October 7, 2021
Bright Future for Alberta’s Economy
Chris Chornohos, AACI, MRICS is an appraiser, builder and developer, and a recovering commercial real estate broker. Chris is based out of Calgary, Alberta and has become an expert in that market. Below he is interviewed by Calgary journalist, Mario Toneguzzi, regarding is his perspective on why there’s hope for Alberta’s economy.
Alberta may have struggled through some tough economic times in recent years but one commercial real estate expert says there are positive aspects of the province’s economy that bring hope for an even better future.
Chris Chornohos, Vice President at Newmark Valuation & Advisory, says Alberta has the third largest economy in the country behind Ontario and Quebec with more growth on the horizon.
“Alberta’s economy is expected to surpass Quebec’s in terms of GDP within the next five years to make it the second largest economy in the country. GDP per capita at $78,154 is well ahead of BC, Ontario and Quebec by a large margin, making Alberta the richest province in the federation,” he says.
“If Alberta was a country, it has the third highest GDP per capita behind Norway and Ireland. Alberta beats out Switzerland! In comparison to US states it falls behind only California and New York state. Alberta is also much more diversified – more than most people would think. Oil and Gas accounts for only 16 per cent of GDP with growing industries in the financial centres in Calgary to film production to technology and agriculture as well.”
Chornohos says the Alberta economy is buoyed by a business friendly environment and continued tax advantages.
One report by the Fraser Institute suggests Alberta has the highest economic freedom in Canada and is ranked 9th in North America, a ranking it shares with Texas and Montana which is no surprise.
Of course, Alberta has been known for years for its tax advantages which continue to this day.
“Alberta has one of the most competitive business tax environments in North America. The combined federal/provincial corporate income tax rate is 23 per cent in 2021,” explains Chornohos, adding that Alberta also has no provincial capital taxes, no payroll taxes, no sales tax, and has a publicly-funded health care insurance system.
All those elements of Alberta’s tax environment make the province very competitive to other jurisdictions.
Chornohos also cites the province’s connectivity as well as its talent and productivity.
“Alberta’s world-class infrastructure, which offers direct access to the U.S. and easy access to the Pacific Rim and Europe, supports business development and growth with two large international airports that service major hubs in North America, Europe and Asia,” he says. “Additional connections are provided by Alberta’s expansive highway system that connects to the CANAMEX/North-South Trade Corridor which is the north-south portion of the National Highway System in Alberta. This corridor links Alberta to the US and Mexico.
“Alberta has the youngest workforce in Canada at 37.5 years old (median age). Alberta has the highest labour productivity in the country. Fifty six per cent of Albertans have post secondary education and the province has a diverse workforce with 20 per cent born outside of Canada. Alberta had the greatest population increase in North America at 18.5 per cent from 2010-2020. Alberta’s population is expected to be larger than BC within 20 years and 50 per cent of the population growth in Canada is shared between Alberta and Ontario.”
The economic foundation sets the stage for a great quality of life for people living in the province with affordability one of the key drivers of that elevated feeling.
There’s no question that Alberta is one of the most affordable places in Canada to live with both Edmonton and Calgary experiencing substantially lower house prices than major cities such as Vancouver and Toronto. Chornohos says that the share of income a household would need to cover home ownership costs in Alberta is in the neighbourhood of 30 per cent while it is 65 per cent and 78 per cent in Vancouver and Toronto, respectively.
“Alberta boasts the Highest Human Development Index in Canada and ranks fourth behind Norway, Ireland and Switzerland. The Human Development Index (HDI) is a statistic composite index of life expectancy, education, and per capita income indicators. Education and Health care are both free within the province and Alberta has some of the most spectacular mountain destinations in the world not to mention the plethora of lakes and rivers that provide a variety of activities year round. Alberta is home to five of Canada’s 15 United Nations World Heritage Sites,” adds Chornohos.
“When I look back at the hard times we Albertan’s have endured, especially over the pandemic, I am hopeful and confident that Alberta will come back even stronger. I believe in and love this province. I am raising my kids here and I invest here. It truly is a great place to be.”
Chris Chornohos has a passion for real estate and helping his clients reach their business goals by providing Real Estate Investors and Owners with the first class valuation and advisory services to close more deals. Chris is also an investor, builder and developer. Reach out to Chris today to help with your Real Estate needs. Chris.Chornohos@nmrk.com www.chrischornohos.com
Mario Toneguzzi is based in Calgary and has 40 years of experience as a daily newspaper writer, columnist and editor working for several publications, including the Calgary Herald.
*Photo sources: https://www.forbes.com & www.tripsavvy.com
