An Edmonton-based company has moved to offer layoff insurance directed at the growing number of wage workers fearful their jobs will be next on the chopping block in a troubled Alberta economy.
"We would prefer it if there was no need for this type of coverage, but the slowing Alberta economy, the low price of oil, and the rising unemployment rate have all led to high demand for this product," Gord McCallum, head of First Foundation, told the CBC..
The insurance offered at $50 a pop will covers six months of mortgage payments and is not taxable.
The coverage is nothing new but usually tied to mortgage insurance or life policies.
McCallum’s is a standalone product. It also speaks to the state of his province’s economy.
Alberta's Crown-owned bank is predicting the first six months of this year will be the roughest yet in the current economic downturn.
ATB Financial is forecasting the petroleum industry will continue to shed jobs due to the unrelenting drop in the price of oil, with Fort McMurray and Calgary taking the hardest hit.
“We do see the first half of 2016 probably being the toughest months of this recession for Albertans,'' ATB chief economist Todd Hirsch said Thursday.
“We will see more contractions in the economy, we will see more layoffs and that will add to a heightened unemployment rate.''
Hirsch said the provincial unemployment rate could climb to eight per cent from seven per cent by the middle of the year.
Alberta's unemployment rate in January 2015 was 4.7%.
The ATB report forecasts weaker consumer demand for housing and retail products. It also says it is possible that more people will leave Alberta
than move to the province.
Hirsch said the economy
is expected to start turning around by the end of the year.
``By the end of 2016 we do see some of these heavy clouds of pessimism start to lift off the province, but the first half of the year will be tough for a lot of people.''