The latest data from Statistics Canada was worse than expected: Alberta’s economy shrank 3.8 per cent in 2016. For two straight years now, the economy contracted, earnings fell, profits evaporated, the deficit ballooned and unemployment rose to levels not seen in decades. But despite the news, Alberta’s economy remains the strongest in Canada.
We produce, earn and work more than any other province. One cannot ignore the deep pockets of pain felt by tens of thousands of Albertans, but the cause is not broad economic weakness. Understanding this is critical to make smart policy choices, to target support where it’s needed and to filter through political rhetoric on all sides.
Of course, the oil shock was massive. In 2014, when oil could fetch over $100 (U.S.) a barrel, Alberta’s economy produced $373-billion worth of final goods and services. By 2016, it produced $310-billion – down 17 per cent, according to the Conference Board of Canada. Toss in the forgone growth had oil prices remained high, and there’s roughly $100-billion less in 2016 to go around. Let that sink in.
That’s the bad news. Here’s the good: At $73,000 a person, the economy is still stronger than the national average ($54,700) or the next strongest economy of Saskatchewan ($66,700). So at its worst, Alberta’s economy was 10 per cent larger per person than the second-place province, and 30 per cent larger than the Canadian average.
Article from The Globe and Mail by Trevor Tombe.
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