In Alberta, Canada's oil hub, there's been a notable surge in population. But instead of bringing economic prosperity, it's had a surprising effect on living standards. Recent data analyzed by economist Charles St-Arnaud reveals a concerning trend: despite the influx of people, Alberta's economy has actually shrunk to levels not seen since 2004 on a per-person basis.
The numbers are stark. Alberta's gross domestic product (GDP) per capita took a hit, dropping by 2.2 percent in 2023, marking one of the sharpest declines across all Canadian provinces. This decline stands in stark contrast to the mere 1.5 percent growth in economic activity. The culprit? A rapid population growth of 4.1 percent, far outstripping the pace of economic expansion.
The allure of cheaper real estate compared to pricey markets like Toronto and Vancouver has drawn scores of Canadians to Alberta. But this influx hasn't come without consequences. Schools are feeling the strain of overcrowding, and residents are grappling with soaring housing costs.
Alberta's GDP per capita now sits at $71,900 (US$52,545), the lowest level since 2010 when excluding the pandemic, and equivalent to figures from 2004. This stagnation in wealth accumulation over two decades is concerning, especially considering Alberta's status as Canada's wealthiest province, boasting a per capita GDP that surpasses the national average by roughly 30 percent.
St-Arnaud underscores the prevailing unease among Albertans despite their comparative wealth. The decline in GDP per capita over the past two decades has contributed to a sense of economic uncertainty and discontent among residents. As Alberta grapples with the ramifications of its population boom, finding solutions to balance economic growth with maintaining living standards remains a pressing challenge.
