Janet Lane is the director of the Human Capital Centre at the Canada West Foundation. David Finch is professor & senior fellow at the Institute for Community Prosperity, Mount Royal University.
For generations, Alberta has been known for its well-paying jobs in the oil and gas sector. And for good reason: the sector has been the engine of the Alberta economy, and the Canadian economy, too.
A recent Canada West Foundation study to explore the reasons for youth migration in and out of Alberta considered this reputation. When asked to describe Alberta, the No. 1 response from young adults was the oil and gas sector. Their estimates of the proportion of all jobs directly in oil and gas extraction ranged between 40 and 70 per cent. The reality is less than 7 per cent. Other research suggests young adults have little interest in working in the sector. They sense a contradiction with their core values associated with climate and the environment.
Given the importance of the sector, the youth-held perception that Alberta offers limited career opportunities beyond oil and gas is not surprising. Oil, gas and mining make up 26 per cent of provincial GDP and were forecast to contribute 21 per cent of provincial government revenues this year.
The problem is this economic data is largely detached from career opportunities. At the end of March, 95 per cent of Alberta’s 88,000 vacant jobs were in sectors other than oil and gas extraction.
After decades of varying attempts to diversify Alberta’s economy, recent efforts are succeeding.
One reason is that since the 2014 commodity price collapse, oil and gas companies have changed their extraction processes, which reduced their workforce needs, and have begun to move to net zero emissions. Energy companies and Albertans have reached a consensus that the energy transformation (this time) is real.
Another reason is that, believing that the boom times might not come back, Albertans retooled themselves and the economy – one company, one degree, and one retraining program at a time.
Evidence of this economic diversification is reflected in: the doubling of the province’s technology sector to 3,000 companies in under four years; Calgary’s rank as the 28th tech talent hotspot in North America; the employment of 12,000 Albertans in life sciences; and Alberta’s leadership in clean energy investment and renewable energy growth.
Meanwhile, Alberta’s creative industries – film, television and gaming – have taken off. HBO series The Last of Us, the largest television production in Canadian history, is being shot in Alberta. Gaming platform giant Unity Technologies recently launched a 25,000-square-foot Innovation Centre in Calgary. Sectors such as agribusiness, life sciences and construction have thousands of job vacancies and, like jobs in oil and gas, these demand increasing technical expertise.
Though Alberta’s economic diversification is real, it faces two significant challenges. As geo-political factors contribute to sustained crude prices over US$100, the financial strength of the oil and gas sector, which can pay double the national average wage, could stymie the growth of newer businesses that compete for similar talent but cannot yet compete on wages.
This contributes to the second challenge. Improved commodity prices are an overall financial benefit, but they could reinforce the perception that Alberta is a one-sector province and contribute again to outward migration of young talent not interested in working in the sector.
To meet these challenges, Alberta needs to continue to invest and expand the development of skills that enable people to thrive in the dynamic and changing economy. To ensure that efforts to diversify continue to succeed, everyone who is willing to work needs to be ready for the thousands of jobs that exist and that are coming. This requires better matching of people with available jobs and the required job-specific training.
This investment in skills cannot simply be about the job skills in demand today; it requires a concerted and focused commitment to developing the adaptive capacity of every Albertan. The capacity to adapt will ensure all Albertans have lasting opportunities to contribute to our increasingly diverse economy. To achieve this, leaders, policy makers and education and training providers need to build their adaptive capacity too.
In addition, Albertans need to tell the real story of economic diversification to young people. To seed their aspirations for a future in Alberta and the choices they will need to make to achieve them, this story must be told in junior high school. And for youth to make informed choices about their education and career paths, they need more timely and in-depth information about the skills and competencies needed for success in different jobs.
As a province, Alberta has prospered from the development of its oil and gas resources. This sector laid the foundation for the Alberta of today. But the economic and social prosperity of a place is no longer driven solely by its ability to extract natural resources; it is also driven by its ability to develop, attract and retain the best people.
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