The Alberta economy is slowly emerging from the depths of the downturn caused by the dual impacts of the COVID-19 pandemic and the collapse in oil prices. Although the recovery has begun, Alberta’s economy is not expected to fully recuperate until 2023.
Download: 2020-21 Mid-year Fiscal Update and Economic Statement (PDF, 1.5 MB)
Economy begins long road back to recovery
Alberta’s economy has rebounded since hitting a low point in May, with the Alberta Activity Index increasing nearly 6%. Meanwhile, the province has recovered more than 258,000 of the 360,900 jobs lost between February and April.
However, recent data suggests the momentum is slowing. Business investment remains weak, and the resurgence in COVID-19 cases in Alberta and around the world poses a tremendous impediment to economic recovery.
As a result, the government does not project a full recovery to 2019 levels of real Gross Domestic Product (GDP) until 2023. Despite the rebound seen this summer and fall, in 2020:
- real GDP is expected to contract by 8.1%, the largest annual contraction in Alberta’s modern-day history
- employment is forecast to fall by a record 7%
- the unemployment rate is expected to average 11.6%
In 2021, real GDP is expected to see a partial recovery of 4.4%, and employment will continue to rise gradually. Over the next few years, real GDP is expected to average annual growth of about 3.7% while the unemployment rate gradually declines.
Key energy price and economic assumptions
Table 1. Energy price assumptions (finalized October 16, 2020)
|Fiscal year||2019-20 Actual||2020-21 Budget Forecast||2020-21 Mid-year Update||2021-22 Forecast||2022-23 Forecast|
|WTI Oil Price (US$/Barrel)||54.85||58.00||36.40||45.00||54.90|
|Light Heavy Differential (US$/Barrel)||14.82||19.10||11.10||14.00||13.80|
|Natural Gas (Alberta Reference Price Cdn$/GJ)||1.39||1.70||2.10||2.50||2.50|
Table 2. Economic assumptions (finalized October 16, 2020)
|Calendar Year||2019 Actual||2020 Budget Forecast||2020 Mid-year Update||2021 Forecast||2022 Forecast||2023 Forecast|
(% change in Real GDP)
|Unemployment Rate (%)||6.9||6.7||11.6||9.5||7.8||6.8|
More budget information
A plan to get Albertans back to work, make life better and stand up for Alberta.
Revenue projections from taxes, transfers, investment income and resources.
Budget 2020 invests in the infrastructure families and communities need.
Budget 2020 continues to optimize Alberta’s tax system.