Alberta growth poised to lead Canada

Alberta’s economic growth should be stronger this year than earlier predicted and will lead the country before slowing in 2018, the Conference Board of Canada’s spring provincial outlook says.

The province’s 2017 gross domestic product (GDP) is now set to increase by 3.3 per cent, up from the 2.8-per-cent rise the conference board expected last winter, according to a report released Monday.

“In the winter we didn’t have as much monthly data on some of the key economic indicators, and they’re coming out to be more positive for Alberta than we expected,” Marie-Christine Bernard, associate director of the non-profit research group’s provincial forecast service, said in an interview.

The revised number is slightly higher than Alberta’s average annual 3.2-per-cent GDP growth between 1995 and 2015.

Job creation, consumer demand, the housing market and the oil and gas drilling season were all stronger than anticipated following Alberta’s worst recession in more than a half-century, Bernard said.

Other factors are Fort McMurray reconstruction and strength in the manufacturing sector, which will be boosted by next fall’s opening of the Sturgeon refinery and full production at Suncor’s Fort Hills oilsands project in 2018.

“When we were putting our forecast together last time we had to make some assumptions … I think (the recovery) is still in the early stages ... but it’s a good start.”

The report comes out after S&P Global Ratings lowered Alberta’s credit rating last week by two notches, from AA to A+, citing concerns about “continuing budgetary performance deterioration and growing debt.”

Finance Minister Joe Ceci said the government chose to support growth and create jobs rather than make cuts, a strategy that paid off.

The conference board forecasts the provincial economy will see a 2.4-per-cent boost in 2018, also better than foreseen last winter.

It warns these projections could be undermined if West Texas Intermediate oil prices don’t average US$50 to US$55 in 2017 and US$58 next year as anticipated.

A separate conference board report shows Edmonton’s economy expanding by 2.4 per cent this year, tied for second place among 13 major Canadian metropolitan areas and slightly ahead of Calgary.

The local area is supported by primary goods, utilities, manufacturing, construction and a strong public sector that has cushioned the capital region during the downturn.