Alberta's population growth is breaking records, but shows a strain

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CALGARY — The staff at the Calgary Newcomer Center, where Kelly Ernst is the program's CEO, is — in Ernst's words — “run off their feet.”

The nonprofit, which provides services and language training to immigrants and refugees in Alberta's largest city, served 50,000 clients last year. This was a sharp increase from the previous year, and also the largest increase since the pre-pandemic period.

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“These numbers are up more than 100 percent from the previous year and three times more than five years ago,” Ernst said.

“The number of some services increased by more than 400 percent in two years.”

The surge in demand for newcomer services in Calgary is a reflection of Alberta's record population growth, which has its pros and cons.

According to Statistics Canada, the population of the western province will increase by 202,324 people to 4.8 million in 2023.

This is the largest annual increase in Alberta's history, with 550 people moving to the province every day. While most of the growth came from international migration, which mirrors the trend in Canada, Alberta broke the national record for interprovincial migration with a net gain of 55,107 people in 2023, the highest ever of 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, compared to just 14,860 Albertans who moved to Ontario, for example.

Alberta has always been a place with sudden, dramatic periods of growth. The province's oil and gas-based economy has attracted a wave of job seekers during historic periods of high commodity prices and booming oil production.

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But what's happening in Alberta right now is different than it used to be, said Mark Parsons, chief economist at ATB Financial.

“Alberta is a relatively strong economy, so the rapid rate of job growth is driving the flow of people into the province,” Parsons said.

“What's different about this time is that affordability plays a big role, especially housing affordability.”

Canada's housing crisis and the affordability of Alberta's real estate market compared to places like Toronto and Vancouver are among the reasons the province has become a destination for many U-Hauls and moving trucks, experts say.

In fact, housing affordability was one of the carrots the Alberta government dangled in the Spring 2023 “Alberta is Calling” advertising campaign across southern Ontario and Atlantic Canada. The campaign urged Canadians who can't afford a home to live in to consider moving to Alberta, where wages are relatively high and real estate prices are low.

While the campaign was a success from a marketing standpoint, there are downsides to Alberta's growing population. The boom in population has spurred economic growth, boosted retail and restaurant sales in the province, and spurred construction activity, but has also made Alberta's famously affordable real estate more affordable.

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“I feel like in 2022, everybody's going to say, 'Alberta is for sale, it's great, it's amazing,'” said Calgary real estate agent Dawn Herron Maser.

“But now people from here say, 'Is it really for sale?' Because we're in Alberta and we're struggling. We are struggling to buy our houses here.''

Home prices in March were $597,600, up 11 per cent from last year, according to the Calgary Real Estate Board. A common phenomenon in hot markets like Toronto and Vancouver, anecdotes abound of wild bidding wars between buyers willing to waive all terms and offer tens of thousands more than the asking price.

Calgary and Edmonton also saw the sharpest rent increases in 2023 among Canada's largest cities. Notably, average two-bedroom rents in Calgary are set to increase 14.3 per cent in 2023, the highest one-year increase in the country and the city's sharpest one-year increase in rent growth since 2007, according to CMHC data.

Alberta Business Council president Adam Legge said new homes are not being built fast enough to keep up with the province's growth. There are also other signs of tension. Newcomers to Alberta are struggling to find family doctors, and unprecedented enrollment growth has led to overcrowded classrooms.

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

“We're not seeing a sufficient influx of new Albertans coming interprovincially or internationally with those skills and credentials,” Legge said.

Although Alberta's population growth rate is expected to moderate this year and into 2025, ATB Financial predicts it will still be strong compared to other parts of Canada and developed economies around the world.

In the long run, steady growth is likely. The province's economy is diversifying, creating opportunities for workers in non-oil and gas industries such as technology and aviation, while the proximity of the Rocky Mountains and Canada's best-loved national parks is attracting tourists.

The Alberta government's own projections call for the province's population to reach six million by 2039.

“We really need to look at Alberta and the West as a whole differently,” said Ernst, with the Center for Newcomers saying the provincial and federal governments should prepare for the growth that comes with investing in housing. , infrastructure, programs and education.

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“We need to think really critically about the allocation of resources in this country — we need to understand where people are moving, where people are settling, where some of the population pressures are.”

Legge agreed, saying it's important for Alberta to prepare for its future by addressing areas of tension due to the province's rapid growth.

“The 'Alberta is calling' message is clearly working, and it's a great thing in terms of growth for the province and the people who bring their skills and talents, passion and entrepreneurship here,” he said.

“We need to make sure we don't become victims of our own success and try to address some of the challenges that are negatively impacting our quality of life.”

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