Alberta’s economy seems to be rebounding, what it means for you
Posted May 5, 2022 6:18 pm.
Last Updated May 5, 2022 6:49 pm.
Alberta is seeing some positive economic movement as StatsCanada puts out an encouraging report, but is it enough for the province to lead the pack in terms of economic growth this year?
The latest from StatsCan shows Alberta has hit a record high export value.
“All indications are that the Alberta economy is taking off,” Premier Jason Kenney told CityNews in an exclusive interview.
“It means great things, Alberta is an export-driven economy, we are diversifying, we are in an economic boom. There’s no doubt that this year we’re leading Canada in economic growth.”
The province’s domestic exports hit $17.5 billion this March. That’s a $3.9B increase from February and a $6.3B increase from March 2021.
“It’s good news, whenever you can get back to levels that are pre-pandemic, that’s always a good sign for the economy,” explained economist Moshe Lander.
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Energy export values received a major boost as oil prices rose in the wake of the conflict between Ukraine and Russia.
“This particular sector is the backbone of government revenue, so when it’s flying high whether that’s in dollar terms or in barrel terms, that’s good news for the government which means it’s good news for the taxpayers,” Lander added.
Non-energy exports also hit a record high level in March.
“We’re seeing momentum in pretty much every sector of the economy,” Kenney added.
#Alberta see's positive economic movement as StatsCan puts out an encouraging report. Will AB lead economic growth this year? Premier Jason Kenney comments and a pair of economists explain what a rebounding economy means for you. #yyc #yeg #abpoli — FULL: https://t.co/PlePhauqKu pic.twitter.com/0sN0YMwjxN
— Saif Kaisar (@StaySaif) May 6, 2022
“Alberta may well lead the country in economic growth in 2022 largely because of the strong energy price situation,” said Robert Roach, Deputy Chief Economist and Managing Director at ATB Financial.
“In 2021, we did bounce back from a very deep drop in 2020, and that recovery has been continuing in 2022. Now, we’re getting a break because we’re so dependent on oil and gas — especially oil prices, they’re really through the roof, they’ve been averaging over a hundred dollars in March — that really helped drive up the export prices and value.”
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But what do all of these numbers and graphs actually mean?
“It means jobs for the oil and gas sector, it means revenues for the government, it means profits which means infrastructure spending, and a little bit of help in reducing debt, it means dividend payments to shareholders,” said Lander.
“So, it’s the type of thing that gets spread through the economy, that’s how reliant the Alberta economy is on this particular sector that there’s almost nobody that who’s going to be unaffected,” Lander answered.
Roach says everyone will be affected by the growth whether directly or indirectly.
“Average Albertans will get some benefit from the overall economic growth because it does ripple out into the economy in terms of a little bit more opportunity, maybe on the labour market side, maybe in terms of wages to at least try to keep up with inflation.”
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Despite saying this news is a positive sign for the province, Lander issues a warning and says a cushion needs to be made to try and soften the eventual fallback.
“What goes up must come down. So, what I would say as a cautionary note is a cautionary note that much greater people than me said for decades in this province. The oil and gas sector is cyclical,” he warned.
“At some point, this is going to turn around, and the issue is when things are doing well [is] when you need to be thinking about that next downturn because when that downturn comes, there’s not going to be the type of thing that can save jobs and save the sector.
That’s why Alberta might lead the pack in terms of booms, but it also leads the pack in busts as well.”
