3.6 – Introduction deck – Key regional economic & environmental challenges
Trade exposure
- The Prairie provincial economies are highly trade-exposed. In 2024, the Prairies accounted for $249 billion (34%) of Canada’s international goods exports.
- U.S. and Chinese tariffs on Canadian exports, along with retaliatory measures are adding costs, lost revenues, and uncertainty for businesses.
Productivity lags
- Compared to the U.S., Canada’s productivity performance has lagged for decades, and among the G7 countries, Canada is second only to Italy in productivity decline.
Growing the clean energy sector
- Significant decline in oil and gas sector capital spending since the 2015-16 oil price collapse is shrinking what was once the Prairies’ investment advantage.
- Prairie greenhouse gas emissions are now larger than in the rest of Canada, combined.
- Concerns about energy transition, resiliency, and the transportation infrastructure needed to get product to market.
- Regulatory uncertainty is creating a challenging environment for the sector and SMEs in the oil and gas supply chain.
Extreme weather
- Increased frequency and severity of natural disasters, such as the 2024 Jasper wildfires, impacting small businesses and local communities.
- Increased frequency of droughts resulting in poor crop yields and quality, culled herds, and low water levels for hydroelectric power generation.
Labour availability
- Alberta and Saskatchewan’s job markets have struggled to fully absorb new entrants, despite outperforming the rest of Canada in job creation from May 2023 to May 2024.
- Continued skills mismatches between available jobs and job seekers, with employers on the Prairies struggling to attract people with the right skills to the right place at the right time.