Despite gloom, boom times are around the corner
As Alberta returns to a third lockdown, it's hard to imagine a time when we will be back to normal. The premier says weeks; Dr. Deena Hinshaw says months. People keep telling me they keep watching for the headlines that say, “It's over.”
If you haven't had a chance to talk to people about what life looks like POST-COVID, you should check out the Advantage Alberta seminars hosted by Postmedia. I had the opportunity to moderate one last week with Jack Mintz, the chair of the Alberta Economic Recovery Council; Dave Filipchuk, president and CEO of PCL Construction; and Crystal Young, president and CEO of the Fort Mckay Métis Group. It was Part 1 of a two-part discussion hosted by Postmedia (Part 2 took place on Wednesday hosted by Postmedia columnist Licia Corbella).
If you are feeling down, this panel discussion is an antidote to gloom. Alberta is set to boom.
It may not feel like it from where we are now, but there are a lot of factors setting the stage for a takeoff. One factor is what federal Finance Minister Chrystia Freeland called “preloaded stimulus.” People have a lot of money in their bank accounts. What this tells me is households have a sizable budget for the things we haven't been permitted to do: go to hockey games, concerts, movies, comedy clubs, festivals, travel, dining out and other community activities. There will be a lot of bankruptcies in this sector to be sure, but those who managed to hang on are expecting a very busy summer when we reopen.
At the same time, commodity prices are booming, and Alberta has everything the world wants. As much as the extreme environmentalists argue that the age of hydrocarbon fuels is over, the reality is otherwise. According to Statistica, the world use of oil peaked at 99.7 million barrels per day in 2019 before COVID. It declined to 91 million barrels per day when the entire globe shut down in 2020. But we are expected to return to those high levels and will likely exceed the high water mark by 2023. Industry remains thirsty for reliable energy. We also have a first mover advantage on blue hydrogen, which is made from plentiful methane. Coupled with carbon capture technologies, this could be the answer to a net-zero future that is both sustainable and achievable.
But forestry is also booming. People are going to discover this when they go to build a deck or a fence this summer that lumber prices have increased 60 per cent. Agriculture is facing a similar boom. Canola prices peaked at $16 a bushel, up from $10 last year. The year 2020 saw the best retail demand for beef and ranchers are now seeing beef prices on an upward trend again.
Even looking to new energy and the rare earth minerals needed for that, Alberta's old oilfields in Leduc are being reconsidered for their lithium rich waters that can be extracted and refined. Calgary was abuzz a few weeks ago when Infosys (market cap US$76 billion) announced it was going to expand to Calgary, bringing at least 500 new jobs in the next three years and perhaps more.
A new charter school to teach kids science, technology, engineering and math in the K-12 area already has 1,000 kids wanting to sign up. Eliminating the cap on film and TV production will attract even more blockbusters to Alberta.
It doesn't seem to matter how hard the times get, Alberta maintains its ability to create jobs and wealth. Even in our worst period, one that has lasted since the fall of 2014 and continued until COVID brought massive transfers to Canadians everywhere, Alberta always contributed more in federal taxes than we got back in federal transfers. Not only do I expect that to continue, but we may be on the cusp of the kind of boom we haven't seen since 2006. Our panellists talked about emerging signs that we were already going to be seeing shortages of qualified labour.
All that and Alberta has affordable housing, outstanding universities and technical schools, world-class parks, ski hills and resorts, and two vibrant cities offering a wide range of sporting and cultural events, both with international airports that provide gateways to both the south and north.
The conference was called Advantage Alberta. We've got that in spades. Can you understand the excitement now?