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Varcoe: Alberta's economic system not performs starring position, however nonetheless key in 2023 election

Printed Could 02, 2023  •  Final up to date 1 hour in the past  •  4 minute learn

Danielle Smith and Rachel Notley in Calgary initially of the 2023 Alberta provincial election on Could 1. Picture by Azin Ghaffari and Gavin Younger /Postmedia

4 years in the past, when the election writ dropped for the 2019 marketing campaign, Alberta’s economic system was tilting on a unique axis — a world earlier than COVID-19, hovering inflation or the return of US$100-a-barrel oil.

Benchmark U.S. oil costs had been mired beneath US$60 a barrel, whereas the province was throttling again oil manufacturing as a consequence of an absence of pipeline capability.

The Keystone XL pipeline challenge was nonetheless alive and the $7.4-billion Trans Mountain growth challenge was caught up in authorized challenges, whereas the provincial economic system was set to develop by a feeble 0.1 per cent all through 2019.

On Monday, as UCP Chief Danielle Smith and NDP Chief Rachel Notley held separate Calgary occasions and formally kicked off the 2023 election marketing campaign for the Could 29 vote, the provincial economic system is in a vastly totally different place, and each events tried to burnish their credentials whereas lambasting the opposite’s document.

“It was all in regards to the economic system in 2019. That’s not the case now,” Mount Royal College political scientist Duane Bratt stated Monday.

“These financial circumstances are fully totally different, and that impacts the politics.”

Right this moment, the economic system throughout Canada is rebounding from the pandemic, whereas rising rates of interest and the rising value of dwelling are vital shopper issues. Oil costs at the moment are hovering round $75 a barrel.

Knowledge launched Monday by Statistics Canada exhibits the Alberta economic system expanded by 5.1 per cent final yr, as “the oil and fuel extraction subsector had one other sturdy yr in Western Canada, as elevated oil costs spurred increased output.”

The Trans Mountain challenge is greater than 80 per cent full — though its price ticket has soared right into a stratosphere at $30.9 billion — and oil output in Alberta averaged document ranges of manufacturing at 3.7 million barrels per day (bpd) final yr.

Nevertheless, Keystone XL is lengthy since lifeless and buried, costing the Alberta authorities an estimated $1.3 billion after its funding was misplaced when the challenge was nixed by U.S. President Joe Biden.

Miles of unused pipe for the Keystone XL pipeline in 2014.
Miles of unused pipe for the Keystone XL pipeline in 2014. Picture by ANDREW BURTON /GETTY IMAGES FILES

After a sturdy 2022, Alberta’s economic system continues to increase, though it’s anticipated to decelerate this yr to 2.1 per cent development, adopted by 2.8 per cent in 2024, the Convention Board of Canada forecasts.

“In our underlying forecast, we do see Alberta as form of the stronghold for Canada within the subsequent yr,” stated Pedro Antunes, the board’s chief economist.

“That’s, largely, as a result of Alberta continues to be actually recovering from what has been an extended, drawn out, nearly recessionary interval.”

Oil costs have moderated in latest months — after hitting greater than $100 a barrel final spring following Russia’s invasion of Ukraine — and it’s unclear what impact a world financial slowdown could have on power demand by the rest of 2023.

However power sector funding has gone up and drilling exercise was sturdy through the winter months.

One other key financial drive within the province as we speak is the sturdy degree of inhabitants development, fuelled by rising immigration and interprovincial migration over the previous yr, stated Alberta Central chief economist Charles St-Arnaud.

Alberta added greater than 45,000 folks within the ultimate three months of final yr, with a web improve of greater than 29,000 new residents from worldwide migration, and 11,000 folks transferring from different provinces.

“The very fact our inhabitants is rising by about three per cent yr over yr is placing a number of momentum into our development,” he stated.

“That has a spillover on the remainder of the economic system.”

Nevertheless, wage development has lagged the remainder of the nation lately, St-Arnaud famous.

The province’s unemployment charge stood at 5.7 per cent in March, down a half-a-percentage level from a yr earlier, nevertheless it’s nonetheless above the nationwide charge of 5 per cent.

For enterprise operators, ongoing labour shortages stay a key situation in 2023.

With new investments anticipated to move into promising areas equivalent to hydrogen, carbon seize tasks and agricultural know-how, corporations must fill open positions — and there’s a necessity for the province to put money into post-secondary establishments and re-skilling employees, stated Adam Legge, president of the Enterprise Council of Alberta.

“Individuals and expertise and abilities are the No. 1 situation for our members and most corporations I speak to,” he stated.

“We now have shortages now and we could have much more shortages if we’re attempting to make (these) vital investments.”

On the opening day of the 2023 election, financial and pocketbook points did floor on the marketing campaign path. Smith introduced the UCP will create a brand new eight per cent earnings tax bracket — starting subsequent yr — on earnings earned beneath $60,000 yearly, with folks making above that charge saving as much as $760 a yr.

These incomes much less will see a 20 per cent minimize to their provincial taxes.

“We now have finished an unimaginable quantity of labor over the past 4 years to rebuild confidence in our Alberta economic system and it’s working,” Smith advised reporters.

Notley touted her celebration’s beforehand introduced competitiveness, jobs and funding technique, saying it would create greater than 47,000 jobs and entice an estimated $20 billion in funding.

“With an NDP authorities, Albertans will see actual motion to develop and diversify our economic system,” she stated. “Diversification is an absolute necessity.”

The state of the economic system could not play the identical starring position because it did 4 years in the past. But, given the significance of attracting funding and creating jobs for the longer term, it would stay a key marketing campaign situation over the subsequent 4 weeks.

Chris Varcoe is a Calgary Herald columnist.

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