Alberta's Economy in 2021: Tools to help understand what comes next
Free on-demand webinar
By ATB Financial 14 January 2021
Please note this webinar was recorded on January 14, 2021.
It's fair to say that there's never been a year like 2020. But what lies ahead in 2021? With a great deal of uncertainty still weighing down the economy, it's difficult to predict how and when it will recover. What tools can help us understand the new environment that will emerge? And what will the new economy look like? ATB's Vice President and Chief Economist Todd Hirsch shares expert insight into Alberta's economy during this 60 minute webinar including:
- 3 tools to help understand the economy in 2021, including the butterfly effect, the alphabet and a four-layer sponge cake
- Why the sectors of our economy must be balanced together instead of ranked by importance
- The impact of the U.S. election on Alberta’s energy sector
- What kind of post-pandemic recovery we can expect
Top five takeways
1. Termination of Keystone XL. In the U.S., with the Democrats in control of the presidency, the Senate and the House, President Biden has canceled the Keystone XL pipeline project instead of using it as a bargaining chip in a Republican-controlled senate. It is a frustrating setback for Alberta’s energy industry, however new environmental regulations under the new president does send optimistic signals to that sector.
2. A Biden Presidency will be good for Alberta’s energy industry. Under the Trump administration, the U.S. loosened a lot of environmental regulations and spurred on shale oil and fracking south of the border. This put Alberta’s energy industry at an economic disadvantage and saw the market flooded with U.S. oil. Under President Biden, expect tough new rules around shale oil and fracking. That will lower production in the U.S. and improve Canada’s competitive position.
3. The pandemic economic recovery will be K-shaped. In 2021, as the vaccine rolls out across Canada, the economy is expected to pick up particularly in Q3 and Q4 with a 3% GDP growth for the year. However, this recovery will be very different for two groups within Alberta. For those in professional occupations, high income earners and knowledge workers, the recovery will happen quickly and feel a bit like the Roaring 20s. For those in the service, retail, restaurant and accommodation sectors or those in part-time jobs, the recovery will be much more challenging as jobs fail to materialize and pandemic-related government support ends.
4. It’s not going to be the same kind of recovery for every person. Those hit harder by the pandemic could face serious economic difficulties. This is something all Canadians should pay attention to, says Hirsch.
“A lot of problems we’re seeing around the world are due to a disparity of income and opportunity. In Canada, this disparity had widened before the pandemic, and post-pandemic, we could see this disparity accelerated. When this gap gets too large, it can lead to social and political unrest,” he says.
5. Expect adaptation in the post-pandemic economy. Todd says there are three sectors in Alberta that he believes will provide potential for growth as the economy adapts to post-pandemic realities:
- Technology and digital sectors will continue to offer great growth opportunities for years to come.
- Agriculture and Agrifoods specifically related to food and beverage value-added services.
- Renewable energy and clean energy tech such as geothermal, hydrogen production, carbon capture and storage.