Westward ho! - and how

Young men, and just about everyone else, it seems, are going west to where the jobs and the money are

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by L. IAN MacDONALD
The Gazette, Saturday, December 30, 2006

For years, we have been discussing federalism in terms of Quebec and the Rest of Canada. At the end of 2006, there is a new discussion framework in terms of economics and monetary/fiscal policy - Alberta and the Rest of Canada. AB and ROC.

Consider the following from Statistics Canada: In the first 11 months of the year, the Alberta economy created 112,000 new jobs, or 40 per cent of all the new employment in Canada. A province whose population accounts for just over one Canadian in 10, has created four new jobs in 10 this year.

In the last two months alone, Alberta's job-creation rate has accelerated to the point that it created half of all the new jobs in the country. If that has held through December, a province with 10 per cent of Canada's population will have created 50 per cent of the country's new jobs in the fourth quarter.

Over the year to date, employment in Alberta increased by 6.2 per cent, three times the national average.

Alberta's unemployment rate of 3.1 per cent in November was less than half the national average of 6.3 per cent. And six-per-cent unemployment is considered a full-employment economy, with work for everyone who really wants a job.

Says StatsCan in a recent note: "Alberta's economy is in the midst of the strongest period of economic growth ever recorded by any province, according to a study released this September by the Canadian Economic Observer."

And if you build it, people will come. They most definitely will come. They are already coming.

During the third quarter of the year alone, Alberta's population grew by 1.2 per cent to reach 3.4 million. This is more than three times the 0.33 per cent growth of the whole Canadian population.

They may be moving to Alberta from Nova Scotia and Newfoundland, which seem to supply most of the work force in Fort McMurray, but Canadians are also moving there from Quebec and Ontario. In the third quarter, about 5,000 people moved from Quebec to Alberta, while only 1,000 people moved from Alberta to Quebec, for a net Quebec loss of 4,000 people. Meanwhile, about 17,000 people moved from Ontario to Alberta, as opposed to only 5,000 moving from Alberta to Ontario, for a net Ontario loss of 12,000.

It's no mystery - people go where the jobs are, and despite inter-provincial migration, there is still a severe labour market shortage in Alberta.

Meanwhile, Ontario, the industrial heartland of the country has lost 63,000 manufacturing jobs this year, a lot of them in the auto and auto-parts industries that are critical to the national economy. The services sector, particularly financial services and telecommunications, has taken up the slack.

But in November, Ontario's unemployment rate of 6.4 per cent was actually fractionally above the national average of 6.3 per cent.

Does anyone remember a time when Ontario's unemployment rate was above the national average?

Quebec's unemployment rate of eight per cent is within its historical spread of two points above the national average. And like Ontario, Quebec is experiencing losses in the manufacturing sector that are being covered by gains in services.

Despite the Alberta energy boom, manufacturing losses in central Canada have caused economic growth to flatline - 0.0 per cent GDP growth in October following a 0.4 per cent decline in September.

And there's another Alberta number to consider - wage-driven inflation of 7.2 per cent in the first half of the year was three times higher than the national average.

Stated another way, a top Finance official said at a recent pre-budget briefing, "all nine other provinces are below the national average."

Alberta is now facing the challenges of managing prosperity that has been largely unmanaged to this point. For one thing, the Calgary economy is overheated - housing prices have increased by about 35 per cent in the last year. Demand far exceeds supply.

And consider this: For all its ability to invest in higher education, and with no provincial debt and an $8 billion surplus, Alberta still has the highest high-school dropout rate in the country.

Once again, it's the law of supply and demand - 17-year-old kids are leaving school because they can make $60,000 driving trucks in the oil sands.

Alberta and ROC. We're there.

 
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