A Better Year Ahead for Alberta's Oil Industry: Alberta’s Two-Year Outlook
The Conference Board of Canada, 13 pages,
March 18, 2021
This quarterly economic forecast for the province of Alberta examines the economic outlook for the province, including gross domestic product (GDP), output by industry and labour market conditions.
- Alberta’s real GDP dropped by 7.7 per cent last year but will rebound and expand by 6.4 per cent in 2021.
- The decline in economic growth last year was the largest in the country, as the province had to deal not only with the pandemic but also the collapse in oil demand.
- Despite the ongoing shortage of pipeline capacity, exports will rebound over the near term thanks to rising demand for Alberta crude, a result in part of production cutbacks in
Venezuela and Mexico. Many U.S. refineries require the heavier brand of crude that Alberta produces.
- The cancellation of the Keystone XL pipeline by the new Biden administration implies that more oil will be shipped to the U.S. from Alberta by rail. However, delivering oil by rail is more expensive and dangerous than shipping by pipeline.
- Pandemic-driven cuts to government revenue and rising expenditures on health care have led to record-setting deficits and debt levels in the province.
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