The Toronto Dominion Bank has issued a new report on the Alberta economy today (10 days after the release of the Royalty Review Report) saying the “Alberta Boom Will Not Go Bust.” They predict another “solid advance in real GDP of 4.3% in 2007 after accounting for lower gas prices and activity. The reasons are based on “…the massive surge in oil sands investments and related activities as a key driver in the province’s ongoing expansion.
The Edmonton Calgary Corridor is going to grow even faster at an estimated 5% in 2007. They also predict the growth in 2008-09 will moderate to 2.5-3% “…because of dampening forces on demand stemming from rising labour costs, producer and infrastructure costs. This simmering is seen as a good thing and a chance for Alberta to catch her breath and according to the TD Bank “…is what the doctor is ordering to ensure that expansion continues over the medium term.”
They make a point about the growth in medium sized (10k-100k populations) centres in Canada. Alberta has 7 of the fastest 15 such cities and 5 of those Alberta municipalities are outside the Edmonton Calgary corridor.
The Edmonton Calgary Corridor is ranked 4th amongst the 19 largest North American urban centres in terms of job creation and lowest unemployment in 2006. The average purchasing power for Albertans living in the Corridor is $57,000 in 2005, a full $15,000 above the average American’s purchasing power. If the Edmonton Calgary Corridor were an OECD country its prosperity would rank second in the world – just behind Luxembourg.
There is a cost to good times. Labour markets are tight and the retiring baby boomers will make it harder to sustain growth. Housing shortages and recent dramatic price hikes makes affordability is a problem and vacancy rates make it worse.
Infrastructure is strained and new growth requirement are putting project in jeopardy because of premium pricing and worker and material shortages. As a result government spending has skyrocketed increasing 12% per year every year since 2004.
While Alberta is the new economic engine of Canada other parts of the country are suffering because they have to compete and costs have gone up as a result. That said the TD notes 60% of the oil sands spin off goes to the rest of Canada through demands for manufacturing. The higher incomes for Alberta residents’ results in them paying a net $9B per year more than other Canadians into federal taxes. That is about $3000 for every man woman and child living in Alberta today. The other provinces benefit form Alberta’s prosperity because they can keep taxes lower because they now qualify for even larger equalization payments.
The Edmonton Calgary Corridor is going to grow even faster at an estimated 5% in 2007. They also predict the growth in 2008-09 will moderate to 2.5-3% “…because of dampening forces on demand stemming from rising labour costs, producer and infrastructure costs. This simmering is seen as a good thing and a chance for Alberta to catch her breath and according to the TD Bank “…is what the doctor is ordering to ensure that expansion continues over the medium term.”
They make a point about the growth in medium sized (10k-100k populations) centres in Canada. Alberta has 7 of the fastest 15 such cities and 5 of those Alberta municipalities are outside the Edmonton Calgary corridor.
The Edmonton Calgary Corridor is ranked 4th amongst the 19 largest North American urban centres in terms of job creation and lowest unemployment in 2006. The average purchasing power for Albertans living in the Corridor is $57,000 in 2005, a full $15,000 above the average American’s purchasing power. If the Edmonton Calgary Corridor were an OECD country its prosperity would rank second in the world – just behind Luxembourg.
There is a cost to good times. Labour markets are tight and the retiring baby boomers will make it harder to sustain growth. Housing shortages and recent dramatic price hikes makes affordability is a problem and vacancy rates make it worse.
Infrastructure is strained and new growth requirement are putting project in jeopardy because of premium pricing and worker and material shortages. As a result government spending has skyrocketed increasing 12% per year every year since 2004.
While Alberta is the new economic engine of Canada other parts of the country are suffering because they have to compete and costs have gone up as a result. That said the TD notes 60% of the oil sands spin off goes to the rest of Canada through demands for manufacturing. The higher incomes for Alberta residents’ results in them paying a net $9B per year more than other Canadians into federal taxes. That is about $3000 for every man woman and child living in Alberta today. The other provinces benefit form Alberta’s prosperity because they can keep taxes lower because they now qualify for even larger equalization payments.
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