Doug Schweitzer says Alberta is on track for more than just recovery.
In a first-quarter update on Friday, the economy, jobs and innovation minister pointed to different indicators, including record growth in venture capital investment, that indicate strong economic growth for the province.
He said the economy is expected to fully recover to 2014 levels this year, expanding by 5.4 per cent, among the best in Canada.
This is despite skyrocketing inflation and rising interest rates that are cramping the buying power of Albertans.
“Right now, in Alberta, we are forecasted to lead the country in growth this year and next year,” he said at a news conference. “Our focus right now has been getting people back to work and we’re seeing … with the trends we’re anticipating the unemployment rate will continue to drop in Alberta.”
Inflation in March hit 6.7 per cent nationally and 6.5 per cent in Alberta, the highest year-over-year mark since 1991. This has been driven by many factors, including energy prices, supply chain issues, workforce shortages, weather events, red hot real estate and other lingering pandemic impacts. This has caused the cost of living index to increase by three percentage points or more in most categories.
To counter this, the Bank of Canada has increased interest rates to one per cent from 0.25 per cent, including 50 base points on April 13. Many economists expect the rate to continue to rise to at least two per cent by the end of the year and likely sooner.
Alberta’s workforce numbers are improving, which, at 6.5 per cent unemployment, is the province’s lowest mark since December 2018. Through March, Alberta has added 22,400 jobs while 12,000 businesses have incorporated in that time, increasing weekly earnings by two percentage points year-over-year in January 2022.
Growth has been across all sectors, according to the minister, including logistics, aerospace, renewable energy, finance and technology, further diversifying the economy.
This is building off of the momentum from last year, which saw a record $561 million in venture capital investment in Alberta, up exponentially over previous years. Alberta, however, was outpaced by other provinces like Ontario and B.C.
In a quarterly snapshot by Calgary Economic Development released earlier this week, the CED said Alberta still only made up about four per cent of total national venture capital investment.
Schweitzer said that will change this year. He said the province has set a new quarterly investment record with $200 million worth of investment and there is more on the way.
“It’s like a hockey stick,” he told Postmedia. “We signed a record number of Series A financing — mid-level venture capital financing — but they’re a little bit smaller than your later stage fundings that are going to happen. Because of the volume of companies that are in that growth stage, we are expecting to see larger and larger financing happen in Alberta.”
He said cities like Toronto and Vancouver are three to five years ahead of where Alberta currently is.
Also key to recovery and growth are commodity prices. Energy, especially, has been riding high for months and has only been strengthened due to the Russian invasion of Ukraine. The price of oil has also aided the provincial government in putting forward a balanced budget while using conservative forecasts for pricing.
Schweitzer pointed to other sectors experiencing growth, like manufacturing, with sales of $16.1 billion in the first two months of 2022 (up 30.2 per cent year-over-year) while wholesale trade grew by 23.4 per cent with growth in every product category.
According to the report, Alberta also led the country in growth in merchandise exports with more than $28.6 billion in goods through February, up 54.4 per cent. Energy products were at the base of this, up 72.8 per cent.
Consecutive quarters of positive migration to Alberta are helping to fuel the economy as well, with building permits up 7.7 per cent year-over-year.
Twitter: @JoshAldrich03
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