Alberta’s economy - reason for hope
Alberta has emerged from the recession. All of the major economic indicators are pointing in the right direction:
- Alberta leads all provinces in GDP growth
- Alberta added more than 60,000 jobs last year
- Both the unemployment rate and the number of people on EI are down dramatically
- Alberta continues to have the highest employment participation rate in Canada
- Wages in Alberta are the highest in the country and growing at the fastest rate
- Alberta leads the country in per capita business investment
- Corporate earnings are up (+6.9%) and so are the numbers for wholesale trade (+16.3%), manufacturing (+25.5%) and retail sales
- Exports are up a whopping 46.5%
Clearly, the narratives being spun by certain politicians and pundits about Alberta being an “economic basket case” are simply wrong.
Reason for worry
As a result of these trends, more Albertans are becoming cautiously optimistic about the future. But, at the same time, they’re still worried.
That worry is justified – mostly because what we’ve just lived through was not just another boom-bust cycle. Rather, the global energy economy is undergoing a profound transformation.
This transformation has three dimensions, all with big implications for working Albertans:
- As a result of the fracking boom south of the border, global oil markets have been flooded, oil prices have been suppressed and the United States has gone from our best customer to our biggest competitor.
- New technologies and automation mean that the oil and gas sector will not be the same kind of engine for job creation that it has been over the past two decades. The introduction of driverless trucks in oil sands mining by Suncor and unmanned SAGD facilities by Cenovus are just the beginning.
- To top things off, the world has started the long and bumpy process of moving away from fossil fuels – a process that will eventually shake the very foundations of the Alberta economy.
Albertans should recognize and celebrate our returning prosperity. But if we want that prosperity to continue, we need to acknowledge the unfolding energy transformation and start preparing for it.
The Next Alberta campaign is all about making sure that our politicians and policy makers acknowledge the energy transformation – and that we make it a central issue in the next election campaign
As we approach the next election and the question of how best to deal with the global energy transformation, we have to choose between two different visions.
The first is a vision that says the answers can be found in tax cuts for the wealthy and well-connected; cuts to spending on public services; and the elimination or weakening of rules designed to protect workers, consumers and the environment.
This is the conservative vision that has been implemented by many politicians in Canada and around the world over the past 40 years – from Margaret Thatcher in the 80s to Donald Trump today.
Instead of the prosperity promised by these leaders, their policies have resulted in crumbling public infrastructure, weakened public services, declining quality of education, stagnant wages, sluggish economic growth, rising inequality, and the erosion of job security.
They have also resulted in things like contaminated water systems, increased consumer scams, abuses of workers and, perhaps most spectacularly, the global financial collapse of 2008 – a case in which deregulation clearly led to a catastrophe for the public interest.
For obvious reasons, we characterize this as the low-road approach to public policy.
And it’s the last thing we need as we face the uncertainties that come with the global energy transformation.
So, what’s the alternative?
The alternative is what we’re describing as the high-road approach.
It’s based on the notion that, in the face of big challenges like the energy transformation, people need to pull together and support each other, not say “every man for himself.”
It’s also an approach that says the best way for a government to run an economy is to invest in people – especially the skills and infrastructure those people need to succeed.
Here in Alberta, it also means that we need to diversify our economy; both within the oil and gas sector and beyond it.
When we have a workforce that is healthy, happy and well-trained; and an economy with modern, state-of-the-art infrastructure, then workers will build, consumers will spend and businesses will invest.
The failures of the low-road approach are increasingly being recognized by policy makers around the world. And the high-road approach is being supported by think tanks and establishment organization like the World Bank, the International Monetary Fund and the OECD (1, 2).
In the face of the global energy transformation, it’s clear Alberta needs to take the high road.
Next Alberta has a plan for how we can meet the challenge of the energy transition head on and come out the other side with a stronger, diversified economy.
We will be releasing our plan in the coming weeks, and we want to hear from working Albertans about their experiences and ideas for how we build the next Albertan economy.