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Alberta

Any Downturn in Alberta’s Economy Would Inevitably Drag Canada’s Down With It

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From the Frontier Centre for Public Policy

By Troy Media

Is anyone paying attention?

Canada is heading straight for an economic iceberg, and the rest of the country doesn’t seem to grasp the gravity of the situation. Alberta – long the engine of Canada’s prosperity thanks to its oil and gas sector – is facing a serious decline because the Trudeau government is obsessed with its net-zero policies. And if Alberta falters, the ripple effects will drag down the entire nation. But are we too preoccupied with federal climate targets to recognize the risks staring us in the face?

The Trudeau government’s push for net-zero emissions by 2050 may look noble on paper, but the real-world cost could be catastrophic. The numbers don’t lie: according to a recent column by Troy Media contributor Lennie Kaplan, Alberta’s oil production could drop by a staggering 54 percent by 2050. That’s not just a provincial problem; it’s a national economic emergency waiting to happen.

Let’s cut through the jargon. Alberta makes up about 15 percent of Canada’s GDP. If Alberta’s economy shrinks by $32 billion – as projected – it would trigger a 1.2 percent drop in Canada’s GDP. For context, that’s a multi-billion-dollar hole in a country whose economy is, itself, already in severe decline.

Does Ottawa think a shrinking economy will put us in a stronger position to innovate and grow? Or are they content with turning Alberta into a sacrificial lamb on the altar of climate policy, ignoring the fact that this will make Canada less competitive on the world stage?

Then there’s the job market. Alberta’s energy sector employs thousands and indirectly supports tens of thousands more across Canada. By 2050, again according to Kaplan, Alberta could shed 198,000 jobs – five percent of its workforce. These aren’t just oil rig workers; they’re engineers, construction crews, transport workers, and more.

It gets worse. When Alberta’s economy shrinks, industries from coast to coast that depend on Alberta’s vitality will also take a hit. If even 10 to 15 percent of those job losses trickle across the country, we’re looking at another 20,000 to 30,000 Canadians joining the unemployment line. Yet, where is the urgency to address this looming crisis?

Alberta isn’t just a provincial powerhouse – it’s also a major contributor to federal revenues. Between 2025 and 2050, the province’s contributions could drop by $221 billion due to declining oil and gas revenues. That’s less money for healthcare, infrastructure, and social programs from coast to coast.

For a federal government that already struggles to balance its books, the loss of up to $40 billion in federal tax contributions from Alberta is a fiscal disaster in the making. Where do they expect to make up that shortfall? Higher taxes? Slashed services? Or maybe another round of federal borrowing to kick the can down the road?

Alberta’s oil and gas isn’t just a provincial asset – it’s a critical part of Canada’s trade balance. In 2022, energy exports made up 20 percent of Canada’s total exports. Cut that by more than half, and you’re gutting Canada’s international trade position.

A $70 to 80 billion hit to export revenue could balloon the country’s trade deficit, further devaluing the Canadian dollar and making imports more expensive. In short, this isn’t just bad news for Alberta – it’s an economic calamity that could send shockwaves through every corner of the country.

And let’s not forget the federal equalization program. Alberta has long been a “have” province, contributing far more than it gets back. But if Alberta’s economy falters, it could soon be knocking on Ottawa’s door for handouts.

Imagine the political firestorm if Alberta becomes a “have-not” province, competing for federal support with the very provinces that have relied on its success. The strain on equalization could pit regions against each other, creating a toxic political environment when unity is more crucial than ever.

Does Ottawa even care?

Alberta’s decline isn’t just Alberta’s problem. It’s a Canadian problem. The Trudeau government’s climate obsession needs to take this into account. We cannot afford to sacrifice Alberta’s economic engine without dragging the rest of the country down with it.

What’s the plan to balance climate goals with economic reality? So far, there’s been little more than vague promises and short-term thinking. If Ottawa doesn’t wake up to the real-world consequences of Alberta’s decline, we’re all in for a harsh economic reckoning.

It’s time for our leaders to prioritize pragmatic solutions over virtue signalling. Because if Alberta goes down, the rest of Canada won’t be far behind.

First published here.

Troy Media is an editorial content provider to media outlets and its own hosted community news outlets across Canada.

