In data released last week, Alberta recorded its fourth consecutive calendar year of net positive interprovincial migration—that is, more people moved to Alberta than left for other provinces and territories.

But that’s not really the story. Alberta is no stranger to interprovincial migration: in 36 of the last 50 years, Alberta has seen net inflows from elsewhere in the country.

The story is that the latest wave of migration looks different—much different. This updated scatter plot—one of my personal favourites—makes the point.

It shows that there have been only four years since 1976 where Alberta has added people from the rest of Canada when it has had a higher unemployment rate than the Canadian average. And those four years just so happen to be the last four years.

Staring at this scatter plot two years ago, I searched to find the missing piece to this scatter plot puzzle. It resulted in a fairly detailed paper, which concluded the following:

1) More than just the energy sector. Traditionally, migration has been linked to energy booms, which has not been the case this time around. Opportunities have broadened beyond oil and gas.

2) More than the labour market. The scatter plot makes the point. While Alberta has persistently generated more job growth over this period, it’s also had a higher unemployment rate. In other words, jobs have not, until recently, kept up with the people, resulting in more job seekers and upward pressure on unemployment.

3) The rising importance of affordability. This is the real kicker to the story, and we think it is driving the results in the scatter plot. Affordability is playing an outsized role this time around.

A few factors point us in the “chasing affordability” direction: 1) post-pandemic, affordability has consistently ranked as one of the top concerns in Canada; 2) in 2022, before the Bank of Canada rate hikes, Alberta’s housing price advantage versus the national average was at record levels; 3) a shift in age composition to younger migrants, likely feeling more of the affordability pinch; 4) disproportionately higher inflows from higher-priced housing markets in B.C. and Ontario; and 5) a similar trend towards more interprovincial migration to Atlantic Canada, where housing is also cheaper.

4) The rise of remote work. This is linked to the affordability narrative. Remote work has created more freedom to separate place of work and place of residency decisions. Post-pandemic, we’ve seen a jump in out-of-province remote workers. That is people who live in Alberta, but report to an employer in another province. Many Canadians asked: why not keep the same job, but get a cheaper home? Our prediction, however, is that this effect will fade as more people are asked to return to their physical work location.  

What’s next?

We expect a continuation of recent trends. Slowing, but still positive inflows.

Why slowing? The Canada-Alberta housing price gap, while still positive, has narrowed.

Why positive? In the current environment, Alberta’s economy is expected to outperform, and its labour market has been gaining strength over other provinces.

Over the next two years, we expect net interprovincial migration to moderate to around 20,000 per year—about half of 2023 and 2024 levels.

We’re not alone in expecting this pattern to unfold. In all 10 of Statistics Canada’s population projection scenarios, interprovincial migration to Alberta is positive ranging from an annual average of 1,900 to 47,100 between 2026 and 2050.

I’ll conclude with my scatter plot prediction. I think 2025 is the last year we’ll see a dot in the northwest quadrant. Migration will go back to its usual pattern of being more responsive to labour market conditions and less driven by affordability. And for the first time since 2015, we think Alberta will have a lower unemployment rate than the national average this year. Jobs are now more than outpacing growth in the labour force, putting downward pressure on Alberta’s unemployment rate.

So this time next year, when I unveil an updated scatter plot, expect to see a 2026 dot somewhere in the northeast quadrant of the scatter plot.

I’m sure you can’t wait.  

Answer to the previous trivia question: Alberta recorded its largest quarterly gain from interprovincial migration in the third quarter of 1981 at 20,706.

Today’s trivia question: In what year did John Herschel create the first scatter plot?