This article describes the current state of the Alberta economy. It recognizes that the coal development proposals can contribute to the needed economic recovery.
Forgotten in the pre-occupation with the development risks are the valuable benefits of Alberta coal mining investments at a time when:
- Employment at a time of record-high unemployment.
- Investment at a time of record-low investment.
- Tax revenue at a time of record-high public deficits and debt.
Alberta’s economic situation is weak at the moment because of:
- Low crude oil prices due to the fight for market share between Russia and Saudi Arabia.
- Low natural gas prices due to significant production increases in the United States.
- Low investments in oilsands mines due to project approval gridlock.
- Reduced margins on crude oil sales caused by using higher-cost rail transportation due to pipeline approval gridlock.
- The collapse of demand for energy and other exports caused by the COVID-19 pandemic.
The links to the other articles in this series are listed at the end of this article.
Alberta’s unemployment has been increasing due to the adverse economic conditions described above.
Alberta capital investment
Alberta capital investment is currently near-record-low levels.
This chart shows capital investment in the Canadian upstream oil and gas industry centred mostly in Alberta.
This chart shows investments in Alberta housing, the oil and gas industry and all other industries.
Alberta government finances
Alberta government finances have deteriorated markedly because of:
- Dramatic reductions in tax revenue due to low energy prices and the economic implosion caused by COVID-19.
- Record-high public expenditures inherited from the previous government and then required to compensate for the economic implosion caused by COVID-19.
What views do you have about the proposed coal mines and their contribution to the economy? Let us know in the comments below.