Canada's Investment Crisis Undermines Competitiveness, Alberta Faces Policy Shifts

Policy experts are sounding the alarm on Canada's economic future, with a recent report from the C.D. Howe Institute warning that shrinking capital investment is undermining national competitiveness and wages. This observation aligns with Statistics Canada data showing Canada's GDP growth, while annualized at 2.6%, is primarily driven by a significant decline in imports rather than robust business activity or household spending.

Economic Headwinds and Local Shifts

Despite the national weakness, Alberta's economic outlook offers a mixed picture. ATB Financial projects Alberta's real GDP growth to outpace the national average. However, the City of Calgary's economic forecast anticipates a 7.5% unemployment rate, attributed to strong net migration into a competitive labour market. Geopolitical uncertainties, particularly around potential trade tariffs, pose a significant risk to Calgary's trajectory, according to Calgary Economic Development.

Locally, the Alberta government is moving to reshape healthcare. Katherine Fierlbeck, C.D. Howe Institute, details how Alberta's Health Statutes Amendment Act (Bill 11) introduces a unique "flexibly participating physician" category, allowing doctors to bill privately or publicly for services. This could designate public insurance as the payor of last resort for those with private health insurance, a significant shift that University of Calgary professor Lorian Hardcastle notes lacks explicit safeguards for the public system. Concurrently, national entities face challenges, with Canada Post reporting over $1 billion in accumulated losses by early December, a significant burden highlighted by C.D. Howe Institute's Glen Hodgson. In the energy sector, an MOU between Canada and Alberta seeks to unlock investment for Carbon Capture, Utilization, and Storage (CCUS) and new pipelines, but Kate Koplovich, C.D. Howe Institute, points to persistent risks for private investors, while Lennie Kaplan, C.D. Howe Institute, emphasizes that market-based reforms to industrial carbon pricing are crucial to secure billions in private capital for CCUS.