Signs of strain showing in Alberta’s record breaking population growth

At Calgary’s Centre for Newcomers, where Kelly Ernst is chief program officer, staff have been — in Ernst’s words — “run off their feet.”

The non-profit organization, which offers services and language training to immigrants and refugees in Alberta’s largest city, served an eye-popping 50,000 clients last year. It was a dramatic increase from the prior year, and also a huge uptick from pre-pandemic times.

“These numbers are more than 100 per cent greater than the previous year, and triple five years ago,” Ernst said.

“For some services, the numbers are up over 400 per cent over two years.”

The surge in demand for newcomer services in Calgary is a reflection of Alberta’s record-breaking population growth, which has come with both pros and cons.

In 2023, the western province saw its population surge by 202,324 residents to 4.8 million, according to Statistics Canada.

That’s the largest annual increase in Alberta’s history, the equivalent of 550 people moving to the province every day. While the bulk of the growth came from international migration, reflecting a Canada-wide trend, Alberta also shattered a national record in 2023 for interprovincial migration with a net gain of 55,107 people, the highest ever recorded by any province.

Most of these interprovincial migrants came from Ontario and British Columbia. Statistics Canada estimates that 38,236 Ontarians moved to Alberta last year, for example, versus just 14,860 Albertans who moved to Ontario.

Alberta has always been a place with periods of sudden, dramatic population growth. The province’s oil and gas-based economy has attracted waves of job-seekers during historical times of high commodity prices and busy oilpatch activity.

But what is happening right now in Alberta is different than in the past, said Mark Parsons, chief economist for ATB Financial.

“Alberta’s is a relatively strong economy, so the fast rate of job growth is contributing to the influx of people coming into the province, no question,” Parsons said.

“What’s different this time is that affordability is playing an important role — particularly housing affordability.”

Experts say Canada’s housing crisis, and the affordability of the Alberta real estate market compared with places like Toronto and Vancouver, is one of the reasons the province has been the destination for so many U-Hauls and moving trucks.

In fact, housing affordability was one of the carrots the Alberta government dangled with its “Alberta is Calling” ad campaign, which ran in the spring of 2023 in southern Ontario and Atlantic Canada. The campaign urged Canadians who can’t afford a home where they live to consider moving to Alberta, with its comparatively high salaries and lower real estate prices.

While the campaign was a smashing success from a marketing perspective, Alberta’s population boom has downsides. The sharp uptick in residents has helped drive economic growth, supporting retail and restaurant sales in the province and leading to a flurry of construction activity, but it has also made Alberta’s famously affordable real estate less affordable.

“In 2022, it felt like everyone was saying, ‘Alberta’s on sale, this is great, this is amazing,’” said Calgary real estate agent Dawn Herron Maser.

“But now people who are from here are starting to feel like, ‘Is it really that much on sale anymore? Because we’re here in Alberta and we’re struggling. We’re struggling to buy our homes here.’”

In Calgary, the benchmark home price in March was $597,600, nearly 11 per cent higher than the previous year, according to the Calgary Real Estate Board. Anecdotes abound of wild bidding wars between buyers willing to waive all conditions and offer tens of thousands more than the asking price, a phenomenon that has become prevalent in hot markets like Toronto and Vancouver.

Calgary and Edmonton also saw the sharpest acceleration in rent prices among major Canadian cities in 2023. In Calgary specifically, the average rent for a two-bedroom apartment in 2023 jumped 14.3 per cent, the highest year-over-year growth in the country and the sharpest single-year rise in rent growth the city has seen since 2007, data from CMHC shows.

Adam Legge, president of the Business Council of Alberta, said new homes are simply not being built fast enough to keep up with the province’s growth. And there are other signs of strain showing as well. New arrivals to Alberta are struggling to find family doctors, and unprecedented school enrolment growth has led to overcrowded classrooms.

There is also a shortage of construction workers, welders and all of the other skilled tradespeople needed to build everything from houses to schools to roads as quickly as possible.

“We just aren’t seeing a sufficient inflow of new Albertans, either interprovincially or internationally coming with those kinds of skills and credentials,” Legge said.

While the pace of population growth in Alberta is expected to moderate this year and in 2025, ATB Financial predicts it will still be strong compared to most other parts of Canada and developed economies around the world.

In the long term, sustained growth is likely. The province’s economy is diversifying, creating opportunities for workers in non-oil and gas-related fields such as technology and aviation, and the proximity of the Rocky Mountains and some of Canada’s best-loved national parks continue to be a draw for tourists.

The Alberta government’s own projections call for the province’s population to hit six million people as early as 2039.

“We really need to start looking at Alberta, and the West in general, in a different way,” said Ernst, with the Centre for Newcomers, adding both provincial and federal governments need to prepare for the growth that is coming by investing in housing, infrastructure, programs and education.

“We’ve got to really think critically about the allocation of resources in this country — really understanding where people are moving, where people are setting up, where some of the population pressures are.”

Legge agreed, adding it’s vital Alberta prepare for its future by addressing areas that are already under strain due to the province’s rapid growth.

“The message ‘Alberta is Calling’ is clearly working, which is a great thing in the sense of growth for the province and the people who are bringing their skills and talents and passions and entrepreneurship here,” he said.

“We’ve just got to make sure that we don’t become victims of our own success, and tackle some of the challenges that are already putting strain on our quality of life.”

Source link