You are only as good as your last shift
Alberta’s oil and gas industry remains a critically important driver of our economy, but limits have been placed on its future growth
By Rob Roach, ATB Economics 20 October 2022 3 min read
I had the pleasure yesterday to be part of Calgary Economic Development’s 2023 Economic Outlook. My presentation outlined the top 10 things we need to know about the provincial economy as we head into 2023 and beyond. The first half of the list is focused on current conditions. The second-half takes a longer view, but each item still requires concerted action in the present.
Here’s a quick summary:
10. Alberta has a very strong economy: There are a lot of great things going on in Alberta and we have a long list of advantages. This is important to stress because we are facing an array of difficult challenges and we don’t want to fall into the trap of negative thinking.
9. The invasion of Ukraine: The invasion is a major drag on the global economy and we don't know when it will end.
8. Inflation: Even if things go according to plan (see #7), it will likely take until 2024 before the inflation rate returns to the Bank of Canada’s target of 2%.
7. Interest rates: Central banks have been raising interest rates in an effort to address inflation with more increases still on the horizon.
6. Same water, different boats: Albertans are facing the same rough economic waters brought on by the invasion, elevated inflation and rising interest rates, but we are in a somewhat better boat because of the boost our economy is getting from higher commodity prices. As a result, Alberta will avoid slipping into recession next year.
5. The aging of the population: We’ve known about this for decades, but we are still not fully prepared for the opportunities and challenges the aging of our population has, and will, generate.
4. The tech transition: Alberta has been making headway with regard to growing our tech sector, but we also need to be ready and able to adapt as new technology changes the game for employees, employers, consumers and educators.
3. The energy transition: Alberta’s oil and gas industry remains a critically important driver of our economy, but limits have been placed on its future growth and efforts to reduce carbon emissions could even see it lose ground over time. On the bright side, opportunities are being created by the global energy transition that Alberta has been seizing.
2. The labour transition: The aging of the population and the tech transition are creating labour shortages. At the same time, workers are seeking different relationships with their employers. This will require us getting better at everything from foreign credential recognition and on-the-job training to formal education and flexible work arrangements.
1. Eroding trust: For our economy to function well, we need to trust each other. Whatever the reasons, trust seems to be eroding. How to fix this is a complex question, but it’s clear that both our economy and society will suffer if we do not.
In summary, Alberta is like an elite hockey team. We are highly competitive and have a lot of talent. But, it’s a long season followed by the playoffs. Then we need to do it all again next season and so on. The pursuit of economic success, in other words, doesn’t end after a goal is scored and it requires tremendous effort to achieve. As they sometimes say in hockey, “you are only as good as your last shift.”
Answer to the previous trivia question: Physical euro coins and banknotes entered into circulation on January 1, 2002.
Today’s trivia question: What percentage of Alberta’s labour force is in the age 55 and over category?