As Albertans march to the voting booths this spring, the brimming provincial economy is creating a Catch-22 dilemma for the incumbent United Conservative Party and its messaging.Sean Kilpatrick/The Canadian Press
Todd Hirsch was the Calgary-based chief economist of ATB Financial and is the author of The Boiling Frog Dilemma: Saving Canada from Economic Decline. He is producing an economic report for the Alberta NDP on an unpaid basis.
Alberta Premier Danielle Smith was elected to lead the UCP last fall by blaming Ottawa for everything. Ottawa has strangled our energy sector! Ottawa has destroyed our economy! Ottawa has robbed Alberta’s wealth and has given it all to Quebec! (These aren’t direct quotes, but they certainly come close.)
Yet now making such claims is embarrassing when, in fact, Alberta’s economy is roaring ahead and leading the country in growth.
As Albertans march to the voting booths this spring, the brimming provincial economy is creating a Catch-22 dilemma for the incumbent United Conservative Party and its messaging.
The Conference Board of Canada is forecasting Alberta to lead all Canadian provinces in GDP growth in 2023 and 2024. According to its most recent projection, released last fall, Alberta will expand by 3.5 per cent this year and 2.4 per cent in 2024.
More up-to-date forecasts by the major banks suggest somewhat lower growth rates than the Conference Board, owing mostly to the hikes to borrowing costs since last autumn. Still, almost all of the major forecasting teams are suggesting Alberta will lead the country in economic expansion.
Higher oil prices have generated a massive windfall surplus for the provincial government. And a tech boom is helping to fill up the enormous gaps in commercial real estate. Since the downturn in energy prices going back to 2015, vacancy in Calgary’s shiny office towers spiked to 30 per cent. This is now falling.
One of the most reliable indicators of economic good times – interprovincial migration – has kicked into high gear. In the third quarter of last year, nearly 33,000 people from other provinces moved to Alberta, while fewer than 14,000 left, leaving a net increase of more than 19,000. In perspective, Alberta’s net interprovincial population gain has been higher on only one occasion (in the third quarter of 1980). Most of the current net increase is because of people leaving Ontario (plus-8,645) and British Columbia (plus-5,960).
For all of the economic good news and an election less than four months away, you’d think the governing UCPs would be celebrating. But this time around, the economy is creating an interesting plot twist.
The UCP would love to both take credit for the economic renaissance, and at the same time blame Prime Minister Justin Trudeau for the economic catastrophe. But the two assertions cannot both logically hold true.
For sure, there’s almost no one in Alberta who would suggest the federal government hasn’t repeatedly fumbled the ball. Even Alberta’s opposition NDP is saying that Ottawa’s “Just Transition” plan to evolve jobs in the energy patch needs to be scrapped and rethought with input from Alberta. And the mention of Bill C-69, which overhauled Canada’s environmental assessment laws, will send many Albertans into a fit.
But with the fastest growing economy, highest average weekly wages and strongest inflow of migrants, most Albertans actually aren’t that angry about the economy. Most surveys show voters in the province are far more concerned with the state of the health care system than they are furious about the economy.
That wasn’t the case during the last provincial election. In 2019, Albertans were suffering through a fourth year of recession. The slogan “Jobs. Economy. Pipelines” swept Jason Kenney’s newly minted UCP into power that year.
But in 2023, the slogan “Trudeau has destroyed our economy!” simply won’t do. Albertans are smarter than this. The economy will play a role, as it always does. But the UCP needs to be extremely careful playing the economy card.