Resilience through strengths a way out of Alberta’s economic slump: experts

Article content

More than six years into an economic slump, Albertans have plenty of reason to believe the tide is turning, a panel of business leaders said Wednesday.

While challenges magnified by the pandemic remain, the province’s underlying human strengths, rising oil prices and the gathering momentum of diversification bode well, said a trio of business experts on Postmedia’s Advantage Alberta panel.

“We’ve gone through such a harsh year but we’ll see a big rebound in 2021,” said Jack Mintz, the chair of Alberta’s Economic Recovery Council.

“That’s because there are various trends already happening.”

Among those are an oil price in the $50 to $60 per barrel range — rebounding to pre-pandemic levels — a booming real estate market, the return of investors, and booming lumber and agricultural sectors, he said.

“We’re having one of the best years for wheat prices and the cattle market is back . . . and we’re also seeing a boom in high-tech,” said Mintz.

Article content

He noted BMO has forecast a six per cent growth in Alberta’s GDP for this year, the highest in Canada, and that commodity prices have increased by 17 per cent since the pandemic began — another promising figure for the province.

While critics have panned the record of the UCP government’s reduction in corporate taxes in attracting investment and creating jobs, panel members insisted it’s ultimately a major weapon in Alberta’s economic recovery.

That should prove a particularly potent investment attractant with U.S. President Joe Biden administration’s plan to hike the corporate tax rate to pay for its ambitious $2-trillion infrastructure plan, said PCL Construction CEO Dave Filipchuk.

“We should have the lowest corporate tax in North America,” he said.

That recovery hill seemed more like a mountain after a report released Wednesday by TD Economics predicted dwindling demand for its product will likely see employment in the oil and gas industry fall by up to 75 per cent by 2050.

That would reduce the sector’s workforce by as much as 450,000 positions.

Also on Wednesday, the CEOs of the country’s largest pipeline companies — Enbridge Inc. and TC Energy Corp. — said they’d be avoiding large oil pipeline projects in the face of opposition to them and climate change realities.

But former Saskatchewan premier Brad Wall insisted the longer-term outlook for the sector is brighter than many predict, given the ongoing demand for oil and gas and the way that sector can pivot to the high-tech, mineral extraction and carbon capture and storage fields.

Article content

And Filipchuk said Alberta’s quality of living and a “helper mentality” put the province in a good position.

“It’s a great place to raise a family and there’s an affordability compared to other major Canadian cities,” said Filipchuk.

“We have a very highly collaborative business sector . . . Albertans want other Albertans to succeed and are always willing to help them.”

Crystal Young, CEO of energy company McKay Metis Group, said Alberta still offers a lot of promise.

“It’s been hard times, absolutely, but we’ve innovated — there’s no other jurisdiction better positioned than Alberta is,” she said.

“We’ve had to look at niche markets and diversify . . . the McKay Metis Group is positioned to grow.”

First Nations and corporations, she said, are working together in greater harmony in an environment that’s more apolitical than many places.

“It’s not political — it’s business and it works,” said Young.

But she said key to that growth for the province as a whole is maintaining educational excellence, said Young.

“We need to stay the best-educated population in the country,” she said.

Wall said adversity has had a silver lining for Alberta.

“Consolidation in the industry has left us with stronger companies and we’re seeing investment come back,” said Wall, who led Saskatchewan from 2007 to 2018.

And the province is in a good spot to morph its oil and gas efforts to other extraction pursuits targeting helium, hydrogen, lithium and other rare earth commodities, he said.

“We’ll see these industries develop on the same footprint as oil and gas,” said Wall.

“My advice is ‘keep your head up — there’s plenty of reason to be hopeful.’ ”

Learn why investors and businesses are bullish on Alberta’s economic future at Postmedia’s free virtual events; the second Advantage Alberta panel occurs April 14. Visit AdvAlberta.postmedia.com to register.