Alberta has had a rough six years – to the point where we’re tired of hearing the bad news.
Since oil prices collapsed in 2014, there has been a steady stream of downers about massive job losses, head offices hollowing out, and a lot of talent that we can’t afford to lose packing up and heading for the exits.
And yet, in spite of a list of challenges as long as your arm, there continues to be a sense that there might be light at the end of the tunnel, and that somehow we will innovate our way out of all this mess.
Too much doom and gloom is not a healthy thing. We need to stop focusing on what has gone wrong and think about not only what’s going right, but also what we need to do to keep things on the upswing.
And we need to keep a sense of perspective about just how bad our troubles are in this province. When you look at some of the country’s hardest-hit provinces, things are not quite as bad here as they sometimes feel. Consider the fate of Newfoundland and Labrador, for example, where the collapse of the cod fisheries virtually obliterated the historic core of the economy.
All things considered, the problems in Alberta are not to be taken lightly. But they’re also hardly apocalyptic.
To drive the point home, the ATB Economics team published some interesting statistics last week. It noted that, in spite of all our setbacks, Alberta still has the highest gross domestic product per capita in the country. The nominal GDP per Albertan in 2018 was $79,000, about $20,000 above the national average.
ATB also noted that Alberta’s per capita GDP would put us 13th on the list of the largest economies in the world in 2018 and ahead of places such as Australia, Sweden and Germany. Canada as a whole is 20th on the list.
And we’re still shopping. Alberta has the highest retail sales per capita, the highest average wages, the highest average household income, the highest capital spending per capita and, despite a large number of people looking for work, the highest employment rate among the provinces.
That last statistic raises your eyebrows. The employment rate refers to the number of employed persons expressed as a percentage of the population 15 years of age and over.
We also have a relatively young and highly educated population.
And we have had unexpected breaks coming our way. The Federal Court of Appeal’s decision to reject opposition to the Trans Mountain Pipeline expansion comes as a huge relief, even though we subsequently learned that the costs of building the pipeline have soared.
A lot of signs suggest we’re poised for a turnaround. In November, the Conference Board of Canada predicted Alberta’s economy will rebound by 2.4 per cent this year and 3.1 per cent in 2021. The organization credited the bump to the Trans Mountain expansion officially seeing construction underway, money coming in to build LNG Canada and a forecast turnaround in energy investment.
The conference board’s report estimates the Trans Mountain project will “change the landscape of the energy sector over the next five years, temporarily creating a significant net-positive take-away capacity for oil producers and incentivizing expansions and new projects.”
Now, if all this sounds a bit too rosy to you, you’re not alone. Edmonton economist John Rose cautions that Trans Mountain itself is a temporary fix in that Alberta’s capacity to produce oil will rapidly outstrip the capacity of that pipeline. For sustained growth, he says, Alberta needs Keystone XL and the Line 3 expansion to also move forward.
I would argue we also need to continue innovating. The rebound in the energy sector is welcome but we need to realize it only gives us the breathing room we need to build a new economy that will take the province ahead as the sun gradually sets on our legacy economy.
It means we must never get comfortable again with short-term prosperity. The past few years have been tough and they’ve made us hungry – to innovate, to change and to put the old ways of doing things behind us.
Let’s stay that way.
Doug Firby is Troy Media’s publisher.