Alberta’s economy on slow mend, TD Bank says

CALGARY• TD Bank says Alberta’s economy is headed in the right direction, but warns there are still hurdles that could hinder recovery.

A report released Thursday by deputy chief economist Derek Burleton is predicting economic growth between two and 2.5 per cent for Alberta in the next year following an increase of nearly 4.9 per cent in 2017.

“It was a nice bounceback last year, but growth is settling down this year and we’re of the mind that you’re gonna get a continued moderate growth run over the next couple of years as the economy kind of settles down,” Burleton said.

“I don’t think many were anticipating a heroic recovery despite the fact that the recession was quite deep. Oil production should grow despite some of the challenges in terms of pipelines. That’ll get us two per cent, which is not heroic.”

Burleton said Alberta’s economy is within a year of returning “home” — a term used to characterize full recovery from a recession. However, it could be another two years before the job market fully recovers.

The economist said the lack of investment in Alberta, particularly in the oil and gas sector, remains a concern.

“I think that’s the Achilles heel for recovery so far. It is basically the missing element,” he said. “Investment is not going to be catching fire soon. We’re not anticipating a lot of growth over the next few years and clearly there are some hurdles there.”

Burleton said Alberta could reassert itself as a leader in growth, but only if it deals with inadequate pipeline capacity, regulatory hurdles, and eliminating the government’s budget deficit.

“We still are of the mind that the economy will reassert itself,” he said. “It may be a bit at odds given the timing of this report just after the Trans Mountain decision and some of the concerns around the oil and gas sector.”

The forecast said there is reason for optimism, including the resiliency of global oil demand and limited supply outside of Alberta, and decreasing production costs.