Figures released this week by Statistics Canada show that Alberta’s GDP declined 8.2% in 2020. The next hardest hit were Quebec and Newfoundland and Labrador, with economic declines of 5 , 3%. The Canadian economy as a whole shrank 5.3%.
“This is certainly an unprecedented event in at least the past four decades,” said Rob Roach, deputy chief economist at ATB Financial.
Alberta’s economy was hit hardest because it not only faced pandemic restrictions, but also the collapse in global oil prices last spring.
On April 20, 2020, the benchmark price of West Texas Intermediate crude closed below zero for the very first time, leading to the shutdown of large quantities of production and a wave of job losses.
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In total, oil and gas extraction fell 6.4% in 2020.
READ MORE: The oil industry is still recovering 1 year after the historic free fall of raw materials in a territory with negative prices
Prices have since rebounded and employment in the sector has returned to pre-pandemic levels, but Alberta is still struggling with a jobs crisis. The unemployment rate in the province is 9.1% and 223,000 Albertans are looking for work.
ATB Financial predicts that the economy will rebound 4.1% this year, but it will be a long return to normal.
“It will probably be around 2023 before we close the hole created by the 2020 losses,” Roach said.
READ MORE: Alberta’s unemployment rate continued to decline in March, now 9.1%
This growth is of course not guaranteed. According to Roach, global oil markets must remain stable and the province must weather the pandemic. Alberta currently leads the country in active COVID-19 cases per capita.
“The path to the pandemic, to be able to get it completely behind us and reopen the economy, even if things aren’t exactly the way they used to be, a certain sense of normalcy is important,” Roach said. .