After years of recession, the province of Alberta is expected to make a rebound (bounce back) over the coming years, with projected growth in 2020 & 2012.
The Conference Board of Canada brought some good news to Alberta’s economy this week as they announced an expected rebound for the province throughout 2020 and 2021 in their Provincial Economic Outlook. Despite previous forecasts which predicted a 0.8% contraction for 2019, the commencement of construction of the Trans-Mountain Expansion next year has contributed to brightening financial forecasts which anticipate a growth of 2.4% and 3.1% in 2020 and 2021.
The project should significantly increase the province’s “future takeaway capacity” which will, in turn, draw new energy investment in Alberta’s Oil and Gas industry.
The Trans-Mountain Expansion will help to improve the outlook for the Alberta energy sector as it will greatly improve the “future takeaway capacity” and help to incentivize businesses and attract new energy investment.
The Conference Board of Canada mentioned that the Trans-Mountain Expansion project will be a key component to the Alberta economy and be a much-needed boost to the energy sector which has struggled mightily since 2014. Over the next five years, the Trans-Mountain Expansion project will provide labour jobs while increasing the takeaway capacity for oil producers. The Trans-Mountain Expansion will also act as an incentive for future expansions and new projects in the sector.
“Construction work on the Trans-Mountain Expansion project will … (bring) once-shelved oil sands projects back into serious consideration. The Conference Board of Canada expects the remaining legal challenges to delay the pipeline’s operation date until 2023; however, modest improvements to … Enbridge Line 3, the use of drag-reducing agents, and additional rail cars will provide enough congestion relief to increase oil production until then.”
The Conference Board of Canada also noted that the change in the political landscape has been a key contributor to the provinces’ economic forecast. Even though jobs were lost in the public sector, the estimated growth in the corporate sector is expected to compensate for the loss.
The growth spurred by increased takeaway capacity will help to begin mending the economic wounds Alberta has sustained over the last five years and is expected to lower the unemployment rate by the end of 2021 when investment growth reaches its strongest point.