Alberta was hit hard by the global pandemic, with higher daily numbers of new COVID-19 cases than anywhere else in Canada last year, forcing lockdowns and border restrictions that crippled its economy and restricted immigration.
Alberta lost an estimated 7.3 per cent of its real Gross Domestic Product (GDP) and experienced a 47.5 per cent downturn in the number of new permanent residents last year compared to 2019. Only 20,755 new permanent residents to Canada settled in Alberta last year compared to 43,690 the previous year.
TD Economics released its annual provincial outlook for 2021 as last year was drawing to a close. In it, the bank noted that restrictions on the accommodation, food, and personal services industries had set Alberta’s economy back.
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In their somewhat gloomily-titled provincial economic forecast, It’s Always Darkest Before Dawn, the bank’s chief economist Beata Caranci, deputy chief economist Derek Burleton, and economists Rishi Sondhi and Omar Abdelrahman predicted Alberta was then poised to record the steepest contraction among the provinces in 2020.
Alberta GDP Forecast To Grow 4.8% In 2021
TD Economics is expecting that to change this year. In their forecast, the economists predict real GDP growth of 4.8 per cent in Alberta this year as the oil and gas sector improves over last year’s precipitous drop in prices.
The rise in West Texas Intermediate (WTI) crude oil prices to U.S.-$66.09 from last year’s low of U.S.-$16.94 in April seems likely to put wind back in the industry’s sails.
Another bright spot for the Alberta economy is the performance of its agricultural sector last year. Crop production and exports were up in 2020 with farm cash receipts growing 4.3 per cent relative to 2019. The sector is also expected to benefit from the investment of $815 million in Alberta’s irrigation system.
Despite the improvement in the oil and gas and agricultural sectors – and the province’s massive economic hit last year – the Alberta economy is only forecast to grow at just under the Canadian average of 4.9 per cent this year.
Next year, Alberta is expected to see another 4.1 per cent in its real GDP.
Prime Minister Justin Trudeau’s announcement that all Canadians will be able to be vaccinated against COVID-19 by the end of September is expected to help restore some sense of normalcy to the Alberta economy and boost immigration levels.
Alberta Immigration Takes Hit
Immigration, Refugees and Citizenship Canada’s figures for last year show business immigration programs were those hardest hit by COVID-19 in Alberta last year.
The number of new permanent residents to Alberta under business immigration programs, , including the Entrepreneur stream, the Immigrant Investor Venture Capital program, the Federal Self-Employed Class, the Start-Up Visa class and the Federal Self-Employed Class, fell by 63.2 per cent, to only 35 from 95 the previous year.
Overall, economic immigration fared a bit better.
Although these programs also took a hit during the pandemic last year, they only fell by 40.3 per cent, to 12,385 new permanent residents from 20,755 the previous year. That was largely due to the relatively strong performance in Alberta of its Provincial Nominee Program which sagged less than other programs.
Worker programs, for example, fell by 52 per cent, to 4,520 new permanent residents to Alberta under the Canadian Experience, Caregiver, Skilled Trade and Skilled Worker programs last year compared to 9,425 the previous year.
Family Sponsorship programs resulted in 7,790 fewer new permanent residents to Alberta in 2020, a drop of 50.7 per cent from the 15,300 who had come to the province under those programs in 2019.
Ottawa remains firmly committed to boosting immigration again with much more ambitious targets for this year and the next two.
Immigration Minister Marco Mendicino announced late last year that Canada was going to greatly increase immigration levels to make up for the shortfall in 2020 due to the COVID-19 pandemic.
Ottawa Still Bullish On Immigration
Under the new plan, Canada is planning to welcome more than 1.2 million newcomers between 2021 and 2023 with 401,000 new permanent residents to Canada in 2021, 411,000 in 2022 and 421,000 in 2023.
Prior to the coronavirus pandemic, the previous plan set targets of 351,000 in 2021 and 361,000 in 2022.
“Immigration is essential to getting us through the pandemic, but also to our short-term economic recovery and our long-term economic growth,” said Mendicino. “Canadians have seen how newcomers are playing an outsized role in our hospitals and care homes and helping us to keep food on the table.
“As we look to recovery, newcomers create jobs not just by giving our businesses the skills they need to thrive, but also by starting businesses themselves,” he said. “Our plan will help to address some of our most acute labour shortages and to grow our population to keep Canada competitive on the world stage.