One of my first speaking gigs as ATB’s new Chief Economist was last year’s ATB Business Summit in Calgary. 

A year ago, underlying inflation was running hot and there was almost no talk about interest rate cuts. We were in the midst of the inflation storm. When you’re in a storm, and headwinds start blowing, you need some help. In road cycling, it’s best to be behind someone’s wheel - that is, in the “draft” breaking the headwinds.

That was the picture I painted for Alberta. And for the most part it’s been true. The headwinds were strong: high inflation, rising interest rates, two wars, wildfires, drought conditions, and port strikes. The economy slowed considerably last year.  But Alberta was behind the wheel, drafting. Employment growth outpaced the rest of the country, and record numbers moved from across the country.

Fast forward to this year’s ATB Business Summit held May 23rd. I lost the road biking analogy, but I did talk about mountain biking (long story, I’ll tell you next time we chat). Inflation is trending in the right direction and the first rate cut is expected this summer. And finally some long-awaited improvements to market access: Coastal GasLink is built and the Trans Mountain Expansion has entered into service. All told, Alberta is expected to be among Canada’s growth leaders this year and next. Our March forecast pegs real GDP growth at 2.3% this year and 2.7% next. Stay tuned for a new forecast next month!

Are we in the clear? Not yet. The economy is now feeling the force of past rate hikes, and consumers are pulling back. Geopolitical tensions are elevated and weather remains a wild card despite some recent rains.

Attention will soon turn to what the economy looks like after the battle against inflation is won. After a prolonged adjustment to a series of shocks - lower oil prices (2015-16), market access issues (2018-19) and COVID (2020) - Alberta’s economy is finding its footing. It’s not the classic oil and gas expansion - capital spending remains well below 2014 levels. But energy production continues to rise, and growth is broadening across sectors (e.g. technology, hydrogen, petchem, tourism, etc.).

I highlighted our new study on interprovincial migration. At various real estate events, I kept hearing, “you wouldn’t believe all the out-of-province inquiries we’re getting.” I looked at a scatter plot that left me scratching my head: my “go-to” explanation as to why folks come to Alberta (net migration vs. unemployment rate differentials) was not working well. After some serious digging, our study concludes that the labour market is still important, but relative housing affordability is playing an outsized role this time around. Remote work is also now a key factor, with the number of out-of-province at home workers surging.

Economic forecasting is a humbling experience no matter how good you are at it. The world is an uncertain place (a good read is “The Next Age of Uncertainty” by former BoC Governor Stephen Poloz). As a major resource producer, Alberta’s exposure to global risks is particularly high. But forecasting is worth the effort and we run scenarios to account for risks.

In this job, it helps to talk to industry experts. I have the fortune of being surrounded by many of them at ATB.  Whether it’s the ATB Capital Markets team on interest rates and energy prices, our agriculture lending team, or our real estate experts, there are lots of smart people to talk to who understand the market.

On that note, I moderated a panel with ATB’s leading experts in energy services and diversified industries, agri-food, rural markets, and real estate: Trina Holland, Jonathan Neutens, Jenn Craig and Neil Ternovatsky. An optimistic tone emerged about the year ahead.

It was also a pleasure to hear a candid and inspirational fireside chat with former CEO of United Airlines Oscar Munoz and Dragon's Den host Dianne Buckner. And of course, it’s always good to hear from our CEO Curtis Stange, CFO Dan Hugo and Board Chair Joan Hertz.

The event was expertly emceed by Chris Turchansky, ATB’s Group Head of Business and Wealth. One of the highlights for me was a beautiful Indigenous Fancy Dance by Patrick Mitsuing and team.

Overall, it was a fantastic event, made possible by the hard work and dedication of the organizers: Deziree Mackenzie, Kate Lord, Crystal Nash and many many others.

Answer to the previous trivia question: The population of the Edmonton Census Metropolitan Area was 1,563,571 as of July 1, 2023.

Today’s trivia question: Which country is larger in terms of its total land and water area: China or Brazil?