With strong momentum heading into the new year, prospects for the Alberta economy are solid. Energy prices have surged, boosting cash flows and activity in the oil and gas sector. Further expansion of the province’s export pipeline capacity will accommodate growing oil production and exports in the coming years.

At the same time, recent investment announcements point to growing momentum in sectors such as petrochemicals, technology, finance and other emerging industries.

Economy to fully recover this year

Alberta’s economic recovery from the global pandemic and the oil price crisis far exceeded expectations last year.

Following a 7.9% contraction in 2020, real gross domestic product (GDP) grew an estimated 5.8% in 2021, with nearly all sectors of the economy rebounding. The province’s economy is expected to fully recover to 2014 levels this year, expanding by 5.4%, and be among the nation’s growth leaders.

Business investment is set to accelerate this year, underpinned by strong energy prices and Alberta’s competitive tax regime. A pickup in population growth and the strengthening labour market will also buoy consumer spending and housing activity.

Table 1. Energy price and currency assumptions (finalized February 7, 2022)

Source: Treasury Board and Finance
Fiscal year 2022-23 Forecast 2023-24 Forecast 2024-25 Forecast
WTI oil price (US$/barrel) 70.00 69.00 66.50
Light heavy differential (US$/barrel) 14.30 14.40 14.70
Exchange rate
(US cents/Cdn$)
79.0 79.5 80.1

Table 2. Economic assumptions (finalized February 7, 2022)

Source: Treasury Board and Finance
Calendar year 2022 Forecast 2023 Forecast 2024 Forecast 2025 Forecast
Economic growth
(% change in real GDP)
5.4 3.5 3.0 2.8
(% change)
4.1 3.3 2.5 1.9
Unemployment rate (%) 6.6 5.9 5.7 5.5

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Summary of government spending according to Budget 2022.