Alberta poised to thrive despite economic challenges, SouthGrow told
By Delon Shurtz - Lethbridge Herald on April 1, 2023.
LETHBRIDGE HERALDdshurtz@lethbridgeherald.com The term Alberta advantage doesn’t get spoken as often as it used to, but it’s still alive and well, and will likely help the province rise above the challenges expected over the next decade and beyond, says an Alberta economist and university professor,Jack Mintz, president’s fellow, school of public policy at the University of Calgary, says the Alberta advantage is still in pretty good shape, but the question remains whether it will continue to fare as well in the face of turbulent times and threats expected in the future.
Mintz, who was the keynote speaker Thursday at the annual meeting in Lethbridge of the SouthGrow Regional Initiative, said people still believe Alberta is a great place to live, and it attracts people who want to work hard, do well and prosper.
“When people say that Alberta is the most entrepreneurial province in the country…it’s true, Mintz said.
However, it may not have appeared to be only three years ago during the COVID pandemic.
“Things were very grim in April of 2020.”
Fortunately, when Mintz was chairman of the Alberta Premier’s Economic Recovery Counsel, industry leaders didn’t want to talk about getting government handouts. Instead, they said, “what we really would like in the recovery, is the government to get out of our way.”
Changes to government regulations didn’t make a lot of sense, and while regulations are necessary, they need to facilitate investment by making it easier, Mintz said. At the same time, out east at an Ontario Chamber of Commerce meeting, industry leaders’ plans for recovery was drastically different, and they talked about guaranteed income and subsidies.
“That was their discussion, but that was not the discussion in Alberta.”
That’s because, Mintz suggests, Alberta has an entrepreneurial economy, which will bode well for the province in the future.
Prospering in the future will still be challenging, however, and Mintz has identified six specific areas that will challenge Alberta and the rest of the world in the next decade alone: an aging population, trade, immigration, energy transition, public debt and technology.
Canada has the oldest median age in the world, and it’s only going to get older. That will shrink the size of the workforce and skilled labourers as more people retire, and increase the stress on, among other things, healthcare expenditures. It will also reduce the amount of taxes paid to the government, resulting in higher tax rates.
Mintz believes energy transition will be one of the biggest threats to Alberta’s economy, particularly because the province relies heavily on the oil industry.
Energy transition is a significant structural change in an energy system regarding supply and consumption, such as the current and ongoing transition to sustainable energy to limit climate change.
“If we don’t maintain reliable, cheap energy, that’s when you impact economic growth, as well. For Alberta, this is probably one of the biggest threats.”
Public debt is also a concern, especially as governments get more indebted. The world’s average debt rate is 90 per cent of the gross domestic product, while the U.S. debt is a whopping 128 per cent. In Canada the rate is 113 per cent, while in Alberta it is only 11 per cent.
“This is where Alberta has a big advantage,” although, Mintz points out,if the province includes the federal portion of the debt for which Alberta is responsible, the rate rises to 69 per cent.
Mintz is heartened further by the UCP’s and NDP’s push for a balanced budget.
Despite the challenges facing the world, Mintz believes Alberta is positioned to face them and find solutions and alternatives, especially when it comes to technology.
“We don’t sit back, we look for new things, we try to find new things. And that’s what makes us a great province.”
During the pandemic, for example, technology allowed people to work from home. And vaccinations helped people get out of the pandemic sooner than later.
“This shows us that innovation has a huge impact in getting over the problems we face.” Follow @DShurtzHerald on Twitter 4
-3
