It was a pleasure speaking to a full house at the Alberta's Industrial Heartland Association (AIHA) annual conference last week. The timing was great, just after the release of our most recent Quarterly Economic Outlook.

The energy in the room was a reflection of what’s happening on the ground. While the Alberta economy is slowing due to trade headwinds, the province is poised to grow faster than the rest of the country, driven by population growth, new market access for energy, and home construction. Expanding industrial capacity in the Heartland is also an important part of Alberta’s growth story.   

From potential to projects

As Canada's largest hydrocarbon processing region, Alberta's Industrial Heartland adds value to Alberta’s abundant energy resources. While investment on the extraction (or upstream) side of the business is still well below 2014 levels in Alberta, there has been a significant increase in capital spending on new downstream facilities designed to process oil and gas resources here at home. Moreover, recent investments have been focused on low to net zero carbon projects.

The momentum is tangible, with major projects like Dow's Fort Saskatchewan Path2Zero net-zero expansion project, Air Products' Net-Zero Hydrogen Energy Complex, Yellowhead Pipeline Project (though still early in the regulatory process), and Imperial's renewable diesel facility transforming the region. In the spring, Dow paused construction on its Path2Zero facility due to market uncertainty, but remains committed to the project.

These projects build on the success of those recently completed, like the Interpipeline Heartland Petrochemical Complex. They’re multi-billion dollar investments that are having a material impact on Alberta’s economy and outlook.  

From productivity to prosperity

Why is this especially important right now? The industries concentrated in the Heartland region—such as petroleum manufacturing, chemical manufacturing, and pipeline transport—are among the most productive (GDP per hour) and highest-paying (compensation per hour) in the country.

Canada is facing serious productivity challenges, with productivity growth slowing in Canada and Alberta. More investment in these high-valued industries could go a long way to improving the country’s performance.  

Alberta’s Industrial Heartland has demonstrated the value of establishing an industrial cluster with shared infrastructure and integrated supply chains, all while building off existing resource strengths.

As Canada looks to turn its productivity record around and become the ‘strongest economy in the G7’, it’s worth asking: What can we learn from the Heartland model? In particular, how can Canada leverage its existing resource strengths, build new industrial capacity, and expand into new markets? 

Answer to the previous trivia question: Jasper National Park is named after Jasper Haws, a North West Company fur trader who operated a trading post in the area from 1814 to 1817.

Today’s trivia question: Fill in the blank: Suncor and ______ have announced a joint venture to build a hydrogen production facility near Fort Saskatchewan, Alberta, capable of producing 300,000 tons annually.