During the five years that have transpired since the 2008-2009 recession, the average annual GDP growth rates in three of Canada’s four western provinces have exceeded the national average’s +2.5%. At +4.7%, Alberta has been almost twice as fast, followed by +3.9% in Saskatchewan and+2.7% in B.C. Only Manitoba has fallen a little short, +2.3%.
By the way, the best any province in the East has been able to manage is Ontario's +2.2%. Quebec average annual output change has been+1.4% and in the Atlantic Region, performances have ranged between +1.6 for Nova Scotia and -2.9% in Newfoundland and Labrador. Saving the best for last, though, Nunavut — at the country's crest — has achieved an outstanding +8.9%,leaving the Yukon and Northwest Territories, at +1.8% and +1.5% respectively,far behind.
The West has also excelled in population growth. In 2013(+2.9% annually, from April 1 to April 1) and 2104 (+3.0%), the increase in Alberta's resident count was three times greater than for Canada in its entirety. With the decline in prospects for employment in the oil patch, 2015's increase for Alberta has eased back somewhat, to +2.2%. Furthermore, this maybe too high on account of some built-in biases in population estimation techniques. A later revision showing further moderation will be no surprise.
Saskatchewan has recorded the second speediest population increases among the provinces of the West over the past three years: +1.8% in each of 2013 and 2014, but again decelerating to +1.3% in 2015. Manitoba has been consistently +1.2% in all three years. B.C. has bucked the downward trend in its closest neighbours by stepping a little higher one year at a time: +0.9%in 2013; +1.0% in 2014; and +1.1% in 2015.
Similar to the alteration in economic strength that is underway between West and East in Canada, a change in the pecking order among the provinces closest to the Pacific appears underway as well. Saskatchewan's energy exports may have tumbled (-37% year to date), but its farm product sales externally have improved (+4%), and international demand for its metals and minerals (+47%) has skyrocketed. The latter includes what's known in the trade as 'pink' gold, potash.
Saskatchewan's unemployment rate (5.2% in July) has also improved to best in the West, as well as Canada-wide. Manitoba (5.6%) is in second spot, while previous perpetual front runner Alberta has slipped to third,in a tie with B.C. (both at 6.0%).
As for the four major cities in Saskatchewan and Alberta,Regina (4.3%) and Saskatoon (5.8%) in the former province are ranked third and 11th among all 33 of the country's most populous cities for lowest unemployment rates, while Edmonton (5.7%) and Calgary (6.6%) in the latter province hold 10th and 21st positions.
Calgary is renowned, second only to Toronto within Canada,for its corporate head office concentration. Its business heart — comprised of giant, intermediate and speculative energy companies, surrounded by drilling and well-head service firms, plus legal, accounting and financing professionals— pumps oil and natural gas. When the revenue supply grows thinner, on account of lean prices, nearly everyone suffers. Layoffs and accompanying higher office vacancy rates are a consequence, beyond capital spending cutbacks at extraction sites, leading to dimmer future construction prospects.
Statistics Canada's most recent Capital and Repair Expenditures (CARE) survey, asking thousands of owners as to their investment spending intentions in 2015 versus 2014, records a 16.5% decline for oil and gas extraction in Alberta. The outlook has turned bleaker in the interim since the study was conducted. Oil prices first fell, recovered somewhat, then dropped again, to remain depressed longer than most analysts had been anticipating.
Also, the political climate in Alberta has undergone a transformation. The oilsands-friendly Conservatives have been summarily dispatched by voters, to be replaced by a considerably less sympathetic NDP crew. Royalty rates are under review and there will be a tightening of emissions standards, through a bumped up carbon tax.
Premiers in at least two of the other western provinces have been quick to seize on the opportunities presented by the shift in Alberta's electoral landscape. Saskatchewan's Brad Wall has been on the speaking circuit,regaling business audiences with assurances that they will be met with welcoming arms should they choose to move some of their operations in his province's direction. (For that matter, the Premier of Newfoundland and Labrador has also spoken out about how his jurisdiction is committed to as table and transparent energy taxing framework.)
Christy Clark's Liberal government in B.C. is determined to launch, from scratch, a world-scale liquefied natural gas (LNG) industry based in the province's northwest coastal corner. In its eyes, if laid-off and job-threatened energy-sector workers in Alberta begin to look further west for employment on new LNG exporting terminals and supply pipelines, — from northeastern B.C. traditional deposits and under-development shale rock basins — so much the better.
The cooling process to convert natural gas to a liquid requires abundant electric power. With this in mind, B.C.'s government in Victoria has finally, after decades of back-and-forth debate leading to delays,green-lighted expansion of hydroelectric capacity at Site C on the Peace River.
This is an excerpt from TheLeaders – Canada's Best in Construction: 2015 Edition – published in November by CMD. For information, visit www.leadersinconstruction.ca.