Alberta

Big win for Alberta and Canada: Statement from Premier Smith

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Premier Danielle Smith issued the following statement on the April 2, 2025 U.S. tariff announcement:

“Today was an important win for Canada and Alberta, as it appears the United States has decided to uphold the majority of the free trade agreement (CUSMA) between our two nations. It also appears this will continue to be the case until after the Canadian federal election has concluded and the newly elected Canadian government is able to renegotiate CUSMA with the U.S. administration.

“This is precisely what I have been advocating for from the U.S. administration for months.

“It means that the majority of goods sold into the United States from Canada will have no tariffs applied to them, including zero per cent tariffs on energy, minerals, agricultural products, uranium, seafood, potash and host of other Canadian goods.

“There is still work to be done, of course. Unfortunately, tariffs previously announced by the United States on Canadian automobiles, steel and aluminum have not been removed. The efforts of premiers and the federal government should therefore shift towards removing or significantly reducing these remaining tariffs as we go forward and ensuring affected workers across Canada are generously supported until the situation is resolved.

“I again call on all involved in our national advocacy efforts to focus on diplomacy and persuasion while avoiding unnecessary escalation. Clearly, this strategy has been the most effective to this point.

“As it appears the worst of this tariff dispute is behind us (though there is still work to be done), it is my sincere hope that we, as Canadians, can abandon the disastrous policies that have made Canada vulnerable to and overly dependent on the United States, fast-track national resource corridors, get out of the way of provincial resource development and turn our country into an independent economic juggernaut and energy superpower.”

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Alberta

Energy sector will fuel Alberta economy and Canada’s exports for many years to come

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From the Fraser Institute

By Jock Finlayson

By any measure, Alberta is an energy powerhouse—within Canada, but also on a global scale. In 2023, it produced 85 per cent of Canada’s oil and three-fifths of the country’s natural gas. Most of Canada’s oil reserves are in Alberta, along with a majority of natural gas reserves. Alberta is the beating heart of the Canadian energy economy. And energy, in turn, accounts for one-quarter of Canada’s international exports.

Consider some key facts about the province’s energy landscape, as noted in the Alberta Energy Regulator’s (AER) 2023 annual report. Oil and natural gas production continued to rise (on a volume basis) in 2023, on the heels of steady increases over the preceding half decade. However, the dollar value of Alberta’s oil and gas production fell in 2023, as the surging prices recorded in 2022 following Russia’s invasion of Ukraine retreated. Capital spending in the province’s energy sector reached $30 billion in 2023, making it the leading driver of private-sector investment. And completion of the Trans Mountain pipeline expansion project has opened new offshore export avenues for Canada’s oil industry and should boost Alberta’s energy production and exports going forward.

In a world striving to address climate change, Alberta’s hydrocarbon-heavy energy sector faces challenges. At some point, the world may start to consume less oil and, later, less natural gas (in absolute terms). But such “peak” consumption hasn’t arrived yet, nor does it appear imminent. While the demand for certain refined petroleum products is trending down in some advanced economies, particularly in Europe, we should take a broader global perspective when assessing energy demand and supply trends.

Looking at the worldwide picture, Goldman Sachs’ 2024 global energy forecast predicts that “oil usage will increase through 2034” thanks to strong demand in emerging markets and growing production of petrochemicals that depend on oil as the principal feedstock. Global demand for natural gas (including LNG) will also continue to increase, particularly since natural gas is the least carbon-intensive fossil fuel and more of it is being traded in the form of liquefied natural gas (LNG).

Against this backdrop, there are reasons to be optimistic about the prospects for Alberta’s energy sector, particularly if the federal government dials back some of the economically destructive energy and climate policies adopted by the last government. According to the AER’s “base case” forecast, overall energy output will expand over the next 10 years. Oilsands output is projected to grow modestly; natural gas production will also rise, in part due to greater demand for Alberta’s upstream gas from LNG operators in British Columbia.

The AER’s forecast also points to a positive trajectory for capital spending across the province’s energy sector. The agency sees annual investment rising from almost $30 billion to $40 billion by 2033. Most of this takes place in the oil and gas industry, but “emerging” energy resources and projects aimed at climate mitigation are expected to represent a bigger slice of energy-related capital spending going forward.

Like many other oil and gas producing jurisdictions, Alberta must navigate the bumpy journey to a lower-carbon future. But the world is set to remain dependent on fossil fuels for decades to come. This suggests the energy sector will continue to underpin not only the Alberta economy but also Canada’s export portfolio for the foreseeable future.

Jock Finlayson

Senior Fellow, Fraser Institute
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