Long-Term Labour Analysis Shows Trudeau’s Policies Hurt Alberta

An analysis of Alberta's labour market highlights how political leadership shaped (and hurt) its economic environment
Published on February 20, 2024

An analysis of Alberta’s labour market over the last 12 years offers revealing insights into how political governance and policies have shaped its economic landscape.

This period, marked by transitions through three distinct political eras, showcases Alberta’s resilience and challenges in the face of external pressures and internal policy shifts.

My study titled Twelve Years of Labour in Alberta: A Tale of Three Political Eras begins under the Progressive Conservative leadership of Alison Redford, extending to Jim Prentice’s tenure, which concluded in May 2015. This era coincided with the Harper Conservatives’ federal governance. Despite global economic challenges, including a sharp decline in oil prices and the devastating High River floods, Alberta witnessed a 25 percent surge in employee compensation, significantly outpacing the national growth rate of 15.7 percent.

Moreover, Alberta exceeded national growth rates in the working-age population (8.3 percent vs. 3.7 percent) and employment (6.7 percent vs. 3.5 percent). However, this period also experienced a significant 49 percent rise in male unemployment, a trend that has persisted through later governments. This persistent issue suggests the lasting effects of volatility in the oil industry and the pressures of regulatory changes on the labour market.

Alberta’s economy then faced setbacks with the rise of Rachel Notley’s NDP government in 2015, closely followed by Justin Trudeau’s Liberals taking power in Ottawa. The NDP’s tenure introduced stringent emission limits on oil sands and cuts to the firefighting budget, which led to the catastrophic Fort McMurray fire. Despite Alberta’s population growth, the employment growth rate during the NDP era was a mere 1.9 percent, and total wages and salaries decreased by 6.5 percent, starkly contrasting with British Columbia’s 12.6 percent employment growth during the same period.

The United Conservative Party (UCP) era ushered in a resurgence of economic activity, with total wages and salaries increasing by 21.3 percent and construction wages by 35.1 percent despite the global pandemic. This marked a significant recovery from the NDP’s tenure, during which construction wages had plummeted by 34.8 percent. Under the leadership of Jason Kenney and Danielle Smith, Alberta not only recovered but also began outperforming its provincial counterparts and national averages across key economic indicators.

Yet, the challenge of navigating a Trudeau-led federal landscape remained, echoing the difficulties faced during the NDP era. In 2010, Justin Trudeau said, “Canada isn’t doing well right now because it’s Albertans who control our community and socio-democratic agenda. It doesn’t work.” This implies that the Prime Minister believes Canada only functions when Alberta takes a backseat in our country’s future and indicates a dangerous bias against the province’s leadership position.

Since 2015, Alberta has seen a 13.4 percent growth in total wages and benefits, lagging behind the national growth rate of 48.1 percent. Alberta’s mining, oil, and gas extraction sectors, critical to its economy, have witnessed only a 3.6 percent increase in wages and salaries compared to a 14.8 percent national growth, highlighting the sector’s challenges under current federal policies.

Comparatively, Trudeau’s home province of Quebec has demonstrated a more favourable employment growth rate than its population growth, contrasting with Alberta’s experience. From October 2011 to November 2023, the number of working-aged Albertans has grown 34.5 percent faster than those actually working. By contrast, Quebec has seen employment grow 36 percent faster than its population growth.

Despite the adversity, Alberta showcased commendable restraint in expanding its provincial and municipal bureaucracy, particularly during the economically stagnant NDP era. However, the expansion of the federal bureaucracy since May 2015 has presented additional challenges for Alberta’s economy, particularly affecting the self-employed. In fact, the public sector has absorbed the employment share that used to belong to the self-employed. Currently, there are a mere 7,000 additional self-employed Canadians compared to 12 years ago, with the vast majority residing in Alberta.

From October 2011 to November 2023, Alberta’s agricultural sector, alongside healthcare and social services, has seen an 82.5 percent increase in wages and salaries, significantly outperforming the national average. However, agriculture’s success is now threatened by federal net zero carbon emissions initiatives, potentially impacting one of Alberta’s few consistently thriving sectors.

The workforce participation trends in Alberta also raise concerns, with non-participation rates increasing significantly over the past 12 years, indicating a growing discrepancy between population growth and employment opportunities. Over the past 12 years, non-participation rates in the workforce grew by 63.9 percent for men and 39.8 percent for women compared with 26.2 percent and 18.2 percent respectively, nationally. This trend is expanding more rapidly in Alberta than in British Columbia and Saskatchewan, further highlighting the unique challenges faced by Alberta’s labour market.

This comprehensive analysis underscores the profound impact of federal policies on Alberta’s economic growth and resilience over the past 12 years. While the UCP has initiated a phase of economic recovery, the province’s full potential remains constrained by federal regulations and policies, particularly those affecting its pivotal energy sector.

The path forward for Alberta involves navigating these challenges, advocating for fair policies, and leveraging its economic strengths to ensure sustainable growth and prosperity.

In other words, the less Ottawa gets in Alberta’s way, the better.

 

Lee Harding is a Research Fellow at the Frontier Centre for Public Policy

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