If your company, regardless of the area of business, can't weather a 2% increase in costs, then you have a shitty business plan.
If a company you are proposing to start can't weather a 2% increase in costs, then you have a shitty business plan.
Those companies that find themselves in that condition are not businesses, they are gambling and are being subsidized by taxes on the general public to gamble.
This is the opposite of capitalism. It is the opposite of survival of the fittest.
If your family budget can't survive a 2% increase in costs, then you are an idiot.
As for uncertainty: its funny that uncertainty at the high times is called progress as companies take record profits on volatility, but in low times its the devil.
Labour is cheap right now and goods should be relatively cheaper as transportation costs decrease due to lower fuel costs. It is a great time for companies and governments to diversify and invest. Buy low, sell high.
Pull yourself up by your bootstraps chicken little. It is a time of opportunity.
You completely missed the point. Its not that 2% is life or death for a company, its about making sound business decisions. If you invest, you would know that 2% can be a huge amount of money over a number of years. That's why I buy ETF's and index funds over mutual funds, to save 2+% on the bloated management fees that we pay for mutual funds in Canada. 2% can make a big difference, especially over a long period of time.
Oil companies also have very small profit margins and take on huge risks compared to other industries. In 2010, large oil companies had average profit margins of 6.5%, a year with good prices ($70-$90/bbl). That same year pharmaceuticals averaged 16% profits. Oil companies make make 7 cents for every gallon sold, while the government makes 48 cents.
If that gives you heartburn, I don't suggest looking at how much apple profits off of each on of their devices you buy, you might just have a heart attack.
The sky isn't falling in Alberta, but in a time of instability such as this, oil companies need to do what makes the most business sense. Companies aren't successful by making poor business decisions, as you all know. Right now its all speculation on what's going to happen with the NDP in power, and unfortunately speculation can be worse than reality. I for one am going to see what actually happens before I say anything further.
"A fear of weapons is a sign of retarded sexual and emotional maturity."