Accounting firm predicting recession in Alberta during 2023

It’s not the new year’s prognostication anyone wants to hear. Accounting firm Deloitte forecasts a slowdown for Alberta’s economy in 2023, a year after it led the nation in growth.

“We’re also predicting Alberta to enter a recession this year,” said Trevin Stratton, national Economic Advisory leader and partner at Deloitte.

“Overall, we’re looking at a contraction of the Alberta economy of 1.1 per cent, that’s a bit more than the national average of point 9 per cent.”

So why the down arrows? The accounting firm expects a modest retreat in oil demand- while Alberta’s ledger shows more red ink than most provinces.

“Its relatively high debt levels, after B.C. and Ontario, it’s the highest in Canada and that’s having an impact considering what interest rates are right now,” said Stratton.

It’s not all doom and gloom in Wildrose Country, two key factors are preventing an even steeper economic slide.

“The downturn in Alberta’s housing market is actually expected to be relatively mild compared to other provinces and strong population growth in Alberta is helping when it comes to the modest pullback in energy demand.

Alberta’s recession along with the rest of the country is expected by Deloitte to be mild and shortlived compared to its predecessors in 2008 and 2020. Deloitte believes the Bank of Canada will reverse its aggressive interest rate hikes before years end – while oil finds more stable footing. Meaning Alberta could be back in the black for 2024.

“We’re expecting relatively strong growth compared to other provinces, we’re expecting 1.8 per cent growth for Alberta in 2024 which is among the leading province.”