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Calgary will weather economic headwinds: CED 2024 Economic Outlook

Calgary is well-suited to weather any economic malaise in Canada over the next year, thanks to strong immigration, commodity prices and with that, strong consumer spending.

That’s according to the Calgary Economic Development (CED) 2024 Economic Outlook, delivered Wednesday afternoon at the Telus Convention Centre.

Brad Parry, president and CEO of CED, said that compared to other jurisdictions in Canada and the world, we’re in a good spot.

“We know there’s going be some tough times ahead, some headwinds,” Parry said.  

“But, at the end of the day, I think we’re well positioned to take advantage some of the opportunities that might present themselves.”

Parry said that both near and long term, people will see that the City of Calgary is committed to investing in itself.

“I think we need to drive that home,” he said.

“I know that people are going to feel a pinch for a little bit. But I think we’re going through this better than anywhere else in the country right now, to be honest with you.”

ATB Financial predicts that Alberta’s GDP growth will be 2.7 per cent in 2023 and two per cent in 2024. Growth is expected to pick up in 2025, according to ATB.

Mark Parsons, Chief Economist with ATB said that Alberta will feel the pinch of higher interest rates and inflationary pressure into next year. Still, there’s a soft landing expected for Alberta.

“We have a couple of things in our favour. One is the energy sector is bouncing back, as we expect energy investment to be higher, production is going to go up,” Parsons said.

“Population growth has been strong in Alberta, that’s going to lead to higher housing starts and housing activity. We’re also seeing some emerging growth and other sectors like technology.”

Investment in the city will help

Both Parry and Calgary Mayor Jyoti Gondek said that investment in the city was crucial to ensuring that those positive drivers – immigration, commodities and consumer spending – don’t become encumbrances.

Mayor Gondek referenced many of the investments the City of Calgary has made over the past year, during her speech at the Economic Outlook event.  Earlier in the day, she said that people need to be the focus for the city’s future.

“If we are not providing Calgarians with a good quality of life, then all the economic development opportunities in the world won’t land because we’ve forgotten about the people at the heart of every decision we make,” she said.

While Parry said that there’s a lot going on in Calgary beyond the energy sector – life sciences, aerospace, and other technology sectors – these are areas that provide insulation.  But, making investments in the Calgary is a signal to others that the city believes in itself, he said.

“People take notice that cities are investing themselves. We know that there’s a direct correlation between the dollars the city puts in and private sector that follows,” he said.

“I think that’s what we’re most bullish about.”

Stephen Poloz, former Bank of Canada governor, now special advisor as Osler, said that there’s reason to be confident in Calgary and Alberta, but warned not to be too confident.  He said Alberta is expected to do better than average in Canada, but that the Canadian average might not be that good over the next 12 to 24 months.

“My main message, though, is to watch out for the precision that you hear in forecasts. Because there’s a lot of things we just don’t know,” he said.

Poloz warned of the pace of technological change, particularly its impact on workers. That could lead to a global deflationary pressure. He said the other aspect is population aging; Poloz said that it could have a distorting effect on labour markets.

“It’s a very mixed picture right now, and those forces that are not in our models are the things that are actually going to dominate the story for the next couple of years,” Poloz said.