And

That was my summary slide in my presentation at the Calgary Economic Development 2025 Economic Outlook conference, held yesterday at the new (and spectacular) BMO Centre in Calgary with a packed room of over 1,500.

My ‘and’ argument is that the diversification door has widened in Alberta. Many people have arrived in Alberta over the last three years, disproportionately young households. With so many people coming, the labour market (despite pockets of shortages like construction) is not nearly as tight as in the past. Growth has spread to emerging sectors like aviation and tech.

So, the question I posed is how do we see continued diversification and retain a productivity edge that is in large part driven by a higher concentration of workers in high-wage/high-productivity industries linked to the oil and gas sector (see our productivity paper for more)? How does Alberta address global energy and food security and be a leader in emissions reduction? I argued that getting the “and” questions right is key to Alberta’s future economic success.

As for the outlook, Alberta is relatively well positioned. In our October forecast, we expect stronger economic growth in Alberta this year and next than in the rest of Canada, with rising oil production linked to the TMX expansion, much stronger home construction linked to rapid population growth, and continued expansion in certain growth sectors (like petrochemicals, hydrogen, food manufacturing and technology).

It’s been a tough decade for the Alberta economy, but we see Alberta returning to near the top of the growth leaderboard this year and next.

To be sure, there are plenty of risks. Fears have shifted. Businesses seem more worried about geopolitical risks and less concerned about labour shortages and inflation than in the past. Former U.S. Ambassador to Canada Bruce Heyman aptly spoke to U.S. election risks at yesterday’s event.

We try to account for these and other external risks by running high and low scenarios. But regardless of what happens abroad (and who wins the U.S. election), it’s important to look at what’s happening within Canada’s borders. When Canada moves sustainably back to 2% inflation and the Bank of Canada is at its neutral interest rate (we figure that will happen by the midpoint of next year), there will still be challenges. Chief among them are Canada’s languishing labour productivity and stretched housing affordability. I argued it will be a ‘softish’ landing, but engine repairs will be needed in Canada. Monetary policy is a blunt instrument and can only do so much.

Post Scripts:

There was lots of great discussion after yesterday’s event. And for those folks wondering, Matthew Wilder’s 1983 hit “Break my Stride” is more familiar than you may realize: “Ain't nothin' gonna break my stride/Nobody gonna slow me down/Oh no, I got to keep on moving.” (Caught you singing!)

Thank you to everyone at the event who provided input at the Twenty-Four Seven booth. We received lots of valuable feedback on the content you’re interested in.

Congratulations to Calgary Economic Development on another great event.

Answer to the previous trivia question: The video communications company Zoom was founded in 2011.

Today’s trivia question: How many times will the Edmonton Oilers and Calgary Flames play one another during the 2024-25 regular NHL season?