Alberta economy benefitting from population surge, Trans Mountain expansion: report

Crowds at the Calgary Stampede parade in Calgary, Sunday, July 9, 2023. (THE CANADIAN PRESS/Jeff McIntosh)

The Canadian economy is beginning to settle down and Alberta is in a positive position, according to a new economic report.

According to Deloitte’s summer 2024 economic outlook, Alberta is benefiting from a population surge, as Canadians from other provinces are moving here in search of a lower cost of living.

That being said, in May, Alberta’s year-over-year inflation was slightly higher than the national average at three per cent compared to 2.9 per cent.

“Alberta is experiencing tight housing market conditions as more people come to the province, and it also has the third largest household debt to GDP ratio,” Dawn Desjardins, Deloitte Canada’s chief economist, said.

The opening of the Trans Mountain Pipeline expansion is also predicted to have a positive impact, with GDP expected to gain 1.5 per cent this year and 3.3 per cent next year.

Nationally, the economy is beginning to settle down.

“The economy is managing to do OK in 2024, in fact, the first half of the year was a bit stronger than anticipated and we think we’ll see momentum build in the second half of the year,” Desjardins said.

While inflation rose to 2.9 per cent in May, overall it has been on a steady decline from 8.1 per cent in June 2022.

The Bank of Canada has started decreasing interest rates, but Deloitte believes the central bank will move slowly.

 “We’ll probably see two more rate reductions this year, but not until September and December,” Desjardins said. 

The next rate decisions are July 24, Sept. 4, Oct. 23 and Dec. 11. 

“We think more than a one percentage point decrease in the overnight rate as we go through 2025,” she added.

The report suggests Canada needs to improve weak business investment and productivity and decrease unit labour costs, to hit the target of two per cent inflation.