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Bullish on Calgary: City economy will weather the upcoming turbulence, say economists

Economists predict a 3% GDP growth for Alberta in 2023.

While the Calgary economic waters might get a bit rough, the city appears to have the right boat to ride out the waves, economists said.

Inflationary pressure, interest rates, labour shortage will put the brakes on the Canadian economy, but only slow down Alberta, according to ATBs Deputy Chief Economist Rob Roach.

Roach was one of the presenters at the Calgary Economic Development’s (CED) Economic Outlook event on Wednesday. Hundreds attended the annual event at the Telus Convention Centre.

The commodities boost – both the energy sector and agriculture – will keep Calgary’s economy afloat over the next year, Roach said. The 2023 GDP growth forecast for Alberta about three per cent, while the rest of Canada will be closer to zero, he said.

“So, Alberta, Saskatchewan is in a similar boat, we’re a little bit better off,” Roach said.

“We can’t avoid those rough waters, but we’ll help a weather them a little bit better.”

Alex Grassino, Head of North American Macro Strategy for Manulife Investment Management, agreed.

“There are structural themes that position Alberta relatively well,” Grassino said.  

“Most notably, ongoing scarcity of resources should continue to support demand for key exports, while a trend towards deglobalization and a desire to secure supply chain certainty are likely to benefit the province.”

CED President and CEO, Brad Parry said there’s a real optimism in Calgary, underpinned by a belief in where the city is headed.

“While we can’t predict the future, we can look at those signals that allow our community to grow,” Parry said.

“Most importantly, we need inclusive growth. We need to remove barriers. We need to ensure that all Calgarians can see themselves in our future. We need to believe in our community.”

The things that could hold Calgary back

Roach said it’s important that Calgary – and Calgarians – understand that work on the economy and the city is never done.  He used a hockey analogy; it’s great to score a goal, but what do you do on the next shift? After you win a game, what about the next one? After a championship win, you look to the next season.

“My point here is that it’s an ongoing project. We can never sit still,” he said.

Some of the things that stand in the way of Calgary’s longer-term success include managing the energy transition, the tech transition, handling labour shortages and the aging population.

The number one, however, was eroding trust.

“Our economy doesn’t work If we don’t trust each other,” Roach said.  

“All the billions of interactions that make our free-market economy work. We have to have that level of social cohesion and trust.  It’s not a return to a golden age. It’s really, we need this today in whatever form it takes. And if we don’t get it, we’re going to experience some real significant problems.”

Parry said key investments that could come with the City of Calgary’s upcoming four year budget – downtown, LRT, affordable housing – also play a part in paving the way for economic success.

“All those kinds of investments really help make our sell pitch even easier,” he said.

“When people hear about mass transit, when they hear about public housing, they hear about a revitalized downtown, a vibrant downtown, it makes that conversation go so much easier, because we’re talking to companies not just nationally, but globally who are looking for that kind of vibrancy.”

Survey results on impressions of Calgary

Results from a Stone Olafson survey of 1,591 people in key markets in Canada, the US and Europe. CED

CED also released survey data they received based on interviews with 1,591 people in key Canadian, US and European markets.

Ninety per cent of business leaders had favourable impressions of Calgary. Among workers, that number was 73 per cent.  Calgary is being recognized as a hub for tech, with a six per cent jump in that score (74 per cent from 68.) On being more than an oil and gas city, 65 per cent think Calgary has a variety of opportunities, up from 60 per cent.

“We are well-positioned to weather the economic challenges. We’ve seen diversification in our economy over the years and it’s given us optimism for the future even in these uncertain times,” said Calgary Mayor Jyoti Gondek.

“From cleantech to aviation, life sciences to film and TV, there’s exciting growth across a wide variety of sectors driving confidence in our city’s economy.”