Just yesterday we talked about what a great place Calgary is to live – #1 according to MoneySense, and in fact, how all of Alberta seems to be thriving, with Edmonton showing up as #3 on that same MoneySense list, and St. Albert making an appearance as Canada’s best small town. But what makes Alberta so great? And what’s the secret to all of their success?
Interestingly enough, RBC’s Provincial Outlook, which was released just a few days ahead of MoneySense’s list, spoke of the problems that Alberta will be having this year, and maybe even creeping into next.
Those few dark clouds are due to the fact that investment predictions in the oil and gas sector are expected to plateau for the remainder of this year; and that rising energy production costs in the U.S., along with pipeline bottlenecks are weighing down those investments. All of this was responsible for lower crude prices in 2012.
In the Provincial Outlook report, Craig Wright, senior vice-president and chief economist said, “Weaker than expected oil prices put a multibillion dollar hole in Albert government’s revenues, and led to a 2013 provincial budget that detailed renewed public sector spending restraint. Still, any pullback in capital spending will be short-lived as pipeline issues are addressed and crude oil price relationships normalize.”
Todd Hirsh, senior economist with ATB Financial, says that he agrees that Alberta’s economic growth will probably be slower this year than we’ve seen in the years past.
“So I think we will see probably a slower year for growth than what we saw in 2011 or 2012,” Hirsh said. “A lot of that of course prompted by those softer energy prices and maybe a little bit of pullback by the provincial government. But I think we’re still going to see kind of a nice moderate healthy level of growth of around 2.5 to three per cent.”
So again, what makes Alberta such a great place to live?
Well, they may be moderating this year from the huge economic boom they’ve experienced the last two years – but let’s not forget that those who have lived in the province for several years are probably still feeling the benefits of that boom.
And while economists may be predicting a slower to moderate economic growth this year, things look good for the province in the next coming years. RBC is predicting a 3.5 per cent growth for this year, slightly better than Hirsch’s, and they expect Alberta to be leading the country in growth by the year 2014, seeing a huge boom of 4.2 per cent economic growth.
And even though Craig Wright said that there would be investor slowdown in the near future, he also agrees that you just can’t deny the boost this province will be enjoying once again very soon.
“Even though the province recently announced a $2 billion budget deficit, Alberta is unquestionably in the midst of an impressive economic boom – particularly with capital investment fuelling manufacturing and wholesalers’ sales. Attractive employment opportunities are also bringing new migrants to the province, boosting population growth and in turn, consumer spending,” Wright says.
He continues, “As the economy continues to thrive across the majority of key industries, Alberta will remain at the top-end of Canada’s economic growth rankings this year.”
