Premier Notley has a warped view of economic recovery in Alberta

In August, Premier Rachel Notley tweeted enthusiastically about Alberta’s economic recovery: “As things continue to look up, we have another sign more Albertans are beginning to feel the recovery. This summer, Alberta restaurants set a new record for sales. That’s good news for those enjoying time out, the business owners and Albertans looking for work.”

And back in July, she said her “Stampede barometer” told her Alberta’s economic storms are passing. While there’s work to be done to ensure all Albertans share in that change in barometric pressure, “things are looking up.”

Fast-forward to October and one has to wonder about the premier’s spatial relations, if she thinks that things are “looking up” for Alberta. Yes, some economic indicators have returned to the pre oil-price crash levels, but things are hardly looking peachy.

As a study by the Fraser Institute found, what’s actually looking up are the earnings and growth in jobs for the public sector—not the private sector. In The Illusion of Alberta’s Job Recovery, researchers showed that in fact, for Alberta’s private sector, things are looking rather down.

For example, since 2014 government employment in Alberta increased by 21.5 per cent while private-sector employment (excluding the self-employed) fell by 3.0 per cent. As a result, the government sector’s share of total employment (again, excluding self-employed) increased from 19.5 per cent to 23.2 per cent—a level not seen in the province since 1994.

Crucially, contrary to popular opinion, this is not solely due to the drop in oil and gas prices. In neighbouring Saskatchewan, for example, growth in the government sector has been far slower, despite the same oil-price depression. Saskatchewan increased its government-sector employment by just 2.1 per cent from July 2014 to May 2018—one-tenth of Alberta’s government-sector employment growth rate over the same period.

And just last month, a report released by TD Bank indicated it could be another two years before the Alberta job market fully recovers. TD deputy chief economist Derek Burleton said the regrowth is not bringing back the same high-paying jobs that existed before the dive in oil prices. “Employment is back to where it was pre-recession, but a lot of the jobs are self-employment, more of a freelance type,” he said. “Employers are kind of slow to bring back hiring and part of that does reflect the lackluster investment outlook over the next couple of years.”

Finally, in August business reporter Mario Toneguzzi reported that Alberta’s office vacancy rate of 23.5 per cent is the highest in Canada, a slight improvement from the record 26.4 per cent of 2017, but a long way from Edmonton’s rate of 14 per cent, Canada’s overall average vacancy rate of 11.5 per cent, and much higher than Toronto’s 2.2 per cent.

Premier Notley naturally wants to focus on the bright spots and downplay the dark spots in Alberta’s economy, but she’d be better off not “looking up” so much. Rather she should look down at a list of measures and strategies she can deploy to reduce Alberta’s regulatory burden, restore Alberta’s tax advantage, and help foster genuine economic recovery in the province.