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Alberta's population growth is breaking records, but there are signs of strain

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The increase in demand for services for newcomers to Calgary reflects Alberta's record-breaking population growth, which brings both advantages and disadvantages.

In 2023, the Western Province saw a population increase of 202,324 residents to 4.8 million, according to Statistics Canada.

This is the largest annual increase in Alberta's history and is equivalent to 550 people entering the province per day. While most of the growth came from international migration, reflecting a Canada-wide trend, Alberta also broke a national record for interprovincial migration in 2023 with a net increase of 55,107 people, the highest ever recorded by a province.

Most of these interprovincial migrants came from Ontario and British Columbia. For example, Statistics Canada estimates that 38,236 Ontario residents moved to Alberta last year, while only 14,860 Albertans 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 large numbers of job seekers during historic times of high commodity prices and brisk oil production.

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

“Alberta is a relatively strong economy, so rapid job growth is undoubtedly contributing to the influx of people into the province,” Parsons said.

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

Experts say 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 is the destination of so many U-Hauls and moving trucks.

In fact, housing affordability was one of the goals the Government of Alberta had in play with its “Alberta is Calling” advertising campaign, which ran in southern Ontario and Atlantic Canada in the spring of 2023. The campaign urged Canadians who cannot afford to own a home where they live to consider moving to Alberta, where salaries are relatively high and property prices are lower.

While the campaign was a success from a marketing perspective, Alberta's population boom also has its downsides. The sharp increase in population has helped spur economic growth, boost retail and restaurant sales in the province, and lead to brisk construction activity, but has also made Alberta's famously affordable real estate less affordable.

“In 2022, it felt like everyone was saying, 'Alberta is for sale, that's great, that's amazing,'” said Calgary real estate agent Dawn Herron Maser.

“But now people here are asking themselves, 'Is there really that much left on offer?' Because here we are in Alberta and we have problems. It's hard for us to buy our houses here.'”

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

Calgary and Edmonton also saw the largest rental price increases among major Canadian cities in 2023. In Calgary in particular, the average rent for a two-bedroom apartment rose 14.3 per cent in 2023, the highest year-over-year growth in the country. The strongest one-year increase 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 simply aren't being built fast enough to keep up with the province's growth. And there are other signs of overload too. Newcomers to Alberta are struggling to find primary care doctors and the unprecedented increase in school enrollment has led to overcrowded classrooms.

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

“We are simply not seeing a sufficient influx of new Albertans, either interprovincially or internationally, who have these skills and qualifications,” Legge said.

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

Sustainable growth is likely in the long term. The province's economy is diversifying, creating workforce opportunities in fields unrelated to oil and gas, such as technology and aviation. Proximity to the Rocky Mountains and some of Canada's most popular national parks continues to be a draw for tourists.

The Alberta government's own projections suggest the province's population will reach six million as early as 2039.

“We really need to look at Alberta and the West in general from a different perspective,” said Ernst of the Center for Newcomers, adding that both the provincial and federal governments need to prepare for upcoming growth by investing in housing, infrastructure , programs and education.

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

Legge agreed, adding that it is critical for Alberta to prepare for its future by addressing areas already under pressure due to the province's rapid growth.

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

“We just need to make sure we don’t become victims of our own success and address some of the challenges that are already burdening our quality of life.”

This report by The Canadian Press was first published April 14, 2024.