiction with a substantial dairy industry.

And Calgary has become the transportation hub of Western Canada, with world-class expertise in logistics that is primed for export.

And oil’s contribution?

Last year, Alberta collected less money in oil royalties ($4.3 billion) than Queen’s Park pocketed from booze and gambling ($4.9 billion). Alberta has gone from collecting about $10 billion in annual royalties to posting $10-billion deficits in little more than half a decade.

It gets worse than the impact on oil demand from a finite coronavirus pandemic.

The Calgary oil lobby blithely insists that global demand for oil will keep growing for decades.

But most international forecasters see world oil demand peaking in just 15 years, followed by steady decline.

There is no turning back from the commitment of world governments to “decarbonize” their economies. Electric vehicles (EVs) threaten one of oil’s two remaining major markets, road transportation. And the war on plastics threatens the other, petrochemicals.

Big Oil is in big trouble worldwide.

No longer able to produce consistent profits, oil has lost the faith of investors.

Over the past five years, oil majors Exxon Mobil Corp., Chevron Corp., ConocoPhillips, Royal Dutch Shell PLC, Total S.A. and BP PLC have each lost an average of 34 per cent of their shareholder value.

Last year, with profits of $55.3 billion (U.S.), Apple Inc.’s earnings equalled that of those six Big Oil firms combined.

Yes, the largest tech firms are very profitable.

But in 2019, Berkshire Hathaway Inc., a hodgepodge of old-economy railways, pipelines, housing contractors and Dairy Queen stands, earned $81.4 billion (U.S.) in profits — or 33 per cent more than those Big Oil firms combined.

Oil companies themselves are diversifying away from oil. Calgary-based Suncor Energy Inc. is bidding to become a world leader in wind-power production.

Shell, Total and BP are among the oil giants that have made billion-dollar investments in renewable energy.

Big Oil is hedging its bets, both with alternative energy and, in Suncor’s case, a network of Petro-Canada filling stations poised to be retrofitted as electric-vehicle recharging stations.

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That’s what an Alberta that has talked diversification for decades will eventually do, hedge its bets with heavy investments in its non-oil economy.

But when?

Alberta is ideally suited to lead the world in renewable energy technology — a diversification away from oil within the energy sector.

Alberta oil companies are investing in electric storage technologies. And the province is a Canadian leader in solar and wind-power production.

Beyond energy, Alberta has enjoyed continued growth in its formidable agriculture and tourism sectors. And it can boast an emerging prowess in life sciences and high tech.

In their own makeovers, Denver and Pittsburgh rebuilt their now prosperous economies around the commercialization of scientific and technological breakthroughs.

Those civic reinventions took more than two decades, most of it spent shaking off local denialism that Pittsburgh, for instance, was no longer a steeltown.

Alberta’s commitment to a high-tech future is a sometime thing, in contrast to the resolve seen in Vancouver, Montreal and Toronto.

Alberta Innovates and InnoTech Alberta, government agencies with a mission to create a Wildrose Silicon Valley, had their budgets slashed when Alberta deficits soared.

Those agencies were tainted by scandal (unaccountable expenditures), but the proper response was to fix and not gut them.

Such initiatives are pointless unless they have unshakeable support in good times and bad.

As noted, a New Alberta Economy has a rich endowment of non-petroleum resources to build on.

What’s missing is a master plan that pins future prosperity on scores of initiatives, rather than an imagined silver bullet like a new pipeline.

Economic reinvention means increased investment in incubators of entrepreneurial start-ups. These include the University of Calgary’s Creative Destruction Lab and its new Life Sciences Innovation Hub.

Alberta’s growing tech activity means Calgary alone faces an estimated shortage of 1,200 computer programmers, database analysts and software engineers by 2023.

Tackling that challenge requires a coordinated effort between the province and the renowned Southern Alberta Institute of Technology (SAIT) and other Alberta tech-training centres.

Alberta is beginning to realize its potential as a hub of agrifood technology, at a time when the global diet is undergoing a renaissance.

But most of those initiatives are in their nascent stage. Each needs a rocket booster placed under them.

It’s anyone’s guess if or how soon that will happen. But it’s a certainty that Alberta, and Canada, won’t be liberated from nasty external forces until it does.

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